Posted by Bear900/CA on 12/6/13 6:03pm
Msg #495355
Third-Party Relationships
I was unaware that the NNA was pointing to the OCC Bulletin 2013-29 to build their requirements around.
In short: The OCC mandate does NOT apply to notary loan signers!
It was a big stretch for the NNA to post this:
“Officially called the OCC Bulletin 2013-29, the updated guidance is largely focused on the development of a well-documented oversight program and clear reporting strategies. Organizations will be required to show they have created a risk management plan that ensures the ongoing monitoring and reporting of all of their providers’ activities and performance, as well as a contingency plan for terminating third party relationships.
The OCC guidance applies to all banks and organizations that conduct business using third parties, including community banks and smaller institutions. The guidance also states that the OCC expects more stringent oversight procedures to be in place for providers serving a critical function in certain “high-risk” activities.
For more information, the OCC has released a detailed description of its Risk Management Guidance.”
The OCC is addressing third party relationships of a totally different nature. Here are some key points from their bulletin:
“Therefore, the OCC expects more comprehensive and rigorous oversight and management of third-party relationships that involve critical activities—significant bank functions (e.g., payments, clearing, settlements, custody) or significant shared services (e.g., information technology), or other activities that
• could cause a bank to face significant risk4 if the third party fails to meet expectations.
• could have significant customer impacts.
• require significant investment in resources to implement the third-party relationship and manage the risk.
• could have a major impact on bank operations if the bank has to find an alternate third party or if the outsourced activity has to be brought in-house.”
“The bank should consider the following during due diligence:
• Strategies and Goals
• Legal and Regulatory Compliance
• Financial Condition
• Business Experience and Reputation
• Fee Structure and Incentives
• Qualifications, Backgrounds, and Reputations of Company Principals
• Risk Management
• Information Security
• Management of Information Systems
• Resilience
• Incident-Reporting and Management Programs
• Human Resource Management
• Reliance on Subcontractors
• Insurance Coverage
• Conflicting Contractual Arrangements With Other Parties
• Contract Negotiation”
Here is the specific background the OCC provides.
“Background:
Banks continue to increase the number and complexity of relationships with both foreign and domestic third parties, such as
• outsourcing entire bank functions to third parties, such as tax, legal, audit, or information technology operations.
• outsourcing lines of business or products.
• relying on a single third party to perform multiple activities, often to such an extent that the third party becomes an integral component of the bank’s operations.
• working with third parties that engage directly with customers.
• contracting with third parties that subcontract activities to other foreign and domestic providers.
• contracting with third parties whose employees, facilities, and subcontractors may be geographically concentrated.
• working with a third party to address deficiencies in bank operations or compliance with laws or regulations.”
The NNA is making a vain attempt to make application of the OCC’s directive to notaries. This attempt may be rebutted by anyone knowledgeable in compliance that banks and title companies outsource to. Compliance experts of this nature are far too expensive to sit on the SPW. Bank and title reps harken.
The CFPB requirement is for lenders to supervise third party providers (I.E. TITLE COMPANIES) and their “agents”.
ONLY the CFPB bulletin uses the word ‘agent’ to the third party provider.
This drastically changes the role of an NSA from a Third Party Provider to an *AGENT* of such.
INTENT: The CFPB’s intent from inception was for lenders to supervise the likes of appraisers and title companies via their COMPLIANCE POLICIES (F.A.C.T. Act, UDAAP, etc.)
Appraiser supervision is conducted through the appraiser’s AMC (Appraisal Management Company) and their compliance policies, not the individual appraiser. The appraiser contracts with the AMC. In similar fashion the Notary contracts with the Title Company.
This doesn’t remove supervision requirements of title companies by lenders, and in turn the title company‘s requirement to supervise agents per the CFPB. What has become evident since the CFPB’s mandate is the unwillingness of the title companies to use their own due diligence in this regard. No amount of patchwork by the SPW, et al., will correct that. They are the third party. They are the direct target.
