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5 More Reasons to Use Business Modeling to Manage RESPA-TILA Reform

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The RESPA-TILA Gorilla: Process Changes to Meet Compliance Needn’t Be a Walk Through the Jungle Blog Series Part 3

Any new regulation – and in the financial services sector there are plenty, Dodd-Frank has seen to that – requires an organization to understand how current processes work and design which changes need to be rolled out.  There are different ways of accomplishing this, but the way one mortgage lender went about managing RESPA-TILA reform gives them a leg-up for the future.

In previous posts, we talked about how they have modeled their new processes, requirements, risks and controls to figure out necessary business changes, and how they decide on appropriate control measures to manage risk. By doing this, they’ve gotten a jump on the upcoming regulation and will avoid costly fines. But as if that wasn’t cool enough, they are going to continue to reap several long term benefits from using modeling to support their compliance needs:

  1. Business Requirements for Process Implementation
  2. The models needed for understanding how RESPA-TILA disclosures are used by the lender’s processes were pretty detailed. Detailed enough that they now provide an excellent means of communicating the business requirements to the IT implementation teams that will modify existing applications and workflows.

  3. Training Documentation
  4. End users will need to be trained on the new processes and business rules. The lender is now well prepared with visual documentation of the process flows to help communicate and train employees to prepare for a smooth transition.

  5. Lasting User Documentation
  6. OK, the training documentation mentioned above will work great for the one-time roll-out project that is planned and will be carefully managed. Funny, but most people don’t remember new things after seeing them only once. And how about for future employee onboarding? By capturing the process documentation in a living, up-to-date repository that all employees can access at any time, this lender is making sure that this new way of working is maintained long term.

  7. Auditors Love It
  8. When internal auditors or external regulators come knocking, this lender is ready.  Asked to see which processes are using the new disclosures, they can show which processes comply to the specific RESPA-TILA requirements. Asked which processes are the most risky, they have a report for that.  When asked to see how they are addressing those risks with controls, there’s a report for that too. It will take them only a few minutes to demonstrate that they have RESPA-TILA under control, rather than the weeks of preparation they would have otherwise faced.

    More than that though, they’ve accomplished all of the above in a complex landscape of continuous change. Which brings me to possibly the most important benefit:

  9. Understand Inter-dependencies and Impacts of Multiple Regulations
  10. When internal auditors or external regulators come knocking, this lender is ready.  Asked to see which processes are using the new disclosures, they can show which processes comply to the specific RESPA-TILA requirements. Asked which processes are the most risky, they have a report for that.  When asked to see how they are addressing those risks with controls, there’s a report for that too. It will take them only a few minutes to demonstrate that they have RESPA-TILA under control, rather than the weeks of preparation they would have otherwise faced.

    [ This post is part of The RESPA-TILA Gorilla: Process Changes to Meet Compliance Needn’t Be a Walk Through the Jungle Blog Series ]

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