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Thursday, October 27, 2016

Social Media – Posting News Articles

I'd like to get some clarity on the requirements for posting news articles to different social media channels. We create several articles per month and would like to publish those articles on LinkedIn, Facebook, Instagram, Twitter, and anywhere else we deem appropriate. Are there specific issues with each of the respective channels that we need to be aware of? Any clarity you can offer on this would be greatly appreciated. 

There are a myriad of compliance issues associated with use of social media, but there are no easy or quick answers to your question. While the type of social media selected can impact compliance, the issues with which you should be most concerned are less the result of the channel you are using than the content of what you put there. Because of the rapidly evolving technology associated with social media, the regulators are struggling to identify exactly where consumer protection problems may exist and to formulate regulations that effectively address those problems.

With that in mind, in 2013, the Federal Financial Institutions Examination Council (FFIEC) promulgated “Consumer Compliance Risk Management Guidance” pertaining to the use of Social Media by regulated institutions. Basically, anything a mortgage lender – or even an individual loan officer – puts on social media (including the articles/newsletter referenced in your email, the substantive content thereof, and the identifying information surrounding that content that might lead a prospective borrower to use your services) is subject to regulatory scrutiny with respect to its compliance with a wide range of laws and regulations.

These are listed in the Guidance and include:
  1. the Fair Lending laws, Equal Credit Opportunity Act (Regulation B), and the Fair Housing Act;
  2. the Truth in Lending Act (Regulation Z);
  3. the Real Estate Settlement Procedures Act (RESPA) (Regulation X);
  4. the Fair Debt Collection Practices Act (FDCPA);
  5. Section 5 of the Federal Trade Commission Act and Sections 1031 and 1036 of the Dodd-Frank Act provisions prohibiting “unfair,” “deceptive,” or “abusive” acts or practices (UDAAP);
  6. rules governing payment systems, including the Electronic Funds Transfer Act; 
  7. the Bank Secrecy Act and Anti-Money Laundering laws;
  8. The Community Reinvestment Act;
  9. various laws pertaining to consumer privacy, including the Gramm-Leach-Bliley Act privacy rules and data security guidelines;
  10. the CAN-SPAM Act and Telephone Consumer Protection Act;
  11. the Fair Credit Reporting Act; and 
  12. various state and federal laws relating to fraud, false advertising, and brand identity. 

In addition, lenders need to be very concerned about what is commonly known as “reputation risk” and a whole range of “vendor management” issues with respect to third party service providers. 

These are discussed in more detail in two excellent articles by LCG’s Managing Director, Jonathan Foxx, entitled “Social Media and Networking Compliance” and “Advertising Compliance:Getting Ready for the Banking Examination,” both of which are available on LCG’s website, as separate White Papers or combined in an eBook. These articles provide a basic outline of the applicable legal and compliance issues involved in what you are hoping to do and at least some of the clarification you are looking for.

However, as already indicated, this is a highly complex and developing area of law and regulation and the further you delve into it, the more questions you may have. In that regard, do not be concerned by the fact that many of your competitors may not seem to be worried by any of this – that is because most MLOs and mortgage companies remain relatively uninformed about the significant legal and regulatory risks involved in the use of social media and because the regulatory enforcement mechanisms have not yet caught up to them.

Bottom line: anything you put on social media needs to be screened through the company’s compliance management systems and those systems need to be compliant in every way with the FFIEC Guidance.

Michael Pfeifer
Director/Legal & Regulatory Compliance
Lenders Compliance Group