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Contract Cloud Blog

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“Ability to Pay” Aims to Help Lenders and Borrowers

After the 2008 financial crisis and the passage of Dodd-Frank, the newly formed Consumer Financial Protection Bureau (“CFPB”) began writing regulations that, among other things, aim to protect borrowers from predatory lenders.  This post will explore the so-called “ability to pay” provisions of these regulations, which require that a lender certify a borrower has the resources to repay a loan before the lender issues it.  Contract Cloud’s platform helps lenders ensure that they are doing everything necessary to comply with these new regulations.

Before January 10, 2014, borrowers had no legal recourse against lenders who issued mortgages to homebuyers who couldn’t afford them.  In other words, a borrower couldn’t file a lawsuit against a lender complaining that the mortgage couldn’t reasonably be repaid.  There was no federal law prohibiting issuing mortgages to borrowers regardless of the borrower’s ability to repay the mortgage.

However, because of the CFPB regulations, lenders must now ensure that borrowers have the ability to repay their mortgages before they can issue a loan.  If a lender fails to do so, a borrower may, within three years of the loan’s consummation, file a lawsuit claiming the lender failed to consider and verify the borrower’s ability to repay the mortgage. These risks also create issues for potential purchasers of these mortgages on the secondary market.

The lawsuits could prove to be very damaging to lenders in non-compliance with the new regulations.  A successful lawsuit under the ability to repay regulations could result in statutory damages equaling up to three years’ worth of finance charges and fees, as well as actual damages, court costs, and attorney’s fees. A borrower may also assert a violation of the ability to repay rules in a defense to a foreclosure action at any point in the mortgage’s term. A borrower’s increased legal rights under the ability to repay rules will force lenders to perform their due diligence in order to ensure that mortgage loans are issued only to borrowers who exhibit an ability to repay.

Contract Cloud can help.  Contract Cloud’s customizable, easy-to-use platform allows lenders to record audiovisual evidence of borrowers attesting their ability to repay mortgages, thus strengthening lenders’ defenses against borrowers’ claims of non-compliance.  Contract Cloud should be on any lender’s list of compliance and risk management tools.  Visit Contract Cloud for more information and to talk to a representative about how we can help lenders comply with the new CFPB regulations.

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Class Actions and Employment Claims Are Increasing

Last May, global law firm Norton Rose Fulbright released its eleventh annual Litigation Trends Survey, which collects and presents the experiences and opinions of corporate counsel regarding various aspects of litigation and dispute-related matters.  For the survey, an independent research firm surveyed a total of 803 participants from companies headquartered in 26 countries worldwide. The results are a wide-ranging view of top attorneys’ predictions and concerns surrounding litigation trends.

The survey reflects genuine and substantiated anxieties facing corporate counsel across the country. The most important trends in litigation that are impacting American respondents are class actions and employment-related claims.  The respondents were also worried about an uptick in regulatory oversight and scrutiny, as well as the more general trend toward an increasingly litigious environment. Not surprisingly, many U.S. companies have increased their litigation budgets to combat this troublesome trend.

Raising legal budgets is not necessarily the most effective strategy; it is also imperative that corporations maintain strong compliance controls to avoid costly, distracting, and time-consuming disputes in the first place.  Contract Cloud provides exactly that.  Utilizing our patent-pending video technology, Contract Cloud ensures that your company securely retains unambiguous video evidence of a party’s receipt of and consent to compliance verification documents or the terms of a given agreement, such as general business contracts, employee onboarding agreements, employment offer letters, and much, much more.

Contract Cloud’s video contracting service is the first of its kind, and we’re already helping many companies protect themselves against lawsuits and increased regulatory oversight.  Our platform provides the most reliable and secure way of evidencing user identity, capacity, understanding, and intent and should be an essential part of any corporate counsel’s risk management strategy.  To learn more about how Contract Cloud can shield your company from an increasingly litigious world, visit Contract Cloud to speak to a representative today!

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Contract Cloud & Retail Investing

What risks are present for investment platforms, investment advisory firms and broker-dealers in retail investing?

Investment platforms, investment advisory firms and broker-dealers (collectively “Financial Services Providers”) all face exposure to fines from regulators as well as litigation from investors. Regulatory agencies including the Consumer Financial Protection Bureau (“CFPB”), Securities and Exchange Commission (“SEC”), and Financial Industry Regulatory Authority (“FINRA”) can impose large fines and file lawsuits against Financial Services Providers for violation of industry specific rules and federal laws. The costs of these regulatory actions can reach billions of dollars. Financial Services Providers need a better method of protection to defend against regulatory actions and disputes filed by their investors.

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Obtaining Medical Informed Consent

How does Contract Cloud help the patient informed consent process?

Institutional Review Boards (IRBs) and Research Sponsors are required to obtain and document patient informed consent in accordance with the FDA’s Health and Human Services Code of Federal Regulations, Title 21, Chapter 1, Part 50. Contract Cloud helps IRB and Research Sponsor compliance by implementing a digital video witness during the informed consent process. The patent-pending system demonstrates patient identity, timing, understanding and intent, while maintaining patient privacy and platform security.

For information on how IRBs and Research Sponsors can use Contract Cloud to regulate internal operations please see “Contract Cloud & Documenting Medical Informed Consent.”

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Contract Cloud HIPAA Compliance Overview

How does Contract Cloud support HIPAA compliance within its product and platform?

Contract Cloud helps healthcare customers meet compliance requirements by controlling the video attestation process and ensuring all information is authenticated and remains both private and secure.

Contract Cloud shares HIPAA obligations with cloud computing provider, Amazon Web Services (AWS). The terms of this agreement are available upon request and defined in our Business Associate Addendum (BAA). AWS provides Contract Cloud with a secure, durable technology platform with industry-recognized certifications and audits: PCI DSS Level 1, ISO 27001,ISO 9001, FISMA Moderate, and SOC 1/SSAE 16/ISAE 3402.

The AWS services and data centers utilized by Contract Cloud have multiple layers of operational and physical security to ensure the integrity and safety of our data. The AWS services that we utilize, as included our BAA, Amazon EC2 and Amazon S3.

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How Contract Cloud Supports Crowdfunding Platforms

How does Contract Cloud support Rule 506 of Regulation D?

Crowdfunding platforms are allowed to sell securities to “accredited investors” in accordance with Rule 506 of Regulation D (“Reg D”) under Section 4(a)(2) of the Securities Act of 1933. Contract Cloud helps crowdfunding platforms comply with Sections 506(b) and 506(c) by implementing a video attestation process during investor profile creation. The patent-pending system ensures the video is authentic, while maintaining investor privacy and platform security.

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