It would best for the NNA to reduce NSAs from a third party service provider to an agent for the most likely service provider: the title companies, and remove reference to the OCC which has a larger application beyond the scope of the NSA. The NSA is not a third party service provider to banks under the latest CFPB bulletin that introduced the term “agents” of third party service providers.
| Reply by Lee/AR on 12/6/13 6:47pm
Msg #495364
How does a notary or a large group of notaries or even an authority such as yourself tell the NNA, SWP and/or several very large Title Companies that they are mistaken, misguided or confused?
Particularly when they are having such a good time making up rules that have nothing at all to do with any government 'alphabet' dept.
| Reply by CarolF/NC on 12/6/13 6:52pm
Msg #495365
We Don't
We find the proper State or Federal Agencies or a private attorney to file suit.
All that money people are paying the NNA for BGCs, memberships etc. in my opinion would be better used on an attorney.
| Reply by Bear900/CA on 12/7/13 2:34am
Msg #495399
The CFPB will
expose their weak knowledge of compliance upon the first CFPB examination of a lender or title company touting their use of the NNA's process and procedures.
In reality, banks, title companies and notaries are the least knowledgable to handle this. Add the NNA and you have a mess.
Don't try to fix it. Let it self-destruct.
For you notaries, keep in mind the CFPB reserves the right to examine everyone in the chain if examination of a lender turns foul. Can you guarantee the NNA is keeping you compliant?
| Reply by jba/fl on 12/6/13 7:56pm
Msg #495374
How? Quit them - totally tell them no via actions.
No BGC's through them; no filling out releases; no accepting assignments except what each individual notary deems appropriate for them and their business. Let them fall by the wayside. Boycott - etc.
But, many will just cave in so that they "can feed the children" - which is really feeding the NNA's and SWP's and the few members of said organizations children, plus sending them to college.
It is a choice each has to make. One is easy - just follow blindly. The other is standing your ground and following your own rules and requirements. Which will you do?
| Reply by Bear900/CA on 12/7/13 2:18am
Msg #495398
Totally agree-I don't visit their site for fear of exploding n/m
| Reply by MikeC/TX on 12/6/13 8:47pm
Msg #495382
"The NSA is not a third party service provider to banks under the latest CFPB bulletin that introduced the term “agents” of third party service providers."
There are only four possible scenarios I can think of, based on the idea that "third party" actually means:
Lender hires Notary directly - there is no third party provider
Lender hires TC that hires the notary - the notary is the third party service provider
Lender hires TC that hires an SS that hires a notary - the SS is the third party service provider
Lender hires an SS that hires a notary - the notary is the third party provider
There are only two scenarios in which a notary could possibly be considered a third party provider, unless you redefine the term to mean "whoever is at the bottom of the food chain", which is what it seems to me that the SPW is trying to do. They've somehow decided that the changes required need to be made starting at the bottom of the process; anyone who has ever taken a management course knows that change always has to start at the top. Stuff never flows uphill...
All this from an association that claims to be working in the best interests of notaries.... So much for that...
| Reply by MAC/WA on 12/7/13 12:05am
Msg #495394
We are not a service provider
Taken from the Dodd-Frank Act
"TITLE X—BUREAU OF CONSUMER
FINANCIAL PROTECTION "
"(26) SERVICE PROVIDER.—
(A) IN GENERAL.—The term ‘‘service provider’’ means
any person that provides a material service to a covered
person in connection with the offering or provision by such
covered person of a consumer financial product or service,
including a person that—
(i) participates in designing, operating, or
maintaining the consumer financial product or service;
or (ii) processes transactions relating to the consumer
financial product or service (other than unknowingly
or incidentally transmitting or processing financial
data in a manner that such data is undifferentiated
from other types of data of the same form as the
person transmits or processes)."
