Dodd-Frank Services

Prepare Now for the Sweeping Impact of Regulatory Reform

The Dodd-Frank Wall Street Reform and Consumer Protection Act has implications to HMDA, CRA, Fair Lending and Anti-predatory lending requirements. With over 200 implementing regulations on their way, preparation is a key priority. Get ready with solutions and consulting services from Wolters Kluwer Financial Services.

Trusted Partner for Regulatory Reform

The Dodd-Frank Wall Street Reform and Consumer Protection Act will heavily impact consumer lending and compliance requirements. Trust the consumer compliance experts at Wolters Kluwer Financial Services to prepare your institution. Our consulting professionals can help your institution create a responsive program to manage the new reform requirements and the hundreds of regulations expected over the next few years. Our experienced team of experts can provide a variety of outsourced solutions:

Data management (data collection, processing, submission)
Data collection optimization (process review, data integrity reviews)
Implement technology solutions
Compliance Program Review (gap analysis, policy and procedures)
Audit Services
Training (board, staff)
Regulatory Analysis (assessments, reports, maps)

Data Management

Dodd-Frank is not only increasing compliance responsibility within an organization it is also increasing the amount of data to be collected and reported. The additional burden may be more than your current resources can handle. Wolters Kluwer Financial Services has the ability to partner with your institution and act as an extension of your existing resources. Our Business Services Processing group has been processing, editing and submitting data for clients of various sizes since 2005. The services are available for clients who do not own reporting software and want someone else to handle it all or for clients who do own reporting software but want someone to handle bits and pieces of the process. Our team of data experts can assist you with the following services as a one time project, annually, or as frequent as monthly / quarterly:

Data processing, including reasonableness and FFIEC edit checks and upload of corrected information

Compliance-Grade Geocode processing – batch or residual

Race proxy – provides creation of a proxy for race for non-HMDA data to further enhance an institutions analysis capabilities

Annual regulatory submission, including creation of transmittal summary, receipt of submission confirmation, data in electronic submission format, submission summary reports and response to submission inquiries

Data Collection Optimization

Collecting and reporting on regulatory required data is only half the battle, the other half is knowing you have retrieved the best source of information and that it matches the source documents in the loan files – the ones the examiners audit. Unfortunately, under Dodd-Frank the battle is growing quickly. Additional data capture and reporting requirements, as well as increased fair lending scrutiny, make accurate data collection mandatory. Our team of technical, operational and regulatory experts can assist your organization in obtaining a higher level of confidence in data quality.

Data Mapping: Our experts will review business practices and technology to define optimal data fields and mapping to maximize data quality. By reviewing exports, file layouts and data manipulation scripts as well as process interviews with key staff our consultants are able to understand the regulatory requirements as they pertain to your business practices and help to maximize the data that is initially captured for processing. Our evaluation will provide guidance on the best source for existing and newly required fields; provide recommendations for optimized data manipulation points and data collection process flows.

Data Integrity Review: Our data experts will manually compare electronic data to data sources (individual loan files, etc.) to identify and resolve data discrepancies. The engagement also includes creation of a rules document outlining the exact location (document, page, and field) where each data field is obtained, a summary report of the field and overall file error rates, identified process errors, and a report of which fields were changed including the previous and new values. A quality control process is employed by our team during the review to achieve the highest level of integrity. Reviews can be conducted at the client’s location or remotely at Wolters Kluwer Financial Services secure location.

Implement Technology Solutions

This same team of industry and regulatory experts which work with all of our clients to maximize their return on compliance also assist clients in implementing our suite of analytics tools.

Compliance Program Review

A thorough and comprehensive compliance program review is essential in today’s regulatory environment. An institution should ensure its program, policies and procedures, are up to date so that it can react quickly as new requirements become effective. Wolters Kluwer Financial Services can help create responsive programs to manage the hundreds of new reform requirements expected over the next few years.

A Compliance Program Review can be holistic or it can focus on a particular area of need; i.e., fair lending. During the review, our experts will review existing policy and procedures and interview key staff to understand what actually occurs on a daily basis. Using what they have learned about the institution, a gap analysis is created against the regulatory expectations and industry best practices. The report is reviewed with the institution’s management so they understand the gaps and can determine an appropriate course of action.

Often the next phase is to update or develop compliance program documents and policy or procedures that are adequate for the size and complexity of the institution. Our team of experts provides this service either as a continuation of a Compliance Program Review or as its own service engagement.

Audit Services

Once a compliance program is defined it continually has to be monitored and updated. Wolters Kluwer Financial Services can assist by providing auditing services:

Federal – transactional audits are performed based on a statistical sample of files to evaluate compliance with specified federal requirements. The engagement includes work papers and a written report of the scope of work, findings and remediation recommendations. Audits can be conducted at the client’s location or remotely at Wolters Kluwer Financial Services secure location.

Fair Lending Comparative File Reviews – Our experts will review the list of comparator files to the similarly situated borrowers in accordance with Interagency guidance. A report of findings and remediation recommendations will be provided and discussed with management.

