Jan. 18, 2013 – The CFPB’s final rule on mortgage servicing includes, as urged by NAFCU, a higher servicer exemption threshold than was proposed to ensure relief for small credit unions, but whether the final threshold is high enough remains to be seen.
CFPB Director Richard Cordray, during a field hearing in Atlanta, said Thursday that the final rule includes an exemption for smaller institutions, “such as community banks and credit unions,” that service a small number of mortgages. “They are exempt from certain requirements,” Cordray said. “By all accounts, they do this work very well, with a high-touch customer service model that is deserving of strong support.”
NAFCU worked to ensure the CFPB’s final rule allows relief for small credit unions. In an October official comment letter, NAFCU told the CFPB its proposed 1,000-loan threshold was inadequate. “We strongly urge the agency to greatly increase the number and exclude [refinancings] from this number,” wrote Carrie Hunt, NAFCU’s general counsel and vice president of regulatory affairs, in an October comment letter. “The number is simply far too low to provide many small credit unions its intended relief.”
The final rule issued Thursday takes effect next Jan. 10. It exempts mortgage servicers handling 5,000 or fewer loans from a handful of the new requirements. Briefly, these “small issuers” are exempt from the following:
- requirements related to periodic statements;
- limits on when an issuer can force-place insurance coverage;
- requirements to implement general policies and procedures for compliance;
- a requirement for early intervention with delinquent borrowers; and
- a requirement on continuity of contact.
NAFCU’s regulatory affairs staff is analyzing the final rule. Meanwhile, two more final rules could be released today. One, on appraisals for higher priced mortgage loans, is an interagency rule (see related story). The other is on loan originator compensation.
NAFCU will keep its members apprised.