Is your social presence up to regulatory snuff?

There’s quite the buzz around “social media” and the importance of using it on a regular basis to grow your digital platform, but are you using it correctly from a regulatory standpoint? Melissa Thomas from ActiveComply discusses the do’s and don’ts to keeping your social media profiles and posts compliant. 

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Transcript

 Stephanie: (00:03)
Welcome to Mortgage Connects by. MGIC bringing you the latest insights from top mortgage professionals around the industry. I'm your host, Stephanie Budnik. Today, we'll be talking to Melissa Thomas, who is head of compliance at ActiveComply. Well, Melissa actively works with lender partners to develop and execute social media policies and procedures to fit their needs. Melissa has acted as a social media compliance panelist for the mortgage collaborative housing wire and other financial industry publications. Hi, Melissa. Welcome. We're so excited to have you here today.

Melissa: (00:37)
Absolutely. Thanks for inviting me, Stephanie. Yes.

Stephanie: (00:40)
I first want to know a little bit more about ActiveComply and what exactly it is. Can you tell us a little bit more?

Melissa: (00:46)
Sure. That's my background, right. ActiveComply is a social media monitoring and website archival platform that was built by the mortgage industry for the mortgage industry. And what I really mean by that is, is that we came into being because two neighbors had lunch. One being the CEO of a top 20 mortgage lender and the other being a software developer and over the course of neighbors having paninis together, the CEO is discussing how he had recently run into some issues with social media monitoring. He's required to do it. But it's a really daunting and expensive task. He was using a current provider in the industry and he just wasn't happy with the reporting or the customer service. So having that conversation a light bulb went off for the software developer where he said, wait a second. You know, I have some of this existing technology that sources publicly available information on companies and puts that together and data visualizations and the like, you know what I think I can build to something like that around social media monitoring. And so with that ActiveComply came into being first, it was a program that was used just by that specific lender. But really in the past year or so, we've really taken the software to market, just show other mortgage lenders, how we can help them just the same. That's super

Stephanie: (02:03)
Exciting. I love that. And meeting of the minds in the back, like in the backyard, how things -

Melissa: (02:08)
Right? -Coming together to solve problems that were, you know, a gap in the industry beforehand and having that insight of this is how I want it to work. This is what would be useful for me, as opposed to some of the other providers out there that are useful for like the medical industry or, or hospitality, where it takes a lot more effort to migrate that over into our very niche industry. Sure.

Stephanie: (02:31)
Yeah. Our industry is very niche. I know you talked about compliance and talking about the compliance of social. Thinking about that on an individual level, from a compliance perspective, what is something that you think is essential to have on your social profile?

Melissa: (02:48)
Oh, that's a great question. And I like to point out that social media profiles is where we see the vast majority of regulatory citations. Profiles are really low hanging fruit for regulators. You might have a post on social media. That's not so great has multiple issues, but it might get buried and a regulator never sees it. But those profiles are really business cards and they're front and center. So a regulator can grab onto them very easily. Very simply what's expected on a social media profile is what's expected on any other marketing medium that you would have in that particular state or region. So for example, some givens are, you know, having the company name as well as that NMLS ID for the company. Sometimes the branch and NMLS ID is applicable as well as the branch office address, depending on the state.

Melissa: (03:35)
Definitely want the individual LO if they're mentioned their NMLS ID on that profile, for sure. You know, if it's a corporate account it's worth putting all of your state licensing for that particular corporate account, as well as having state licensing for the individual LO that's applicable in that state. And depending on the state, it can get really specific on the requirements. So for example, California is really big about privacy policy. So having a privacy policy link on the profile is definitely advised another one is Washington state. They required the NMLS consumer access link be posted. So there's a lot of individual requirements from a variety of regulatory bodies. It can be kind of tricky to keep up with all of those requirements. And something else to keep in mind is that not all social media is built the same, right? So you get this really big block of text on Facebook business pages, right. But you don't get that much space on Instagram or Twitter bios. So how do you as a lender, you know, strive to be the most compliant that you can be when you're given a limited amount of space. And the answer to that is that a lot of lender partners are making use of tools like Linktree or Bit.lys are you familiar with either of those?

