The federal government has begun to leverage new rules and is making certain compliance requirements are met by financial institution as dictated by the Gramm-Leach-Bliley Act, with the threat of penalties if not complied with. Under the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) in particular has the authority to take action against institutions violating federal consumer financial laws.
As we understand it, banks and mortgage lenders are simply not going to be able to continue doing business with third-party vendors, including title companies, which do not comply with following proper procedures and best practices for protecting their customers’ nonpublic personal information (NPI).
Lenders are beginning to conduct due diligence on title companies by asking them to complete questionnaires, asking vendors to submit their policies and procedures or by conducting interviews and on-site visits. Come August 1st, 2015, compliance using the new forms under the rules are a requirement. I-T plays an important role in the exchange, storage and handling of electronic data collected before, during and after a transaction.