WASHINGTON (2/13/13)--The Consumer Financial Protection Bureau's exemption for "small" mortgage servicers will not apply to a third party subservicer if a credit union contracts with a third-party that services more than 5,000 mortgages, the agency has clarified.
Credit unions recently asked the Credit Union National Association to clarify how the CFPB's "small servicer" exemptions would impact their work with mortgage subservicers.
Under a final mortgage servicing rule released last month, mortgage servicers will need to meet new periodic statement requirements, provide additional notices of rate changes on adjustable-rate mortgage loans to borrowers and help ensure that consumers know their options to prevent foreclosures. The regulations are set to come into effect in Jan. 2014. The servicing rule contains a number of exemptions for credit unions and other financial institutions that meet the bureau's "small servicer" definition.
Subservicers that service more than 5,000 mortgages will need to comply with all of the regulation's requirements, CUNA Federal Compliance Counsel Colleen Kelly said. "Of course, a credit union needs to make sure that its contract with the subservicer assures compliance," she added.
CUNA Associate General Counsel Jared Ihrig said more questions may arise as credit unions implement the new CFPB regulations. "CUNA will maintain an open dialogue with the CFPB on this and other regulatory issues," he added.