The Office of the Comptroller of the Currency (OCC) has issued new guidance on when it will tell banks to bring in outside consultants, partially a result of scrutiny over flubbed reviews of past foreclosures in 2009-2010. More than a dozen banks were ordered to hire consultants to scrub foreclosure records for signs of wrongdoing; however, the audits proved to be both time-consuming and cost-intensive. They also delayed the distribution of compensation to eligible borrowers. Ultimately, 13 banks halted the reviews and reached agreements to directly compensate borrowers who were wrongfully foreclosed upon. Now, the OCC could require banks to retain an independent consultant if problems are severe and if it is concerned about their ability to correct the issues on their own.
Banks would have to vet the consultant's credentials and independence and provide that information to the OCC. And the regulator could veto a selection if a review does not meet its standards. "While consultants can provide knowledge, expertise, and additional resources, we must take care to ensure they maintain independence and are subject to appropriate oversight," Comptroller of the Currency Thomas Curry said in a statement.