As new communication tools emerge and get widely adopted, communicators and legislators alike learn what works and what doesn’t through trial
and error. It is believed, for example, that a father and son hearing George
Carlin’s “seven dirty words” routine on the radio led to the development and
implementation of safe-harbor hours. Then, in the 1990s, the Digital Millennium Copyright Act was enacted as the internet’s global expansion created
new concerns with respect to intellectual property rights.
Nobody could have predicted the meteoric ascension of social media’s
popularity a decade ago, but its influence is undeniable now as it has become engrained in our everyday lives. Need proof? Check out these figures.
21 percent: the global increase in social media use in 2016;
§;Six to seven hours: the amount of time millennials and Gen Xers spend
on social media per week;
52 percent: the share of consumers whose online and offline purchases
were influenced by Facebook in 2015;
20 minutes: the average time a Facebook user spends on the social
media platform per visit; and
47 percent: the share of millennial purchase decisions that are influenced by social media.
The bottom line is: A mortgage company’s target markets are on social
media, and the only thing bigger than the opportunity within social media
is the need for a policy to govern such interactions. By understanding how
existing regulations apply to social media activity, lenders and originators
can avoid costly mistakes, while reaping significant benefits.
The responsible management of social media when marketing and communicating with borrowers requires the same mindfulness necessary for
any external outreach. After all, the wheel isn’t being reinvented; it’s just
turning much, much faster. To accommodate, lenders and mortgage companies need to understand the importance of developing a social media
policy, as well as the role and impact of social media in today’s business.
With the emergence and accessibility of so many social media platforms,
what constitutes advertising from a compliance standpoint isn’t always easy
to define. If a mortgage company promotes the fact that it has been recognized by the local news as a “top loan producer” for example, that is not
considered advertising because the information is coming from an independent source. The promotion of market research or educational materials
that do not solicit business also is not considered advertising.
Social media posts by employees such as “I’m fortunate to work for such
a great lender” are fine as well. If that statement is followed by a solicitation, however, such as “contact us for the best loan possible,” then it crosses
over the safe-post threshold and is subject to regulatory scrutiny. Overall,
if the message promotes a consumer credit transaction, then it becomes
Rivaling the number of social media platforms is the number of laws and
regulations that determine what is appropriate and required. Although many
of these predate the existence of the medium itself, the requirements still
govern how lenders, mortgage companies and their employees must interact on social media.
The SAFE AC T, for example, requires that the NMLS registration number be
provided for each lender or mortgage company and individual loan originator in the initial communication with a consumer. Those communications also
must adhere to any state-specific requirements. State requirements should
not be overlooked because some states require the NMLS data to be provided in a specific sequence and may have additional disclosure requirements.
Electronic communication like e-mails and text messages, which are subject to regulatory scrutiny, also must include this information. This is important to remember when conducting initial communication on social media.
Twitter posts are considered e-mails, for example, but do not provide enough
“The only thing bigger than the
opportunity within social media
is the need for a policy to govern
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