February 09, 2018

NAFCU urges CFPB to repeal mortgage servicer rule

NAFCU, with six other trade associations, in a letter last week asked CFPB Acting Director Mick Mulvaney to repeal the bureau's 2016 amendments to its 2013 mortgage servicer rule due to the conflicts it presents with current bankruptcy law. At the very least, the trades asked that the rule be delayed beyond its April effective date.

The CFPB's final rule will require mortgage servicers to send monthly billing statements to consumers in active bankruptcy cases and certain bankruptcy cases in which the debtor's personal liability was previously discharged. The groups argue that this rule conflicts with "well-settled bankruptcy law prohibiting a creditor from collecting from consumers who are in an active bankruptcy case or who have previously been discharged from personal liability in a prior bankruptcy case."

The letter outlines reasons why the CFPB's rule runs contrary to current bankruptcy law and should be repealed. If not repealed, the trades' letter asks that various parts of the rule be reviewed, including the past-payment breakdown, servicer transfers and pre-confirmation cases, among others.

Along with NAFCU, signers of the letter included: the American Financial Servicers Association, Consumer Mortgage Coalition, CUNA, HOPE NOW Alliance, Independent Community Bankers of America and Real Estate Settlement Providers Council.