CUNA Asks for CFPB Clarification on Small-Issuer Exemption
The CFPB's final mortgage servicing rule, issued Thursday, requires mortgage servicers to meet new periodic statement requirements, provide additional notice of rate changes to borrowers and help ensure that consumers know their options to prevent foreclosures.
The servicing rule contains a number of exemptions for credit unions and other financial institutions that meet the bureau's "small issuer" definition--that they service 5,000 or fewer loans that they or an affiliate own or originated. Servicers that own mortgage servicing rights for mortgage loans that are not owned by the servicer of affiliate, or for which the servicer or affiliate is not the entity to whom the obligation was initially payable, are not small servicers.
CUNA talked with the CFPB on this today and sought clarification. CUNA will update credit unions and leagues early next week on issues, such as: How is a credit union, which qualifies as a small servicer, affected it it retains a sub-servicer that does not meet the small-servicer definition?
Under the CFPB rule, "small servicers" will be exempted from the periodic statement requirements, general servicing policies, procedures and requirements, early intervention and continuity of contact provisions with delinquent borrowers and a vast majority of the loss mitigation procedures. They will not, however, be exempted from the information request and error resolution requirements.