The Rising Importance of Account Remediation Services for Lenders
Managing risk in an increasingly regulated environment creates new challenges for financial institutions, particularly in the regulatory landscape surrounding cancelled ancillary products. Financial institutions are navigating legal challenges and enhanced regulatory oversight. It’s important lenders understand and pay attention to changing rules for direct and indirect loan channels as lawsuits raise the stakes and federal oversight increases.??
Financial institutions need to be proactive and anticipate not only how to process claims moving forward, but also look back and review previous transactions for potential past exposure and reconcile these transactions and claims to be compliant with current regulations.
Download "From Afterthought to Strategic Approach: Managing Ancillary Product Refunds" to learn how to remain compliant.
Here are 3 ways remediation reduces risk:
1. Incorporate lookbacks to review past facilitation of workflows and service offerings.
By taking time to look back, financial institutions can identify and resolve issues that may carry multiple negative impacts. The lookback could include reviewing transactions to understand loan portfolios, identify potential risks, and follow up on previously cancelled products. Be sure to assess what regulatory restrictions are in place to determine how far back the review should go.?
Reevaluating processes can provide clarity around options and establish proper steps moving forward. Third party services are available to help consult and recommend solutions to help financial institutions adapt and adjust to meet changing regulatory guidelines.?
2. Address compliance concerns.
A thorough review of legal documentation and an examination of state guidelines for the processing of ancillary products can help financial institutions begin to reduce exceptions and minimize future exposure.?
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It’s important to understand, in detail, the regulatory environment and the varying rules between direct and indirect lending by state. Additionally, it’s important to understand the variance of requirements for compliant refund management by state and establish corrective action on legal, regulatory, compliance, and/or consent orders. It may be helpful to create formal legal documentation with stakeholders outlining roles and responsibilities to help address accountability and establish a compliant process.?
3. Enact compliant processes and find uncollected refunds.
A process that can help confirm, remit, and collect will prompt action and mitigate future regulatory exposure by being able to track the loan portfolio accurately. Financial institutions can confirm the accuracy, delivery, and receipt of consumer refunds. A clean, clear report can help manage and track the refund process and facilitate communication with borrowers.
A compliant remediation process can:?
This is an excerpt from the #AlliedInsights blog. Read the full text here.
About Allied Solutions
Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology-based products and services customized to meet the needs of over 4,000 banks and credit unions, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains over 10 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc.
Content in the blog posts are the opinion and views of the writer, and don't necessarily reflect the opinions or views of Allied Solutions.