Signing Agent Impact: What If Dodd-Frank Is Repealed? | NNA
It’s no secret that the Notary Signing Agent profession has been undergoing significant changes in the past five years. Lenders have been requiring greater levels of professionalism, training and certification from NSAs, largely due to the sweeping reforms brought about by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
With a new President in the White House, Congress has been discussing the possibility of repealing or amending Dodd-Frank. What would this mean for NSAs? Would it mean an end to annual background screenings? Would training and certification expectations be rolled back?
Probably not. Here’s why.
The provision of Dodd-Frank that most affected Notaries was the creation of a new federal agency — the Consumer Financial Protection Bureau (CFPB) — specifically charged with overseeing the lender-borrower relationship and protecting the borrower’s interests.
The CFPB quickly began issuing guidelines and regulations to lenders about vetting and managing the service providers they use in the mortgage origination process — including title companies, settlement services and NSAs. The intent was to ensure that all service providers lenders used had the training, qualifications and understanding to comply with consumer financial protection laws.
The most significant measure affecting Notaries was the TILA-RESPA Integrated Disclosures Rule (TRID), which went into effect in late 2015.
Evolving Standards For NSAs
To meet the CFPB’s expectations, lenders and the industries that serve them have been developing common standards to ensure that all service providers comply with consumer financial protection laws.
The Signing Professionals Workgroup (SPW), for example, published a set of recommended Signing Agent standards in 2013. Last year, the American Land Title Association updated its Title Insurance and Settlement Company Best Practices to include recommendations for vetting and overseeing Signing Agents.
While the higher standard of care for NSAs has come about because of Dodd-Frank and the CFPB, it likely won’t disappear if the act is repealed or amended.
Protecting Borrowers Is Good Business
In the past decade, consumers have become vastly more sensitive to threats to their financial well-being because of careless handling of their personal information. And the mortgage industry recognizes that it is just good business to protect that information and make sure the borrower has a positive experience.
At the same time, lenders, title companies and settlement services are acutely aware that NSAs control borrowers’ information in an unsupervised environment. That’s why it is important for Signing Agents to possess the right qualifications — including the lack of a criminal record.
The last thing any lender wants to hear is that they sent a convicted murderer or someone who has committed bank fraud into a borrower’s home with a loan package.
Even without Dodd-Frank and the CFPB, the industry is still subject to court actions and sanctions by other regulatory agencies.
So whatever happens in Washington, D.C., in the coming months, it will likely be business as usual for NSAs across the country.