Addressing High HMDA Error Rate in Mortgage Department | CRCM Exam
Question
A bank has a large mortgage department as well as a high HMDA error rate. An expensive software program could automate the process, but the business unit manager does not want to purchase the software because of its expense. Though it is not as efficient, the manager prefers to make some improvements to the manual process, add some more robust monitoring procedures, and opt not to purchase the software. What should the compliance professional do?
Answers
Explanations
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A. B. C. D.C
The correct answer to this question is C: Document the fact that the level of risk present with manual systems is acceptable to the mortgage department business unit.
As a compliance professional, it is important to assess and manage the risk associated with the mortgage department's high HMDA error rate. The business unit manager's preference to improve the manual process and monitoring procedures rather than purchase an expensive software program may be a viable option, but it is important to ensure that the risk level associated with this decision is acceptable.
As such, the compliance professional should document the risk assessment of the manual process and monitoring procedures and communicate the results to the relevant parties, such as the business unit manager, senior management, and the board of directors. This documentation should clearly outline the risks associated with the current manual process, the potential benefits of purchasing the software program, and the costs and feasibility of both options.
It is also important to note that the compliance professional's role is not to force the business unit manager to purchase the software program. Rather, their role is to assess and manage risk, and to provide guidance and recommendations to the business unit manager and senior management to make informed decisions.
In summary, the compliance professional should document the risk assessment of the manual process and monitoring procedures, communicate the results to relevant parties, and provide guidance and recommendations to help manage the risk associated with the high HMDA error rate in the mortgage department.