Stephanie: (04:51)
Yeam, I'm familiar with that to an extent with like Bit.lys and creating things that are shorter links to get to other sites,

Melissa: (04:59)
Linktree has definitely blown up for the mortgage industry because it very simply is one universal link that the consumer can click on. If they're looking at a loan officer Instagram page, for example, and it takes them to another page with a bunch of links on it, it does look quite stylish. So kudos to Linktree, but things that are on that page include here's my legal licensing link. My privacy policy link a link to my application portal. Here's some testimonials from other consumers who have used me. Here's a link to my complaint portal, which is required by some states as well. So giving everything that you can to a consumer while being one click away from the profile, that's a great way to make a stronger argument for compliance.

Stephanie: (05:44)
Ok. You see all of this kind of amazes me because I have spoken on so many different platforms and stages about social and things to consider, but sometimes we don't think about the meticulous little pieces that need to be there instead of the big picture and making sure that your, you know, your audience is being targeted correctly to that. I mean, I'm sure you've seen a range and gamut of things that people have done in the past. Can you give us an idea of maybe some common pitfalls that you've seen with social media compliance, whether it's, I think maybe you mentioned some with based on what you need to have listed, but are there any others that stand out to you?

Melissa: (06:22)
Sure. So I, I know that social media is this really great free marketing tool that wasn't there previously, right? So it's out there and it's available and it puts you in front of consumers in this new personalized way. So it's a great tool to make you stuff and you definitely don't want to miss out on it. You know, other lenders making the most use of it, however, it is a medium that is unlike any other for marketing. You know, previously, if, if an LO wanted a brochure, they generally had to go through the marketing department they would make sure it was up to regulatory snuff, and then they'd publish it and provide it. However now loan officers are their own individual marketing departments. This means that they're publishing their own content, which has previously probably never been reviewed. I mean, something that we see at ActiveComply all the time and we can't help, but chuckle is a ton of memes.

Melissa: (07:13)
Right. How can you not use memes on social media, even with your business pages? I see something and I can't help, but laugh. It's great. Great funny content. But one of the pitfalls is okay, is it disparaging to consumers? So something that we see a lot of the time, especially with memes is like, you know, I told my borrower not to get any new credit cards or anything, but they show up you know, right before the closing table with a new car and two new credit cards and then their face palming, or they have a Batman slapping Robin of some sort. So it's somewhat disparaging where they're calling consumers, maybe idiots, or they're saying, why wouldn't they listen to me, this is the biggest problem. So thinking about how that might come off, if you were a consumer that felt kind of intimidated by the lending process and wanting to make sure that the LO isn't going to talk poorly about them behind their back.

Melissa: (08:08)
So some of these are more about brand reputation and consumer facing as well as, you know, regulatory compliance, something else that's really brand reputation top of mind is that social media is inherently personal. So there's a lot of personal life mixed with business. It's very likely that if you have a Twitter account and you're operating out of it for business purposes, that you have a mixture of your personal opinions, political stances, on that social media account as well, which can be really difficult to reconcile if you're a brand that doesn't think that's fairly representative of the company. So how do you as a loan officer make use of your freedom of speech while also making sure that employment isn't jeopardized that you're not going to get a call from HR, right? So it's definitely recommended that you make that individual wall in between social media.

Melissa: (09:01)
So if you have a Twitter account, that's great. Maybe you make a separate one for business purposes, or maybe you use Facebook personal profile, and you've built this really great book of business with 2000 friends, but it's really difficult to get some of these personal accounts up to regulatory snuff, right? You can't add in a legal licensing link on a personal profile as easily as you could a business page. So one of the easy ways to both make regulatory compliance, a breeze, as well as keep that wall in between personal and business is to have those business pages dedicated for that type of interaction on social media. So maybe for example you use that personal Facebook profile and you love your book of business and you don't want to give that up. We hear that all the time. Maybe you have a business page where you do all of your advertising and then you share it to that personal profile from the page. That way consumers have all the necessary information at their fingertips about licensing and about what it is that you do while you can still make use of those interactions on social media.

