February 15, 2013

Cordray details mortgage rule implementation

The CFPB says it will be coordinating with other agencies, producing plain-language guides, updating its official interpretations, preparing readiness guides and educating consumers in coming months to ensure smooth implementation of the bureau's ability-to-repay and mortgage servicing rules.

"Our plan is to work with the mortgage industry to ensure that the CFPB's new rules are implemented accurately and expeditiously," CFPB Director Richard Cordray said in an announcement. "Both consumers and industry will win when the new rules are understood, applied, and carried out evenly and effectively. Mortgage borrowers, who have dealt with much heartache since the financial crisis, deserve this level of attentiveness."

CFPB's implementation team has reached out to NAFCU for input, said NAFCU General Counsel and Vice President of Regulatory Affairs Carrie Hunt. "We have been encouraging the bureau to create a channel for credit unions to receive specific guidance on implementation issues," she said.

The ability-to-repay and mortgage servicing rules take effect next Jan. 10. To support rule implementation and ensure industry readiness for the new rules, the CFPB said it will:

  • Coordinate with other agencies: The CFPB is coordinating with other federal government regulators that also conduct examinations of mortgage companies to ensure all regulators have a shared understanding of the CFPB's new rules and promote consistency.
  • Publish plain-language guides: The CFPB will publish easy-to-understand summaries of the regulations in both written and video form. It says the guides, available in the spring, will be particularly helpful to smaller businesses with limited staff for compliance.
  • Publish updates to the official interpretations: Over the next year, the CFPB plans to issue updates of the "official interpretations," which provide guidance on how to comply with the rules. Priority will be given to issues that are important to a large number of providers or consumers and that critically affect mortgage companies' implementation decisions. The bureau expects to issue the first one in the spring and issue additional updates as needed.
  • Publish readiness guides: Available this summer, these guides will help mortgage originators and servicers prepare to comply with the new rules by giving them helpful checklists. More in-depth examination procedures are expected to be published later this year by the Federal Financial Institutions Examination Council.
  • Educate consumers: As the January 2014 date approaches, the CFPB will give consumers information about their new protections under these rules through a broad-reaching consumer education campaign.

In the meantime, NAFCU memberscan get resources, including scope and applicability charts, on all the CFPB mortgage rules via this website; go to NAFCU's mortgage rules compliance page.