Oct. 10, 2012 – NAFCU wrote the Consumer Financial Protection Bureau Tuesday to recommend the agency withdraw a mortgage servicing proposal that would create “near-unprecedented levels of compliance costs” and make credit union mortgage servicing much more difficult.
The CFPB’s proposal would amend the Truth in Lending Act and Real Estate Settlement Procedures Act to revise mortgage servicer requirements in at least nine specific areas. In an Oct. 9 comment letter to the CFPB, NAFCU General Counsel and Vice President of Regulatory Affairs Carrie Hunt said the aim of the proposal is to clamp down on the type of dubious mortgage servicing practices that credit unions have not engaged in, which only makes extending many of the proposed rule’s provisions to credit unions “unconscionable.”
Rather than take a “one-size-fits-all approach” as outlined in the proposal, the CFPB should withdraw the proposal to “provide credit unions with the flexibility necessary to continue to meet their members’ needs,” Hunt wrote.
Should the CFPB proceed with implementing its proposal anyway, NAFCU is urging the bureau to limit the provisions to only those required by the Dodd-Frank Act. More specifically, Hunt recommended that the CFPB:
- implement more exemptions for small entities as required by Dodd-Frank;
- consider expanding the exemption from the periodic statement requirement to include mortgages serviced by federally-insured depository institutions that have bi-weekly billing cycles –– Hunt noted that the proposal to exempt servicers that issue 1000 or fewer mortgages is far too low; and
- scale back the proposed rule to amend Regulation X to only include regulations required by the Dodd-Frank Act –– on this point, Hunt noted that the proposed requirements gleaned from the Attorneys General Settlement with large servicers should not apply to credit unions.
NAFCU’s comment letter, as well as a Regulatory Alert on the proposal, are available online.