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New SPW Standards are they really law?
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New SPW Standards are they really law?
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Posted by jaxnotary031 on 11/30/13 3:21pm
Msg #494519

New SPW Standards are they really law?

We are being told these new standards are law, we are being told we can no longer do signings unless we comply, but no one can provide the answer to the million dollar question, are they LAW?

Just about every NSA has been receiving an email or two from their respective signing companies and title agencies, advising of upcoming changes and new laws involving the signing process the signing.

The overall theme of these emails and notices is that unless we submit new BGC and follow new certification standards, you will no longer be in compliance and will not be able to continue to do signings.
The interesting fact about all this is there have been no new laws enacted that would require an NSA to follow along. In all of the referenced texts and information sources being quoted there are no specific mention of NSA’s. The only terminology used is “Third-Party Relationships:”

Are we then to assume that this only applies to NSA’s? Shouldn’t signing services, title companies and attorney also be considered “Third-Party Relationships”?

In a recent posting on LinkedIn, a Signing Service manager referred to the OCC Bulletin #OCC-2013-29 as the source of these new requirements. If one were to look over this bulletin, it speaks in detail on the third party relationship between a lender and any one affiliated with the process.
The bulletin can be found at http://www.occ.gov/news-issuances/bulletins/2013/bulletin-2013-29.html it is titled, Risk Management Guidance

In the summary area it reads:
“This bulletin provides guidance to national banks and federal savings associations (collectively, banks) for assessing and managing risks associated with third-party relationships. A third-party relationship is any business arrangement between a bank and another entity, by contract or otherwise.

The Office of the Comptroller of the Currency (OCC) expects a bank to practice effective risk management regardless of whether the bank performs the activity internally or through a third party. A bank’s use of third parties does not diminish the responsibility of its board of directors and senior management to ensure that the activity is performed in a safe and sound manner and in compliance with applicable laws”

NO where does it states that these are new laws; it states that this is a “guidance” statement for lenders.

However that is not stopping many Singing Services from requiring and even confusing the issues by sending out letters stating the following,
“PLEASE NOTE:

NEW LAWS FOR SIGNING AGENTS GO INTO EFFECT DECEMBER 1, 2013

BACKGROUND CHECKS WILL BE MANDATORY WITH MAJOR LENDERS “
“To be sure; these new requirements are not state law, but rather most major lenders will be implementing this new requirement. We will not be able to hire you for closing unless you have a background check done, “

In an email response from FNF to a NSA, this was the response from FNF when questioning the new requirements,
“If you are already on an approved notary list of one of the FNF settlement service operations you should contact the vendor manager of that particular operation (the office you signed up with) to receive specific information about the notary approval requirements applicable to that state or that operation. As you may know, the Notary Rotary organization is not affiliated with FNF and the Signing Profession Workgroup (SPW) that you referenced is an initiative of the National Notary Association which is not affiliated with FNF either.”

As you can see in the above response from FNF, they even go as far as saying that the SPW is an initiative of the NNA, which is in no way affiliated with FNF.
In my home state of Florida there have been no new laws or rules enacted by the state legislature or SOS’s office.

There are new requirements that will be forthcoming in 2014 issued by the CPFB. These are new requirements being placed on the lenders by the CPFB, but they in no way mandate or state that NSA must now have certifications and BGC on a yearly basis. There is no mention of required testing and recertification, required script verbiage, and all the new requirements being addressed by the SPW.

You would think if there were new laws, then other notary associations such as the American Association of Notaries or The American Society of Notaries would be providing some guidance on these “new laws”.

So next times you hear or receive a letter stating the “new standards” are law or government regulation, you may want to question it. Request a copy of the law. If enough NSA’s question this then, and only then will this issue be resolved.
What do you think??



Reply by SharonMN on 11/30/13 3:25pm
Msg #494520

Law mandates oversight of service providers. SPW is how some lenders have chosen to comply with this oversight provision for signing agents. There are many other ways that would also work.

Reply by C. Rivera Chicago Notary Services on 11/30/13 3:39pm
Msg #494522

The SPew group is using the XYZ as their scapegoat...

...and the XYZ is using the SPeW group by charging $1k a head.

There is NO LAW for NSA's to follow IN ANY STATE that I know of, and I'm keeping a watchful eye on this group.

The group has intimated its members enough so that they are now trying to force us to adhere to the new css title designation and code of conduct, which is seriously flawed, and borders on forcing the css as an employee of SPeW members as supposed to being independent contractors that we are.

Nothing has gone into effect yet.

