ALTA Best Practices Compliance RequirementsFor years, lenders have felt pressure from regulatory organizations, such as the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC), to demonstrate that they exercise oversight in how their title agents treat their consumers. Thus, ALTA created a set of best practices that lenders can use as a compliance benchmark to monitor title agents compliance with industry standards.

Among lenders, a common theme is that they are using ALTA Best Practices as the compliance benchmark for title agents. The issue is that many lenders have “low vision” of what third-party or CPA assurance on compliance they are going to require. Although ALTA and the lenders have voiced their concerns, no regulatory organization has issued any further directives regarding the lenders’ use of ALTA Best Practices to monitor their title agents’ compliance with regulatory requirements – nor have regulators indicated what level of assurance should be required. Instead, some regulators may choose to inform lenders about their supervision and monitoring compliance requirements individually.

In an effort to help clarify compliance requirements for lenders and title agents, ALTA has urged the CFPB to issue a public statement in support of ALTA Best Practices. Until the CFPB makes such an announcement, lenders typically monitor their title agents in one of three ways:

1) They require title agents to provide an attestation certification report on their ALTA Best Practices compliance (often through an independent third-party, such as a CPA).

2) They require some evidence (e.g. an engagement letter related to the compliance certification report) to demonstrate that the title agent is working toward becoming compliant and obtaining a certification report.

3) They require a self-certification from title agents on their ALTA Best Practice compliance.

From a non-regulatory perspective, lenders could start using only compliant title agents. Recently, Bank of America issued a statement encouraging their title agents to become ALTA Best Practices certified. Because lenders are increasingly asking for third-party or CPA attestation or certification reports regarding ALTA Best Practices compliance, it is important for title agents to keep these standards away from their “blind spots.” In other words, title agents should fully understand what ALTA Best Practices are, why they are so important for the title and settlement industry, and how to comply and demonstrate compliance with them.

CRI Can Help Clear Your ALTA Best Practices Compliance Vision

There is still some confusion over whether regulatory organizations see eye-to-eye with ALTA Best Practices. Nonetheless, there is little question that lenders are relying more on ALTA’s Best Practices standards to manage their title agents and keep their businesses in plain sight. If you need assistance keeping ALTA Best Practices compliance in your visual field, then contact CRI. Through our readiness assessment, we can help you identify opportunities for improvement and devise strategies to reach your ALTA Best Practices compliance goals. Once you are compliant, we can work with you to provide the compliance certification report that will keep you on your lender’s “approved list.”