8-Step Compliance Checklist for Websites (In Under 5 Minutes)

By Leora Ruzin

In today's digital age, an online presence is essential for just about any business, and mortgage companies are no different. However, an extra layer of caution is paramount when it comes to lenders and their websites. Ensuring strict compliance with industry laws and regulations is crucial, and failure to adhere to these regulations can result in severe legal consequences and damage to your company's reputation. 

To best navigate this complex regulatory landscape, it is important to understand the many aspects of a well-constructed website that not only falls in line with industry laws and standards, but also one that attracts potential customers and traffic the right way.  The following compliance checklist covers these essential and necessary steps. 

Why Compliance Matters 

Before we dive into the checklist, it's crucial to understand why compliance is vital for mortgage companies. The mortgage industry isn’t highly regulated in order to give lenders a bureaucratic headache; these laws are in place to protect consumers and maintain the stability of the financial system. Failing to comply with these regulations can lead to penalties, legal actions, and reputational damage. Thankfully, following the law has its own rewards – compliance builds trust with customers, investors, and regulators, which is essential for long-term success. 

The Mortgage Industry Regulatory Landscape 

The mortgage industry’s heavily regulated environment is primarily governed by both federal and state laws. While the federal laws and acts listed below apply to all states, certain states have additional regulations on the books that focus on a variety of more specific corners of the lending market. For more information on your particular state’s unique lender laws, you may want to consider reaching out to your company’s legal counsel for specifics. Some of the major federal regulations that all mortgage companies must comply with include: 

  • Truth in Lending Act (TILA): TILA requires lenders to provide borrowers with clear and accurate information about loan terms and costs. Compliance with TILA is crucial to prevent deceptive practices and ensure transparency. 
  • Real Estate Settlement Procedures Act (RESPA): RESPA regulates the disclosure of settlement costs and prohibits kickbacks and referral fees. This law is meant to protect consumers from unethical practices. 
  • Equal Credit Opportunity Act (ECOA): ECOA prohibits discrimination in all lending practices based on race, color, religion, national origin, sex, marital status, age, or the use of public assistance. This law ensures that all potential borrowers are equal in the eyes of the law and that loans or mortgages cannot be denied on the basis of the above. 
  • Home Mortgage Disclosure Act (HMDA): HMDA mandates how data on mortgage applications, originations, and purchases is collected and reported. Proper compliance with HMDA helps regulators to monitor fair lending practices and identify potential discrimination. 
  • Privacy and Data Security Regulations: It is imperative that companies safeguard customer information and comply with regulations such as the Gramm-Leach-Bliley Act (GLBA) and the Fair Credit Reporting Act (FCRA). Failing to exercise due diligence and leaving customer information vulnerable to outside threats is a serious violation and could lead to stiff financial penalties, or worse. 

8-Step Compliance Checklist for Websites

Now that we have a better understanding of lending’s no-tolerance regulatory landscape, let's delve into the essential steps that should be included in a website compliance checklist for mortgage companies.  

Step 1: Include Clear and Accurate Disclosures 

Ensure that your website provides clear and accurate disclosures about loan terms, interest rates, fees, and any potential risks associated with mortgage products. This step aligns with the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). 

Why It's Necessary: Clear disclosures promote transparency and allow borrowers to make informed decisions about mortgage products, without needing to untangle confusing technobabble designed to deceive. 

Step 2: Prove Your Equal Opportunity and Fair Lending Practices 

Implement and post policies and procedures that promote equal opportunity and fair lending practices. Your website should provide information about non-discrimination policies and fair lending practices that are easily findable, in accordance with the Equal Credit Opportunity Act (ECOA). 

Why It's Necessary: ECOA prohibits discrimination in lending practices, and by prominently displaying your eager compliance with this law, you can avoid legal actions and maintain a positive reputation. 

Step 3: Ensure Privacy and Data Security 

Ensure that your website complies with all pertinent privacy and data security regulations, such as the Gramm-Leach-Bliley Act (GLBA) and the Fair Credit Reporting Act (FCRA). This includes creating a clearly written privacy policy that is available for public viewing, secure data transmission within all steps of the lending process, and data protection measures. 

Why It's Necessary: Protecting customer information is not only a legal requirement but also essential for maintaining trust and credibility with clients. If a lender develops a reputation for haphazard data storage, it can create an enormous legal and reputational roadblock. 

Step 4: Comply with Accessibility Requirements 

Make your website accessible to individuals with disabilities in accordance with the Americans with Disabilities Act (ADA). Ensure that all website content, including documents and videos, is accessible to those with disabilities. 

Why It's Necessary: ADA compliance is just good business. Following ADA rules helps prevent legal issues related to accessibility, and it also opens the door to more potential customers that might otherwise be missed by ignoring accessibility issues. 

Step 5: Verify Thorough Reporting per HMDA 

If your mortgage company is subject to HMDA reporting requirements, it is imperative that your website is set up to collect and report the necessary data accurately. This includes information on loan applications, originations, and purchases. 

Why It's Necessary: Accurate reporting is essential for monitoring fair lending practices and complying with regulatory requirements, including (but not limited to) HMDA. 

Step 6: Secure Your Online Applications 

If your website allows customers to apply for mortgages online, robust security measures that protect customer information during the application process are a must. Taking this step aligns with multiple data security regulations. 

Why It's Necessary: Secure online applications protect sensitive customer data and reduce the risk of data breaches, which can lead to serious legal and reputational consequences. Website hacking is a constant online threat and companies who do not take it seriously will soon find themselves in serious jeopardy, in more ways than one. 

Step 7: Conduct Frequent Compliance Audits 

Setting up a solid website is just the beginning of online compliance. Computers and networks interact with each other thousands of times a day and new threats are ever present. Regularly auditing your website to ensure that all regulatory requirements are met can help stop small issues before they become big ones. This includes reviewing content, disclosures, security measures, and accessibility features, to make sure that the website’s stability is not being threatened. 

Why It's Necessary: Regular audits help identify and address compliance issues proactively, reducing the risk of legal violations and reputational damage. 

Step 8: Schedule In-Depth Training and Education 

Train your staff on compliance requirements and provide ongoing education to keep them updated on critical regulatory changes. This step ensures that your team understands their responsibilities and can help the organization maintain compliance. 

Why It's Necessary: Untrained or poorly trained employees may not know what to look for when examining potential site issues. Well-informed employees are less likely to make compliance-related mistakes, reducing the risk of regulatory violations. 

Don’t Be Grabbed Unprepared 

Compliance is a non-negotiable aspect of operating a mortgage company and, by extension, its website. By following this comprehensive website compliance checklist, mortgage companies can ensure that their online presence not only aligns with their lending goals, but also federal and state industry regulations. This healthy synergy has the happy side effect of promoting transparency and building trust with customers and regulators alike. Failure to comply with these regulations can lead to severe consequences, making compliance a top priority for mortgage companies in the digital age.