While lenders who sell reverse mortgages do not have to be NRMLA members, membership provides a groundwork of trust among members and the public, partly because the NRMLA application requires people to attest to compliance with the code on a yearly basis, Schiffman says. “Everyone, in a manner of speaking, is required to take an oath and repeat that oath once per year,” he says. NRMLA’s compliance system allows members, as well as anyone else who sees an issue with how a reverse mortgage is handled, to lodge concerns about other members or against nonmembers. NRMLA will review all complaints—except in certain cases where they are filed anonymously—and act upon them depending upon the circumstances and the findings, Schiffman says. “I would say that without doing a formal tally, I believe that 90 to 95 percent of the complaints NRMLA receives relate to deceptive marketing and advertising practices,” he says. One of the values in the NRMLA code is fairness, which lists as one of its rules a statement related to advertising: “NRMLA Members shall not, directly or indirectly, solicit or communicate with consumers through false or misleading or deceptive or unfair communications or advertisements or in any manner inconsistent with applicable law.” Over the years, the NRMLA Ethics Committee has issued various advisory opinions, including two directly related to advertising practices. The code is a “breathing, livable document” that allows NRMLA to update it when needed, Schiffman points out. The first advisory was in 2008, followed by another advisory in 2010. The various points in the advisories formed “The Dirty Dozen.” “Unethical Advertising expressly violates the NRMLA Code of Ethics,” one of the advisories states. “There is no place in NRMLA for NRMLA Members who engage in Unethical Advertising.” Milano says the advisories and “The Dirty Dozen” have stood the test of time, and education and diligence are keys to ensuring that companies stay in compliance. “Learn what laws apply to you. Learn how the code of ethics works in a legal framework,” Milano says. “Both are intended to protect customers but also the long-term reputation of the reverse mortgage industry.” Useful Links Here are some useful links concerning advertising and marketing practices: • Mortgage Acts and Practices–Advertising (MAP) Rule: This link goes to a PDF that spells out the details of this regulation: www.govinfo.gov/content/pkg/CFR-2012-title12-vol8/pdf/CFR-2012-title12-vol8-part1014.pdf. • Consumer Financial Protection Bureau (CFPB) Advertising Examination Guide: This guide is a playbook that examiners use to ensure rules and regulations are being followed. Module two covers advertising and marketing, including Truth In Lending Act Regulation Z, Real Estate Settlement Procedures Act (Regulation X), SAFE Act (Regulation G), Fair Credit Reporting Act (Regulation V), and MAP regulations: files.consumerfinance.gov/f/documents/cfpb_mortgage-origination-examination-procedures_2021-12.pdf. • CFPB Enforcement Actions: This website lists the various actions taken by the agency involving the entities it regulates, including reverse mortgage lenders: www.consumerfinance.gov/enforcement/actions. • Federal Trade Commission (FTC): This link offers a guide for small businesses on advertising in a Q&A format: www.ftc.gov/business-guidance/resources/advertising-faqs-guide-small-business. • NRMLA “Code of Ethics & Professional Responsibility”: This link makes the code available to the public, as well as NRMLA members: www.nrmlaonline.org/about/nrmla-code-of-ethics-professional-responsibility. Source: Weiner Brodsky Kider PC REVERSE MORTGAGE / SEPTEMBER–OCTOBER 2022 31
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