First Federal and Loan Association

Nearly four years ago when First Federal and Loan Association of Valdosta (Ga.) set out to overhaul its mortgage platform the $160-million financial institution was also seeking to automate its Home Mortgage Disclosure Act (HMDA) Community Reinvestment Act (CRA) reporting. That quest ended with Laguna Hills, Calif.-based QuestSoft, a provider of HMDA and CRA compliance solutions and geocoding services for lenders.

Businessmen in Valdosta/Lowndes County near the Georgia-Florida state line founded First Federal in 1934. Since that time, First Federal has developed with the area. Today, the bank is a full-service institution with three branches and a comprehensive complement of deposit, checking and loan products, including Internet and telephone banking. "You name it we got it," says Shirley Hodges, assistant vice president and mortgage department manager at First Federal, which has 1725 total loan customers and $4 million on deposit.

The increased loan production and associated compliance responsibilities prompted the financial institution to look for help. "We were changing our mortgage and consumer loan software," explains Hodges. "We wanted something that would do our HMDA and CMA reporting...Compliance changes so much, and it is so much to keep up with."

Search, Implementation and Results

The bank's search process lasted about four months, including a visit to an annual banking conference in Orlando, Fla. Based on its research and recommendations by other bankers, First Federal decided to implement QuestSoft's HMDA RELIEF, CRA RELIEF, and Instant Geocoder in conjunction with easyLENDER Loan Origination Software from Fiserv, one of many QuestSoft interface partners.

"First Federal Savings & Loan initially became a QuestSoft customer when it purchased Fiserv easyLENDER and received HMDA RELIEF as part of a package," says Leonard Ryan, founder and president of QuestSoft. He adds, "At the same time, they also bought our CRA RELIEF and Instant Geocoder products."

First Federal purchased and implemented the QuestSoft's products in 2003 –

· HMDA RELIEF –identifies and imports loan records, automatically re-verifies census tracts for accuracy, provides quality and validity error conditions and quarterly compliance updates, electronically submits all current year reports in regulator formats, and exports LAR records for special presentations.

· CRA RELIEF –is a risk management solution that fully summarizes a financial institution's CRA data through import options and drop-down menus to guarantee the institution's compliance submissions meet all government requirements. CRA RELIEF imports loan records, automatically provides address geocoding, maintains community development loan information, electronically submits the compliance report. Plus CRA RELIEF stores branch, LPO and Loan Team data can for targeted performance analysis as well as for report distribution to senior management and the board of directors by email.

· Instant Geocoder – provides address verification and census tract lookup capabilities.

"The HMDA RELIEF and CRA RELIEF software packages installed like a video game and the bank's compliance officer was operational and importing data from easyLENDER within about 45 minutes. No formal training was needed, because we design the software to simplify the compliance process enough to eliminate the need for any training beyond a simple 20 minute phone call, which in this case was not even needed," explains Ryan.

"I needed something that would make our reporting easy," says Hodges recalling the painstaking manual process of recording information on a spreadsheet and then hoping the right information was accessible in the reports.

QuestSoft has automated the process. First Federal's latest HMDA report was just processed in February using HMDA RELIEF. "It didn't take me that long to do a register for the whole year and send in the report," explains Hodges. "All the necessary information gets pulled from easyLENDER." Even better, "It came back without any errors."

CRA RELIEF pulls different information, says Hodges. CRA RELIEF maintains community-development loan information thereby eliminating the need for laborious record keeping. The program also maintains LMI identification by geography or income displayed and ensures that low/moderate versus middle/upper records are not arbitrarily – or accidentally – excluded.

"Before we would have to manually go in for each loan we closed and manually pull in the information from there. If data was not entered on the spreadsheet "I would not balance out," says Hodges. Now "Instead of picking and choosing from my spreadsheet, [CRA RELIEF] pulls everything in from easyLENDER. So I can just hand the reports to the examiner."

Aftermath

Converting the regulatory chores from the arduous manual maintenance and reporting process to automated technology, maintains Hodges, has "Already paid for itself twice over," just in terms of reducing the staffing needed, and the hours saved.

QuestSoft also continues to be a valuable ally to First Federal. "The folks at QuestSoft are just fantastic. They are right there with answers to any questions," says Hodges, who is not bashful about recommending the company to other financial institutions. "Let QuestSoft learn what your institution needs and they will let you know what they can do."