The following article was distributed to members of the Tennessee Land Title Association.
If you thought that the American Land Title Association (ALTA) Best Practices were just another passing fad or knee-jerk reaction to another new regulation, think again. In a July 10 article, ALTA announced that its Board of Governors had approved a motion encouraging its members to perform a self-assessment of their adoption of ALTA’s Best Practices no later than September 2014. With this timeframe now in place and an official nudge from ALTA, efforts toward implementation are moving forward.
The good news is that title companies have until the end of September to complete this self-assessment, but performing the self-assessment is no small task. To get started, most title companies should focus on one Best Practice “pillar” at a time, since tackling the whole process can be somewhat overwhelming.
ALTA’s Best Practices Task Force has developed an “Assessment Readiness Guide” tool (http://www.alta.org/bestpractices/documents.cfm) to help members determine preparedness to undergo an assessment in accordance with ALTA’s Best Practices Assessment Procedures. ALTA will roll out a guide for each pillar throughout the coming weeks.
Pillar 1, which is divided into two parts, addresses establishing and maintaining the required license(s) to conduct the business of title insurance and settlement services. Part 1 requires you to document business and demographic information. Part 2 is a questionnaire asking specific questions about licenses and ALTA membership. Also included in the guide is an appendix with templates for documenting licenses, ALTA Policy Forms, and Policies and Procedures.
Written procedures are not a Best Practices requirement for Pillar 1 Licenses and Pillar 6 Insurance; however, it is recommended that you develop them to help you maintain the appropriate licenses and insurance.
Below is a suggested structure for your Pillar 1 policies and procedures:
- Documentation of ALTA’s Best Practice 1.
- Policy indicating your company will comply with ALTA’s Best Practice 1.
- Procedures for establishing and maintaining current company licensing.
- Procedures for establishing and maintaining individual licensing.
- Procedures for establishing and maintaining appropriate compliance with ALTA’s Policy Forms licensing requirements.
What is the benefit of getting on board with ALTA’s challenge to complete your self-assessment by September 2014? Competitive advantage! Once you have completed the self-assessment, you should immediately communicate your compliance program to all of your lending customers.
With the Consumer Financial Protection Bureau’s (CFPB) focus on protecting consumers, along with the lender’s increased accountability over third-party vendor relationships, settlement and title companies will have a competitive advantage when they communicate their compliance with consumer protection regulations. Although assurance of a title company’s compliance with sound policies and procedures has been non-existent, the overarching need has been there for years and ALTA has come up with a solution. Step one is ALTA Best Practices implementation, step two is self-assessment, and step three is independent certification. Make sure to get on board, or you may find yourself left behind.
If you have questions about ALTA Best Practices services or would like to request a speaker on this topic, contact Debra Gentry at (800) 270-9629.