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NAFCU Director of Regulatory Affairs Alicia Nealon urged CFPB to reconsider proposed amendments to mortgage servicing rules under the Real Estate Settlement Procedures Act and Truth in Lending Act – changes that NAFCU believes would "disproportionately impact small financial institutions."

In a detailed letter Monday, Nealon thanked CFPB for its "extensive engagement with industry stakeholders." However, she emphasized NAFCU's concerns that the bureau has not given enough consideration to how the proposal would affect small entities, which did not participate in the behavior responsible for the financial crisis.

Nealon noted that the proposed changes would affect nine different areas of Regulations X and Z's mortgage servicing requirements. Her letter addressed all the proposed changes, and most notably raised about the proposed amendments on successors in interest, requests for information from servicers, loss mitigation, and early intervention in delinquency.

NAFCU also noted its members' concerns about delinquency in the context of Reg Z's prompt payment crediting rule. "NAFCU urges the CFPB to clarify that credit unions may credit payments in accordance with their loan agreements, so long as such crediting does not result in the pyramiding of late fees or treating member payments as a partial payment."

She noted NAFCU's support for CFPB's proposed changes concerning the definition of delinquency, force-placed insurance and periodic statements.

"Regulation X's and Z's current mortgage servicing rules continue to stifle growth, innovation and diversification at credit unions, and the proposal does little to provide any meaningful relief," Nealon concluded. "NAFCU and our members, therefore, urge the Bureau to address the compliance costs and regulatory difficulties faced by credits unions raised in this letter."