Just my .02 cents.

Reply by NVLSlady/VA on 11/30/13 4:25pm
Msg #494527

<"In my home state of Florida there have been no new laws or rules enacted by the state legislature or SOS’s office.">

Why would there be? States only commission and/or govern notaries public and title agents.

THE NSA: THE HISTORY

[A Notary Signing Agent (NSA) is a Notary specifically trained to facilitate mortgage signings. NSAs have earned $75 . . . $125 . . . and more to oversee loan signings for lenders, title companies and signing services. From our industry-recognized program, you'll learn how to easily interpret and explain complex mortgage signing documents. Use your Notary skills to become a qualified, competent and confident Certified Notary Signing Agent. And you'll have your industry-required background screening enabling you to work for the major title services organizations. You'll be in high demand.]

[From the you-know-where web page]

What comes to mind is an important (and indisputable) quote: Render (pay back) unto Caesar . . .

We should all get our "coins" out. Check your commission certificates. Whose name is on it?

Now . . . who appointed you an NSA?


Reply by Marian_in_CA on 11/30/13 4:31pm
Msg #494528

In short... NO

No, the SPW's standards are NOT law. They have been created as the result of laws passed, but are not, themselves legal requirements. They are, in fact, wholly voluntary. However, it can get a little ugly... and as many here know, the standards -- which are pretty much just proposed at this point -- are a giant mess because they kid of violate some federal independent contractor rules.

I'm trying to keep this pretty simple...

The only "law" is that certain companies must exercise "oversight" of service providers because they are going to be held accountable for the actions of their contractors. There is no specific detailing as to how or what that entails. This is actually a very generic requirement, but is quite confusing because nobody really knows how to comply with it.

Here's another example that some might understand. The Gramm–Leach–Bliley Act (GLBA) has something called the "Safeguards Rule" -- it requires that certain financial institutions to create a written plan to secure and protect the personal financial information of their customers. Many people seem to think that background checks are a requirement under the GLBA... but they are NOT. They *may* be a requirement under the individual security plan developed by each company, but they are not actually required by Federal law.

See: http://www.business.ftc.gov/documents/bus54-financial-institutions-and-customer-information-complying-safeguards-rule

This Safeguards rule was meant to be generic and non-specific so as not to interfere with business practice, but at the same time create a way for companies to develop a system of accountability for how they handle financial information. And specific rules are that of private businesses creating them, not of the legal system requiring it. So, any company that comes to me and says, "the GLBA requires us to do a BGC on you," I know that they are full of it. I usually respond with, "No, the GLBA requires you to have a written security plan. Please forward a copy of that plan for me to review."

If you read the link above, you'll note that they obviously tell businesses to consider doing certain things as part of that plan...but nowhere is it actually required.

Now, back to the CPFB mandates. The CPFB is mandating that financial institutions are to be held responsible for the actions of their contractors. They are mandating that they "have an effective process for managing the risks of the service provider relationships." The CBFB is simply stating that they expect financial institutions to ensure that consumer risk is lowered through proper management of it's vendors. Now, really, this makes sense. It's not unlike a large corporate home building company making sure that they hire local licensed contractors to perform work. They check them out, make sure they're can do their job, etc.

This link to a CPFB bulletin from 2012 does a pretty good job of explaining it in clear terms:

http://www.consumerfinance.gov/f/201204_cfpb_bulletin_service-providers.pdf

The bulletin goes on, at the end, to list things that these companies should consider doing (but are not limited to nor required to do) to make sure this happens.

Well, here's the fun part... these companies don't want to deal with it. There are no national standards for Notaries, much less signing agents. Some notaries are background checked and fingerprinted, like in CA... and in other states, all you have to do is basically be able to breathe. Then, when it comes to handling real estate financing paperwork, some notaries have lots of experience, some have none.

The SPW has created a "standard" that they feel helps meet a basic level of the CFPB's mandate that they are selling to financial companies. They are telling them, "Hey... if you use one of our notaries you are guaranteed X, Y, and Z so you don't have to deal with that part of the oversight because they meet a minimum standard. You only have to worry about any of your individual company specific requirements.

The NNA is telling notaries that the companies came to THEM (the NNA) to help establish that national standard. I'm not entirely sure that's true. I think, by now, we all know that the NNA played a major role in establishing this group, along with ONE financial company (FAMS) and are now using their marketing clout to sell the standard to financial companies nationwide. They are using a line similar to one they did about the GLBA... saying that the requirements are law, when that's not really true.

Financial companies do NOT have to use a SPW notary. They can use their own set of standards to oversee their vendors.

