Step by Step QC Plan Checklist: Financial Institutions

COMPREHENSIVE GUIDE FOR FINANCIAL INSTITUTIONS

Step

by

Step Quality Control Plan Checklist

Introduction The following guide aligns with industry requirements and best practices, ensuring financial institutions remain steadfast in their commitment to quality within the ever-evolving landscape of financial services. By following this guide, financial institutions can not only enhance their operational excellence but also strategically minimize their risk exposure. Throughout this comprehensive guide, we will cover the key components of a sound QC plan, providing valuable insights and practical recommendations.

1

Define the Purpose: Clearly define the purpose and objectives of your Quality Control (QC) plan, emphasizing its role in enhancing operational efficiency, risk mitigation, and overall quality management for the benefit of members and stakeholders.

Identify Your Risk Appetite & Incorporate a “Commitment to Quality” Statement: Articulate your credit union’s risk tolerance and commitment to maintaining high-quality standards, demonstrating a dedication to delivering reliable financial services to members.

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3

Define Separation of Duties, Eliminate Conflict of Interest & Establish Authority: Establish a framework that clearly defines roles, minimizes conflicts of interest, and outlines the authority of each stakeholder in the QC process, ensuring accountability and transparency (principle of least privilege).

Specify Workgroup Structures: • Sampling Requirements: Specify criteria for selecting samples, enabling systematic assessments that align with your credit union’s risk profile and investor / regulatory requirements.

4

• Discretionary Selection Criteria: Define criteria for discretionary reviews, allowing flexibility in targeting unique circumstances and risk factors while maintaining consistency.

• Timeframes: Establish clear timeframes for different stages of the QC process, promoting consistency and timely identification and remediation of potential issues.

Key to Success Leverage technology to streamline sample selection methodologies and slim down overall QC turn times. ACES technology allows financial institutions to automate their QC workflows, increasing operational efficiencies and the overall effectiveness of their QC program. Continual review and updating of sampling strategies ensures that challenges and risks associated with different aspects of credit union operations are effectively tested.

DISCOVER AUTOMATED CRITERIA-BASED SAMPLING

Delineate QC Workgroups: i. ii. iii. iv. v. vi. vii. viii. ix. x.

5

Post-Closing Random Post-Closing Discretionary Pre-Closing / Pre-Funding Non-Originated Early Payment Default Mortgage Servicing Consumer Lending General Loan Servicing Branch Audits Fraud Investigations

Detail Review Workflow: Clearly outline the scope of reviews, components to be assessed, methodologies and terminologies used, and corresponding review policies and procedures.

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Specify Risk Classifications: • • • •

Severity scale Defect taxonomies Overall risk ratings Target defect rate(s)

Key to Success Consistently apply defined risk classifications, terminologies, and review procedures to maintain a uniform and standardized approach. This consistency enhances the reliability of assessments and facilitates clear communication within the QC process as well as with external stakeholders.

EXPLORE ACES MANAGED QUESTIONNAIRES

8

Document Reverifications Policies and Procedures: • • • • • •

Employment / Income Assets / Source of Funds Credit Report Tax Transcripts Field Review Appraisals Occupancy (Primary Residences)

Key to Success Integrate reverification procedures seamlessly into your QC workflow.

This ensures that critical information is assessed efficiently and effectively, promoting comprehensive evaluations and minimizing the risk of oversights and wasted resources.

EXPLORE ACES INTEGRATIONS

Outline Remediation Procedure: Establish a straightforward process for identifying and addressing defects, outlining corrective actions and remediation plans to enhance continuous improvement.

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Key to Success Foster real-time collaboration among stakeholders in the remediation process. A collaborative approach done in real-time enhances the quick identification and resolution of defects, speeding up the continuous improvement cycle of QC. DISCOVER ACES COMMUNICATION PORTAL

10

Define the Process for Identifying & Reporting: • • • •

Fraud Misrepresentation Suspicious Activities (SAR) Investor Self-Reports

Specify Staffing & Training Requirements: Specify the qualifications and training requirements for staff involved in the QC process, ensuring competence and adherence to best practices.

11

Key to Success Ensure staff stay informed on industry standards and best practices. Incorporate automated systems that deliver industry updates, keeping the QC team up-todate and prepared to meet evolving requirements while minimizing the time needed to research and distribute these updates effectively.

EXPLORE ACES MANAGED QUESTIONNAIRES

JOIN THE COMPLIANCE NEWSHUB

12

Delineate GSE and Agency specific requirements: Specify any additional QC requirements mandated by government agencies and Government-Sponsored Enterprise.

• Turn Times • Reverification Attempts and Methods • Collateral Review P&P

Outline QC Reporting Requirements: Clearly define the reporting format, frequency, and distribution channels for QC results, ensuring effective communication with all stakeholders.

13

Key to Success Tailor reporting formats to cater to various stakeholders, ensuring that QC results are communicated effectively at all organizational levels. Provide comprehensive insights that enable informed decision-making.

VIEW EXECUTIVE LEVEL SAMPLE REPORTS

DISCOVER EASE OF REPORTING WITH ACES

14

Outline requirements for Corrective Action & Preventative Action (CAPA) Planning and Tracking: Delineate requirements for CAPA planning and tracking resulting from QC findings, facilitating accountability and progress monitoring.

Quality Control Plan Review: Establish a periodic review process to keep the QC plan aligned with organizational objectives, incorporating insights from industry trends.

15

Key to Success Regularly update your QC plan based on internal historical analyses as well as benchmarking against industry leaders, ensuring it remains dynamic and effective.

MORTGAGE QC TRENDS REPORT

Overall Key to Success It’s important to have a flexible, intuitive and user-defined quality control and compliance platform that you can trust. ACES Quality Management stands as a ready companion, offering an automated quality management software solution designed to streamline and optimize QC processes.

Leveraging quality management technology saves time and resources, providing peace of mind for financial institutions as they exceed the expectations of members and regulators alike.

ACES FLEXIBLY AUDIT TECHNOLOGY

Thrive Mortgage streamlines QC audits and creates transparency with ACES Quality Management

LEARN WHY TOP LENDERS CHOOSE ACES

“With all of the high demands from the industry, if you had an audit from Fannie or Freddie or even FHA, I simply can’t imagine how I would be able to present to them and show them we’re doing what we’re supposed to be doing without ACES.” - Julie Baril, Quality Control Manager at Norcom Mortgage

READ THE SUCCESS STORY

About ACES Quality Management ACES Quality Management is the leading provider of enterprise quality management software for the financial services industry. The nation’s most prominent lenders, servicers and financial institutions rely on ACES Quality Management & Control Software® to improve audit throughput and quality while controlling costs, including:

60 50 8 10 3 5 11 30 %

TOP

OF THE

TOP

OF THE

Independent Mortgage Lenders

Loan Servicers

TOP

TOP

OF THE

OF THE

Credit Unions in the U.S.

Retail Banks

Unlike other quality management platforms, only ACES delivers Flexible Audit Technology, which gives financial institutions the ability to easily manage and configure ACES to meet their specific business needs without having to rely on IT or other outside resources. Using a customer-centric approach, ACES clients get responsive support and access to our industry experts to maximize their investment.

FLEXIBLE AUDIT TECHNOLOGY

CUSTOMERCENTRIC APPROACH

BUILT FOR THE ENTERPRISE

Improve Productivity, Efficiency and Quality While Controlling Cost

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