WASHINGTON (5/17/12)--At a briefing at the Consumer Financial Protection Bureau (CFPB) on mortgage servicing proposals, Chris McDonald, Andrews FCU president/CEO, warned regulators that proposed mortgage periodic statement requirements could create unnecessary added costs and burdens for credit unions.
McDonald, who attended the CFPB briefing at the Credit Union National Association's (CUNA) request, urged the bureau to use its statutory authority to exempt credit unions from any new mortgage servicing requirements where appropriate and permissible.
The CFPB asked CUNA to recommend representatives from credit unions with between $175 million and $1 billion in assets to attend this week's briefing and feedback session.
In addition to McDonald, Russ McAtee, Andrew's chief operating officer, and Christina Mihalik, vice president of governmental affairs for the Pennsylvania Credit Union Association, also attended at CUNA's request, as did Cosimo Manzo, vice president of mortgage finance for First Heritage Financial LLC. First Heritage is a credit union service organization that services mortgage loans for 28 credit unions. Jared Ihrig and Kristina Del Vecchio, of CUNA's regulatory affairs department, also attended.
The CFPB is working to implement provisions of the Dodd-Frank Act that mandate several protections for homeowners regarding the servicing of their mortgage loans. These include:
- New disclosures for mortgage loan periodic statements, notice prior to reset of adjustable rate mortgage terms, and force-placed insurance notices--all intended to provide consumers with comprehensive and comprehensible information so they can better manage their obligations and avoid unnecessary problems;
- New requirements for timely response from servicers when a borrower complains about possible errors, and for responses that tell the borrower how the complaint was resolved and why;
- Prompt crediting of payments, so consumers are not wrongly penalized with late fees or other fees because a servicer did not credit their payments quickly; and
- Timely response to requests for payoff information, so consumers can get their balance information when they need it.
The CFPB has indicated that it intends to issue a proposed rule to implement these new statutory requirements sometime in July, and the rules must be finalized not later than Jan. 21, 2013.
In addition to the statutory requirements, the CFPB is considering using its authority over mortgage servicers to require:
- Information management policies and procedures;
- Policies for early intervention for troubled or delinquent borrowers; and
- Policies and procedures for servicers to provide continuity of contact for borrowers needing information on their loans.