Stephanie: (10:07)
I like that tip with the sharing, because I've heard that often that they don't want to maintain two platforms that it's a lot more work to do. So, but from a regulatory and a compliance standpoint, it seems that it's almost essential to do so to make sure you're capturing that data correctly and accurately, like, I know if I started a business today, no one would join that business page, you know, right away, because you would be introducing them to something new where you already have that network of individuals that follow you.

Melissa: (10:39)
And to that point, if you're, you know, saying, because we hear all the time from, from loan officers that yes, I have this social media page, but I'm not advertising on it. In which case I would have a follow-up question saying, well, do you disclose what it is that you do? That within itself, you know, saying, I work for this lender in this type of capacity tells consumers that you're an expert on this particular type of service and that they can contact you for those services that within itself, many regulators view that as advertisement. So for example, LinkedIn, you can't help but put what it is that you do and where you do it. Right? So making sure that if you're mentioning who you are, what you do, where you do it, that you also need to include everything, regulatory compliant, licensing numbers, state licensure, equal housing information and the like.

Stephanie: (11:28)
Okay. Those are definitely good things to keep in mind. From an individual perspective, are there other things that you, that they should be conscious of from their organization's viewpoint? Like how an organization may be viewing their activity?

Melissa: (11:44)
Sure. So we had a very busy January with the Capitol riots in DC, one of the things that we did for a lot of our lender partners is we built a very specific trigger term list around keywords that were involved with the Capitol riots because no lender wants to be on the front page for something like that or a current event that could reflect poorly on them as a brand brand protection is really top of mind this year in particular for a lot of our depository and IMB clients that are out there. So keeping in mind, you know, the personal events and things that are out there you know, definitely have an effect on the business outside of regulatory compliance, right? So we had a very busy January around that and we do our best to be top of mind for some of the other things that are ongoing.

Melissa: (12:34)
So social justice movements have been a really big moment for us in the past year or so. So Black Lives Matter , Back the Blue - is that being represented on those business pages with the NMLS ID there have been complaints that some of our lender partners have talked about before they come on board, where the reason that they're signing up with ActiveComply, because they had some consumers reach out about a particular LO or two that had very strong opinions with social justice movements. And is that exclusionary of some consumers, very likely, how do lenders respond to that? That's definitely based on their own personal risk tolerance level, for sure, but being able to keep an eye on what's happening and make those decisions internally so that you have some more control is definitely top of mind.

Stephanie: (13:25)
Okay. And then, so we talked a lot about kind of what the individual was doing and how the individual standpoint was and things you can control at your own level, but as you spoke to and what your organization does, is things on a more corporate level and helps monitor that. Why, what is the need to monitor social media presence from a corporate standpoint versus just an individual worrying about, you know, being pinned more directly?

Melissa: (13:53)
Yeah, so it's definitely the heart of what we do. The FFIEC, which is made up of some familiar faces, right? Like the CFPB, the FDIC, the Federal Reserve, and some others issued guidance in 2013 that really says without reading all 21 or so pages, right? That lenders are responsible for identifying, measuring, monitoring, and even controlling the risks related to social media. And that can be a really daunting task, especially if you have to do this manually. How do you as a compliance team or a corporate team evaluate social media on an ongoing basis and all the risks associated while also answering exams or dealing with different compliance factors internally in the organization, it is a daunting task for any one person or team, right? So if a lender has social media and it's being used, they need to make a social media compliance monitoring system, that's commensurate with the size and scope their use of social media.

Melissa: (14:53)
So many lenders it's, it's the wild west out there where LOs are posting content, but lenders are really the parent for these LOs. They are responsible for that sponsorship of the license. And so they're also responsible for any, uh, regulatory fines that would be associated with a lot of those pitfalls on social media. So lenders are responsible financially you know, with fines and things like that, but also there's the potential loss of licensure, as well as some other items that are more sticky. So for example it's not only regulators that are looking on social media, right? It's also some of those credit bureaus. They're seeing our LOs talking about credit repair. How are LOs using those credit reports that are pulled for the sake of the loan product? Are they sharing those credit reports with a credit repair friend? We have one lender that definitely comes top of mind where on Sunday night on a YouTube channel, one of their LOs was doing a fun podcast video with their credit repair friend and talked about this very thing.