What this means for us, though, as independent business owners? It means, more than ever that we need to know how to run a business. We need to know the difference between an employee and a contractor. We need to know what a profit margin is and how to maintain one. We need to create our OWN customer privacy procedures and understand our state and federal privacy laws. We need to know how to market our businesses to these financial companies with or without the SPW's help.

Any number of companies can pop up similar to the SPW claiming to screen notaries to an acceptable standard that meets the CFPB mandate. They are just a private organization selling products and services to both notaries and to the financial companies.


Reply by ikando on 11/30/13 8:43pm
Msg #494553

Re: In short... NO

Excellent, Marian. You've covered much of the controversy. Unfortunately because people are basically lazy, and that includes those in title and lending companies as well as state legislators, and because the NNA has such a strong PR capability, many people are misled that what the SPW is putting out IS the law--even though that's NOT CORRECT.

It would be in the best interest of each of us to do as you suggest--learn how to run a business as independent contractors, learn what the federal regulations (GLBA, CFPB and OCC) actually require for our businesses, and not be lazy. If we fall in line with what a private business is saying is mandated, then we deserve what we get.

Reply by JanetK_CA on 12/1/13 3:55am
Msg #494561

Re: In short... NO

Yes, very good summation, Marian. I like this suggested response to anyone who says that it is law:

"No, the GLBA requires you to have a written security plan. Please forward a copy of that plan for me to review."

Having said that, it's the lenders who are required to prove that they have a plan in place and that they are properly supervising their service providers and sub-contractors (which includes us). That means that the lenders can pretty much set up any process they want to prove that they are exercising proper supervision. Unfortunately, it seems that some of them - and title companies like FNF, etc. - have chosen methods that many of us feel goes beyond what is necessary or even reasonable, and the SPW has jumped into the middle of the fray to "help".

We are in no way obligated to go along with any of their requests, but they have the right to make that a condition of receiving work from them. Getting them to change their approach is the challenge that many are now working on, because XYZ appears to be lobbying them and others to adopt the recommended approach developed by the SPW.

I can think of basically three ways for us to respond:

1) ignore it completely and continue to market to whomever is left,

2) try to get the SPW to modify some of the most onerous items in their Code of Conduct to something more tolerable, and try to get something done about the way over-reaching release form FNF is requiring, or

3) to over their heads to try to get some kind of action or pressure applied from the agencies overseeing their compliance with GLBA, and any and all other actual laws related to the financial community.

In fact, some combination of all three might not be a bad idea... However, if any of you decide to pursue either 2 or 3, please do us all a favor and present your communication in a thoughtful, carefully edited and proof-read format, and with a respectful and polite approach. And to whatever extent possible, be solution-oriented. I do think we can have an impact, to some extent, at least.

Reply by DHanson on 11/30/13 6:03pm
Msg #494534

There are a lot of changes and I know this is an effort to enhance our knowledge and keep us up to date. My question is, "With our new certification, are our rates going to increase?"

Reply by Darlin_AL on 11/30/13 6:27pm
Msg #494536

DH Hanso......"gasp!"

see para 1005 part xIIV of the "standards": agents may not collude w/other agents to set fees...or something to that effect. Of course we can set our fee at any level we want--it's just if the hiring parties are "allowed" to pay the fee you set. Like Marian says, keep your eye on your business model to make a profit in your particular market.

Reply by CarolF/NC on 11/30/13 6:40pm
Msg #494538

Hmmm Did fees paid increase when NNA announced

the Certified Notary Signing Agent certification?

Reply by jba/fl on 11/30/13 8:07pm
Msg #494543

Actually, they indicated that there should be price controls

They said that those who were uncertified should be paid $50, those with certification $75.....this caused great distress and anger, further causing many notaries to decide that they were not acting in the best interests of notaries throughout the country, as many were already making much more.

Some of their companies that they pitched with this info decided to lower their offers; many notaries capitulated out of fear of not being able to 'feed their families'. Thus, the great price wars began. Again, many notaries began to say it was great to be doing 10 a day for peanuts, but that was the way things are, and at least they were working and "feeding the kids".

Fees never dropped except for those that felt fear. Fear is an awesome tool in the wrong hands sometimes.

A strong backbone is more powerful.

Reply by jba/fl on 11/30/13 8:11pm
Msg #494547

Oh, forgot:

Then the DOJ (perhaps?) had a little talk with them and they (XYZ) pulled their suggested pricing list. A price fixing mode is not one to be admired it appears.


 
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