"(6) COVERED PERSON.—The term ‘‘covered person’’ means—
(A) any person that engages in offering or providing
a consumer financial product or service; and
(B) any affiliate of a person described in subparagraph
(A) if such affiliate acts as a service provider to such
person. "
"B) EXCEPTIONS.—The term ‘‘service provider’’ does not
include a person solely by virtue of such person offering
or providing to a covered person—
(i) a support service of a type provided to
businesses generally or a similar ministerial service; "
[ Re EXCEPTIONS, NSAs do not provide this service directly to banks.)
| Reply by Bear900/CA on 12/7/13 1:41am
Msg #495396
Mike - 1st party is the creditor; 2nd party is the borrower
A third party in the transaction is:
"A person or company that is involved in any aspect of the mortgage origination process (underwriting, closing, funding, etc.) on behalf of the actual mortgage lender. "
http://www.investopedia.com/terms/t/thirdparty_mortgage_originator.asp
http://en.wikipedia.org/wiki/Creditor
I can see how this is easily confused. Another a third party is a broker or LO working for a broker type entity.
They are called TPO's, or third party originators, for the lender who is the first party. But they are not a service provider such as a title company or appraisal management company.
Let's party!
| Reply by CarolF/NC on 12/7/13 3:26am
Msg #495401
Bear, what are we partying about?
We still have a run a muck NNA on the loose and companies hoping on their ship daily. What's the plan to stop the madness?
| Reply by MistarellaFL on 12/7/13 6:53am
Msg #495405
Re: What's the plan to stop the madness?
Don't panic. Don't become hysterical, except in the comical sense.
This is good advice coming from someone who, over the years, has seen the NNA's exploitive propaganda machine:
abort
misfire
peter out
wane
die
end
fail
fold
miscarry
be a fiasco
come to nothing
end in defeat
end in disappointment
miss the mark
| Reply by C. Rivera Chicago Notary Services on 12/7/13 9:09am
Msg #495423
<<Officially called the OCC Bulletin 2013-29, the updated guidance is largely focused on the development of a well-documented oversight program and clear reporting strategies. Organizations will be required to show they have created a risk management plan that ensures the ongoing monitoring and reporting of all of their providers’ activities and performance, as well as a contingency plan for terminating third party relationships.>>
That is exactly what Service Link is doing now with its webinar for NSA's that are registered with them. The NSA's do not have to comply if they don't want to. I thought them telling me what to wear was both hilarious and insulting, but its their proof that they are in compliance with the OCC Bulletin and CFPB compliance.
The SPeW groups wants to try to regulate us, their way, so that they have proof to show the feds that they are in compliance, if asked to show "proof" thereof.
None of us have to follow this group, or these ridiculous standards, we know how to do our jobs. If a newbie wants to use these standards as a jump off on how to act on a nsa, then so be it, for them at least its worth the read.
Lots of hype about this crap of standards and I'm done with all of it. If the national TC's want my business, I'm like the majority on this board, then they'll seek me out directly and not by any other organizations.
My .02 FWIW...
| Reply by Daniel Stephens on 12/7/13 6:54pm
Msg #495473
I brought that same issue up on another forum, I used the my law book to get the definition of Tlhird Party. Most every one po-pooed my statement that we as notaries are not the Third Party as defined by the OCC Bulletin. They did not under stand. But this posted by Rivera states it quite well. Another party infers that Dodd-Frank requires annual BGC for notaries I have not found that reference as of yet. Anyone having thoughts should join the American Notary Signing Agents Association, Inc. We are going to take the fight to them, and show it for what it is. If they want standards then the Federal Government needs to clearly state what the requirements will be all the way down to the NSA's or Attorneys who complete the signing process for the client and lender. So far all those requirements are guidelines and are not definitive as to what they want. Lets all get in the same canoe and paddle together. The bottom up change will not work as stated for another reason. We start it down at the bottom and someone in the middle or top does not agree and wants something more. I don't care about less, unless it reduces the cost to my bottom line. If we all contact our government reps at the state and federal level and through our notary organizations other than the NNA who has a monetary interest in this agenda should do so. Our voices will be heard. As a society lately it seems the minority voice gets heard over the majority to start voicing your opinions to them.
| Reply by CarolF/NC on 12/7/13 9:08pm
Msg #495487
Go Daniel. I have contacted my
State agencies and they are reviewing several aspects. Sent some inquires to my state legislators and federal agencies as well. Waiting on responses.
| Reply by MAC/WA on 12/9/13 1:34pm
Msg #495604
Are you advertising for the ANSA.org? n/m
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