Melissa: (15:54)
Monday morning, they got an email from the bureau that said, Hey, this is completely unallowed. You pull credit reports for one specific reason. You need to remove this, make sure that it never happens again. If we do see it again, we're going to remove your access to credit pulling for 30 days as a penalty. And I don't know a lender alive that can do business without access to credit pulling. So it was a really big scare for that lender and they really had to nip it in the bud and really, you know, talk with all of their LOs about this really sensitive topic and, and how they need to be aware of what they're doing on social media.

Stephanie: (16:29)
There seems to be some big things that could stick out for a lender perspective and why corporately it would matter. I'm sure that you've heard them or have seen them - do you have any industry horror stories that come to mind that you have seen in the recent months?

Melissa: (16:45)
Sure. So just last week, actually, we had seen that one particular LO, I think very absentmindedly was, you know, happening to post a photo of themselves at their work desk. So they were like it's such a great Wednesday, really, you know, pushing the grind and getting things executed and making the money and getting borrowers closed. Right. And it was really sunny and the desk was well lit and everything, and they didn't really think about how a borrower's 1003 was sitting right on their desk. And maybe, you know, when them posting it, they didn't think about that personal consumer information that was on the 1003. But if you wanted to, you could most certainly zoom in and see, you know, social security numbers, names addresses. And so it was really problematic for that lender. Luckily they caught the post when it was posted and they were able to get it taken down immediately before it became a really big issue.

Melissa: (17:42)
But I mean, it, it was definitely absent-minded and we're seeing more and more issues occur through photos as opposed to regular text. Um, one of the things that ActiveComply does is that we offer image scanning through OCR technology. So we were able to pick up different terms on that 1003 and flag it for their review. So that was definitely a saver for that lender. And they think this profusely for that, we were happy to help. Something else that's noteworthy when it comes to images, is that a lot of lender partners have seen LOs post photos of consumers at the closing table of a title company or in front of their new home. And the question really is always what information is being revealed about those consumers. Is it their address, you know, where they're located with that home photo, personal information about their last name and their closing dates, things like that. Did you receive a photo consent form for those borrowers to post the photos? So a lot of things that are miscellaneous and don't necessarily come top of mind can cause a lot of problems later on.

Stephanie: (18:43)
I wouldn't have even thought of some of those things. I mean, obviously I don't know that I would want a picture in front of my new house, maybe like in the office, you know, so that nobody has any of that insights about me for where we just moved to, you know?

Melissa: (18:56)
Sure. Pictures of people's children. That can be a very big deal for parents.

Stephanie: (19:01)
And just verbal consent isn't enough in that capacity to ask like, Hey, this is okay, you have to have written consent.

Melissa: (19:07)
I would say that it would be the safest and most compliant solution to get a standardized photo consent form for something like this, have the borrowers execute it so that, you know, that you're covered because what if later on something comes down the line where, where they've objected to this and it's problematic for some way of how do you protect yourself? It's, it's very difficult to do a "he said, she said" as opposed to look, we have it on paper.

Stephanie: (19:34)
Absolutely. That makes sense. And it's a good thing to remember. I think one of the last things that I just wanted to touch base on is just, what's one of the biggest surprises that you've maybe seen or heard in the last few months? So maybe not a horror story, but whether that's changes or in the midst of the pandemic, anything that comes to mind.

Melissa: (19:53)
The top things that definitely comes top of mind is a platform called Alignable. For anybody who's not familiar with Alignable it is a small business referral website. And that word referral really makes me itchy as a compliance person. I'm instantly thinking of RESPA section eight, kickbacks and the like. And very simply what it does is it says my small business is this, and then you have to find out who made it, you look on the, "our team" section. There is a really troublesome section that's called "our ideal customer" and it is freeform text. So we have seen loan officers put demographic information. "I really like helping single moms find the loan product that fits their lives." Well what about single dads? Are you excluding certain demographics? This is a fair lending issue. So we've seen demographic information. We've also seen, "I really like servicing these parts of town or these particular zip codes is where I do business," which would be a red lining issue.

