Which (Crypto) Animal Are You?

Use of crypto-currency in mortgage has been all of the buzz recently, culminating in a proposed bill for its use for Reserves.  Feedback and reception has been mixed, to say the least.

While our team has discussed this a couple times (video links below), our Head of Compliance, John Haring, took the conversation to an interesting new level.

As you read on, we ask: Which Crypto-Animal Are You?

"In the spirit of keeping the discussion positive and productive I do think that as an industry we are at an inflection point. Most of us are going to fall into one of the following groups (until we shift from one group to another):

• Ignore it and hope it goes away (Team Ostrich) - I don't like it; I don't want to know more about it. The policy I recommend is to not address it regardless of what sales or business leaders may want. Crypto is a fad and will just fade away if I wait long enough.
  
  
• I don't hate it but I'm in no rush to adopt it (Team Tortoise) - I'm ambivalent towards it. I'll learn just enough about it to be able to monitor it but am in no rush to adopt it.
  
  
• We need Crypto borrowers now! (Team Hare) - I love disruption and will take a chance on anything. I'm going to go ahead and tell consumers that we'll allow it and figure out the nuances of what we need to do as we go.
  
  
• I will do whatever it takes to stop this (Team Rhino) - I hate disruption. I'm going to actively charge against any attempt to change the status quo and will do whatever it takes to ensure that crypto is never adopted.
  
  
• I've accepted that crypto is here to stay but I don't have to make it easy (Team Eagle) - My sales and business people need to be appeased so I'm going to create policies that would accept crypto but I'm going to make it so onerous that people will give up and just work around it.
  
  
• Crypto is here to stay and I'm going to capitalize on it (Team Fox) - I'm going to understand what I'm dealing with and figure out how to adopt crypto without adding too much risk.

What remains to be seen is how much pressure we'll get from the business folks, and will we be prepared with a thoughtful response; be it adopt or not. I think either way it's good to be talking about what all needs to be considered if you are going to explore a path of adoption. Things like:

• How will I verify funds and fungibility?
• How will I satisfy sourcing and seasoning requirements?
• What kind of documentation will I need from the borrower?
• Have I updated my AML/BSA policies accordingly?

Full disclosure, I do not own or trade in any kind of crypto currency, I'm not even a fan. I just don't think that it's something that we can ignore in hopes that it will go away.

Best,

John"

Discussion on the original announcement
https://www.linkedin.com/feed/update/urn:li:activity:7348003031235350528 

Discussion on the bill https://www.linkedin.com/feed/update/urn:li:activity:7358547900001366016