For experienced compliance professionals, the question isn't whether you understand how exams work — it's whether you're tracking what's changing. In a recent Compliance & Coffee webinar, Jeremy Windham of the Alabama Banking Department shared what regulators are seeing most frequently in examinations today, and what the evolving technology landscape means for how those exams are conducted.
As the mortgage landscape continues to evolve, so too do the trends emerging in state examination findings. Windham shed light on some of the patterns regulators are seeing most frequently — and the message to compliance teams is clear: the basics still matter. Social media remains a consistent source of findings, particularly around advertised rates and referral relationships. Windham was candid about the RESPA-related activity his office continues to encounter, noting it was "absolutely astonishing what some people would do for a little bit of business."
The dual capacity issue — real estate agents also acting as loan officers — has also been a growing area of concern, with Windham warning that having the same individual serve both roles on a transaction is "an absolute no-no, because you're inviting fraud in."
On the broader regulatory front, Windham pushed back firmly on the notion that a reduced federal presence means reduced scrutiny at the state level: "Don't think for a minute, because they decided to cut-staff it, that states aren't looking. We're looking." In fact, Windham noted that states are increasingly coordinating through multi-state exam processes, sharing findings and trends across state lines. For compliance professionals, the message is consistent — whether it's advertising, referral relationships, or loan file accuracy, the fundamentals of "operating honestly and fairly" remain the standard by which examiners are measuring institutions today.
Consumer complaints are far more than a customer service issue — they are an active input into the state examination process. Jeremy Windham of the Alabama Banking Department explained that complaints are reviewed as they come in, with examiners making a determination on urgency: "If it's something immediate, then we're gonna change schedules and go see them right then."
And it's not just consumers who file — competitors and even internal employees can trigger a review. As Windham noted, "We're always going to be open to the public to file a consumer complaint, or open to your competition filing a concern." Before an examiner even steps foot in the door, they are already researching the company's complaint history: "Is there anything from the last report I need to be aware of? Is there any complaints that are still outstanding, or if there are complaints, what was the nature of the complaints?" The nature of a complaint can also dramatically shift an examiner's focus and timeline — "It can really change our calendar and what we're doing on any day." For compliance teams, the takeaway is clear: complaints don't just impact customer relationships, they shape when, why, and how deeply a regulator may come knocking.
While not every complaint leads to an exam, they can act as the paramount reason for an exam opening outside of the typical 24 month exam cycle.
Complaints are not just noise, they are signals to regulators as to how institutions are engaging with their consumer base.
The future of state mortgage examinations is being reshaped by compliance technology, and according to Jeremy Windham of the Alabama Banking Department, that future is arriving faster than many may realize. At the center of this shift is the Mortgage Compliance Dataset (MCD), a standardized data set developed through a partnership between MISMO and CSBS that is enabling regulators to conduct loan file review at a scale and speed previously unimaginable.
Windham painted a vivid picture of what this looks like in practice: "In a world where I have the MCD, and it's a complete MCD, loan file review for thousands of loans just took me minutes. Not days, not weeks, not years." Given that loan file review has previously consumed "roughly 70–90% of exam time," the efficiency implications are enormous — both for regulators and for the institutions they examine.
But perhaps the most empowering aspect of this shift is that the same technology is available to compliance teams right now, without waiting for an examiner to arrive. As Windham urged, "Don't wait for us to come tell you something's going wrong." He was equally candid about the lessons learned along the way, acknowledging that early adoption wasn't seamless: "Technology didn't fail us. We'd probably fail technology a lot. We didn't communicate like we should as regulators." For compliance professionals, the call to action is urgent — "If there's ever been a time for the iron to strike right now, it is now, because this is spreading so fast that you should be trying to get at least caught up with the technology that will be introduced."
The message is clear: compliance technology is no longer a nice-to-have. It is rapidly becoming the new standard by which examinations are conducted, and the institutions that embrace it early will be best positioned when regulators come knocking.
The full Compliance & Coffee session with Jeremy Windham goes deeper on all of these topics — including the MCD, multi-state coordination, and what compliance leaders should be doing right now to get ahead of the curve. Watch it on demand and share it with your team.