Regulatory Analysis

Under Dodd-Frank institutions will be required to capture and report a hefty set of new data requirements. This means the data points will also be available for use in regulatory exams and available for public consumption. It has always been prudent to know what the data says about your institution before everyone else does but it is more so now than ever. The industry is under scrutiny and we are unfolding loads of data which may be taken out of context. Preparing for an exam is tough and even if you have the knowledge to evaluate your performance, finding the time, resources and tools necessary to properly assess your institution may be a daunting task. – preparation done - Wolters Kluwer Financial Services experts can assist by providing the following regulatory analysis solutions:

CRA Self Assessment – written performance evaluation that follows the FFIEC Interagency guidelines will help you better understand how well your institution is serving your community and is a document that you can hand over to the examiners for your next CRA exam.

Assessment Area Review – analyzes your current assessment area delineation compared to regulatory requirements. Our experts will compare your locations, deposits and lending activity to the boundaries of your assessment area(s) to determine if they should expand or contract. Perhaps most importantly, our experts will point out any area that could give the perception of redlining and make recommendations for adjustments.

Lending Report Packages – provides several reports that present an in-depth understanding of lending performance covering small business, consumer and/or mortgage lending for a defined reporting period and assessment area(s) .

Assessment Area demographic analysis presents information about the assessment area based on the current US Census Bureau data, current-projected demographics from ESRI, and business information from Dun & Bradstreet. The package is comprised of a series of summary reports, detailed census tract reports and a map of the assessment area and immediate surrounding areas, color-coded to census tract income levels.

Peer Analysis report package includes information about an institution’s record for receiving applicants and making loans in its market(s). This package features comparative market share reports, peer benchmark pricing test reports, historical market share reports, and a map of how the client performed relative to its competitors.

Fair Lending Risk Assessment – allows your institution to effectively gauge its propensity for fair lending risks. This is the process of weighting fair lending risk by each line of business. Our experts will map each product and line of business to governing fair lending rules and regulations and outline the probability of fair lending risk occurring within each product and/or line of business. Our experts will provide a risk assessment matrix to identify areas of fair lending risk with underwriting, marketing, pricing, and management oversight. The resulting report can be used to satisfy regulatory demand for this type of review.

Fair Lending Risk Review: Our experts will conduct a statistical analysis of a lending portfolio with an emphasis on aggregate measures covering all potential areas of fair lending risk including: marketing, redlining, denial rates, above-threshold pricing, difference of means for pricing, steering, and overrides. Regression is used solely for the purpose of identifying outliers (e.g., denied and review applications) and not to directly determine disparate impact. The primary goal of a fair lending risk review is to allow the client to focus their efforts on only the risky areas identified during the review.

Fair Lending Loan Modification Program Review: Using the following four-part approach our experts will evaluate the effectiveness and fairness of your institution’s loan modification program: 1) program review: an evaluation of loan modification policies and procedures with special emphasis on risk identification; 2) sample file review: review of a representative sample of loan modifications completed and loan modifications denied for evidence of disparate treatment and impact; 3) complete portfolio review: a statistical analysis of all completed loan modifications and denied applications comparing applicants’ race, gender, income, census tract, and ability to repay and identifying any outliers; and 4) statistical analysis reports: generate and analyze in-depth statistical reports, emphasizing spatial mapping and focal points.

Fair Lending Litigation Support: Our experts will evaluate the regulator’s statistical analysis of the data underlying any regulatory enforcement action in order to either confirm or refute their findings. This is done through a combination of regression analysis to test for disparate impact through the inclusion of race variables in the regressions and statistical testing and regression analysis and other.

Maps are available to show demographic, lending, or deposit data elements using current US Census boundaries with year-appropriate OMB MSA/MD definitions provide a series of color-coded combinations and distinctive symbols to present a geographical display that is clear in presentation and easy to comprehend in meaning.

Compliance Training Programs

Dodd-Frank will significantly affect the way institutions of all sizes conduct business. Our goal is to help all levels of employees - from the front line to the Boardroom -- get their arms around the new regulatory changes and understand:

Why the changes are happening
Why the organization must respond to them
Which existing policies and procedures need to be enhanced
How the changes affect everyone's day-to-day duties

We offer a variety of training options which are tailored to the audience and the desired area of coverage. Delivery methods include onsite training sessions and web-based training (most appropriate where there are multiple remote client offices.) Our experts can conduct training on a variety of regulatory subjects including specific regulations impacted by Dodd-Frank. The scope and depth of coverage for training can be tailored based on audience. These training options are a cost-effective method of training professionals at all levels of the organization on compliance in general and Dodd-Frank requirements as they are introduced.

Executive Management and Board of Directors Level Training - High level overview of the following: regulatory requirements, regulator expectations, expectations for management knowledge and involvement, and risks of non-compliance.

Operations and Business Unit Management Level Training - Detailed review of the following: regulatory requirements, regulator expectations, recommendations for policy and process improvements, exam preparation requirements, and risks of non-compliance. This training can also include recommended industry best practices for implementing new data collection requirements and compliance monitoring methods.

Front Line Staff Training - Instruction on function-related regulatory requirements, job-specific obligations related to compliance, and institutional consequences of non-compliance. Training can be customized to cover client specific procedures.