For many financial institutions, the fear of citation for unlicensed activity, including the advertising of financial products, is always at top of mind. The reality is that both unlicensed and licensed employees will have social media accounts. Many of them may identify themselves as an employee within your organization on those pages. Unlicensed employees have more restrictions than licensed employees when it comes to posting social media content relating to the real estate finance industry. Loan Originators use social media as a tool to attract business, leveraging their licensed status to post links and encourage people to apply for loans. What happens when unlicensed employees begin to engage in the same type of social media activity? Certain content could lead to regulatory troubles for the lender.
Social media has become a great platform for networking and soliciting business. A lot of promotional activity occurs even before a prospective client begins the formal loan process. All employees should be encouraged to use social media in a way that positively promotes the company while also being mindful of the forward-facing content that is distributed. Let’s take a look at the privacy laws that dictate what can and cannot be posted.
Privacy and data security for financial institutions is governed by the Gramm-Leach-Bliley Act (GLBA). Regulation P covers data privacy, and the Safeguards Rule covers data security. This is a complex piece of legislation and each state has its own breach notification statute, but some Mortgage Bankers are pursuing a federal threshold to simplify this reporting. Data protection has become a critical part of every company’s business strategy to earn the trust of customers and avoid regulatory issues down the line. Social media has recently become a priority because of how many people use it and the range of content that can be posted.
Unlicensed employees should take extra care in considering the type of content they post on social media. Some examples of improper posting include:
× Distributing loan application links
× Promoting the lender’s name on a personal profile
× Using a “Contact Us” form to solicit business
Scrutiny is more intense on sites such as Alignable and LinkedIn since those are professional networks. The people who have accounts on these platforms will be more aware of improper conduct involving unlicensed employees who solicit business in unauthorized ways. Additionally, these users will have the company’s name attached to their profile which opens the company up to liability.
To recap, unlicensed employees need to be careful about what they post on social media. We covered some examples of unlicensed activity and the implications for failing to comply with the current privacy laws under the Gramm-Leach-Bliley Act. Privacy and data security is essential in today’s business world, and employees should be mindful not to post links or forms that could put a customer’s information in jeopardy. By working collaboratively with their Compliance Department, all unlicensed employees should discuss what is appropriate in the lending world of social media.