IMM, a provider of innovative eSignature, workflow and document solutions for financial institutions, today shared that its Document Exchange solution meets all closed-end lending requirements and assists financial institutions to easily transition from an open-end model or institute a blended lending strategy.
Complying with the changes to Regulation Z's open-end credit rules, originally put forth in 2009 and now governed by the Consumer Financial Protection Bureau (CFPB), have challenged many credit unions and banks that must implement appropriate policy and procedures to adhere to the requirements for a multi-featured open-end lending (MFOEL) structure. As a result, there are a significant number of institutions that have moved to a closed-end or blended lending plan. Bill Klewin, director of regulatory compliance at CUNA Mutual Group, recently stated that the number of credit unions using an open-ended lending process has dropped to approximately less than 1,200 or 1,500 as opposed to the 3,400 in 2010.
IMM's Document Exchange enhances closed-end lending functions by providing consumer convenience as well as reduced institutional operating costs and risk. This lending model requires a new signature for each new disclosure, closing, etc. Rather than needing the borrower(s) to schedule an appointment at the branch (for each required transaction/document), IMM's secure, cloud-based document delivery and eSignature capture technology enables the transaction to be fulfilled from virtually any location, at any time. Additionally, taking this process out of the branch replaces the physical paper trail and frees credit union or bank employees to focus on other tasks that can drive new business.
"Typically closed-end lending entails a lot of paper, in-branch appointments and time - electronic documents and eSignatures change all that," said John Levy, EVP and co-founder of IMM. "Also, financial institutions are really benefiting from risk mitigated with the comeback of closed-ended lending rather than getting just a snapshot of consumers' credit at initial account opening, which is not sufficient anymore. To limit exposure, credit unions will now evaluate changes in an applicant's creditworthiness for a specific lending request allowing for more informed decision making. With Document Exchange, additional paperwork does not become an overwhelming burden for the financial institution or the consumer."
Document Exchange is powered by Adobe® EchoSign® to provide greater efficiencies, cost savings and user convenience via an intuitive, hosted experience that is browser- and device-agnostic.