Melissa: (20:51)
Just the, "our ideal customer" section is problematic in so many ways for our highly regulated industry. There's also of course the referral part of it, right? So going back and forth, you'll see that the LO very often is invited by a realtor partner. And then they're exchanging referrals back and forth below recommendations where we've seen "I'm so, so glad for your continued business. Can't wait to see you later on this year at, at our Christmas party or on the fishing trip," which definitely brings kickbacks top of mind. As well as one instance where we saw, "Yep. Sending some gift cards your way," which is just a flat out problem for section eight, as you know, so we were like, "oh great." We added that to our wall of shame folder that was ongoing for sure. So and something else to keep about with Alignable is that it's highly contagious.

Melissa: (21:43)
So what happens is, that if an LO signs up, it asks, Hey, did you want to invite your whole inbox? And they say, "Yeah, sure. Why not?" And then 2000 emails go out and now you've got processors and other employees signing up and saying, "My small business is this contact me here to learn more about this." And now you've got unlicensed activity. So there's so many pitfalls. And to that point, it just goes to show that not all social media is built the same and some have more inherent risks for our industry in particular than other social media platforms.

Stephanie: (22:17)
With the risk and the differences between the two. Is there one that you would recommend amongst the variety that are available out there for folks in our industry?

Melissa: (22:29)
To use? Sure. So I think that Facebook business pages are a great asset, especially to get in front of consumers. We've definitely seen a spike in the use of Instagram. Instagram now has a modification where as opposed to having just the Instagram page, you can now set up your settings, so that it's a professional account. So that means it's kind of similar to the Facebook business pages. Instagram is now owned by Facebook to where if they turn on that toggle, it's just a settings switch as opposed to a whole new account. Now these loan officers get all this great business analytics that they never got before. Who's visiting my social media posts? How long are they viewing those posts? How can I convert these people over into, you know, paying customers through the use of a CRM or something like that? So it's definitely a great tool to use that gives them a lot of information, but with that comes definitely the thought of targeted ads with those business accounts comes the opportunity to do, you know, targeted ads for consumers.

Melissa: (23:29)
I would caution that that lenders really outline in their social media policy, you know, how they feel about targeted ads and how that's really a big risk for our industry. If you're able to select demographic information or specific areas for targeting again, we're seeing that fair housing and red lining are definitely coming up as issues for targeted ads and regulators are, are asking for that information. So I guess one of the closing items that I would say is definitely take a hard look at your social media policy. You know, the more specific you can get about, you know, pitfalls that you find on social media, the less likely they are to happen, and the less likely an LO will fall into that trap. So help your LOs be prepared and help you know, rally everyone behind your policy.

Stephanie: (24:16)
Well, so these are great insights. I think it's a lot of different pieces to think about that maybe you don't regular basis from whether that be a corporate standpoint or an individual standpoint. So I thank you so much for your time today and your expertise. I hope that our listeners can find some good points and takeaways from all of that you shared with us.

Melissa: (24:37)
Absolutely. And something that's useful for a lot of these lender partners who work with us currently and is available to anybody who visits our website. We do have a very handy dandy, cheat sheet download that is applicable to loan officers. It shows them here are some simple do's and don'ts for social media. How can I make use of this tool without fear of losing my license? So thanks for having me. And I hope that everyone takes a chance to download that cheat sheet.

Stephanie: (25:02)
Absolutely. I did. And I think it's definitely worthwhile. So if you have the opportunity to do so, I encourage listeners to do that as well. Again, Melissa, thank you so much. And we'll talk to you soon.

Melissa: (25:11)
Thanks so much, Stephanie bye-bye.

Stephanie: (25:14)
Thank you so much for listening for all the latest industry insights subscribe to Mortgage Connects with MGIC on Apple, Stitcher, or Spotify, or check out mortgageconnects.com. Until next time.