Steady Stream of Mortgage Servicing Rules Continues from CFPB

As expected, the Consumer Financial Protection Bureau (CFPB) released another final mortgage servicing rule today, following the three related rules issued last week by the CFPB, as well as this week’s multi-agency rule on appraisals for higher-priced mortgages.

The latest final rule requires mortgage servicers to simplify billing statements, provide additional notice of rate changes to borrowers and help ensure that consumers know all of their options to prevent foreclosures. The rule also raises a key exemption threshold on monthly mortgage statements for credit unions and other small financial institutions that service 5,000 or fewer loans, originated internally or by an affiliate, up from a proposed 1,000-loan threshold.

The new rule will take effect on Jan. 10, 2014.

Two more rules—one related to mortgage appraisal and the other to mortgage loan originators—are expected prior to Jan. 21 as well.

“Combined,” said Northwest Credit Union Association Director of Regulatory Advocacy John Trull, “these rules will reshape the mortgage lending industry.”

David Curtis, the NWCUA’s director of compliance services, acknowledged that “the rules are far from perfect,” but said he has been “impressed with the CFPB’s willingness to partner with us and listen to our concerns.”

Examples include providing a safe harbor that shields mortgages written to qualified mortgage standards from lawsuits, eliminating the confusion around high-priced and high-risk mortgages by combining the definition into a single high-priced definition, making the anti-flip provision more palatable than originally proposed, and exempting more small mortgage servicers than originally proposed.

The Association has also arranged for an hour-long question-and-answer meeting with Edwin Chow, regional director of the CFPB, to be held on Feb. 4 near the Portland Airport.

“The rules issued by the CFPB over the past couple of weeks are long and complex, and it will take some time to fully understand and estimate the impacts,” Trull said. “It is important that our members realize that their advocacy efforts are paying off with the final rules being better than expected, but we still need to advocate for changes to the parts of these rule that could cause harm to consumers and our industry.”

In addition to the mortgage servicing rules released by the CFPB, the National Credit Union Administration (NCUA) released a final rule last week that changes the definition of a small credit union from one having no more than $10 million in assets to no more than $50 million in assets. Trull said that another positive rule for credit unions, one that will make the rural charter designation more attractive, may be finalized at the NCUA’s February board meeting.

“This is shaping up to be another year highlighted by numerous regulatory changes,” Trull said.

Regulatory Panel Discussion Set for Jan. 24

As the flood of regulatory changes continues, the NWCUA Washington Governmental Affairs Committee will host a regulatory panel discussion on the morning of Jan. 24 to bring the state’s credit union leaders together with regulators and examiners for a frank conversation about the current state and the future of the regulatory environment.

Scott Jarvis, director of Washington’s Department of Financial Institutions (DFI); Linda Jekel, credit union director for the state of Washington; and Mike Dyer, NCUA Region V Supervisory Examiner, will provide an overview of the state of financial institutions in Washington and of what to expect from the NCUA and DFI during the upcoming year. Specific points of emphasis are expected to include an update on NCUA exam consistency, DFI’s legislative support for NWCUA initiatives, new NCUA rules and regulations, and what to expect from regulators during examinations on the CFPB’s new mortgage lending directives.

After the overview, the three panelists will be joined by NCUA State Supervisory Examiners Leslie Thompson and Jason Winship and Washington Credit Union Program Manager Doug Lacey Roberts, and the group will field questions.

All credit union employees interested in the rapidly changing regulatory environment are encouraged to attend the free event, which will be held from 10-11 a.m. at the NWCUA Training Center in Federal Way, Wash. Please RSVP to NWCUA Governmental Affairs and Administrative Coordinator Christine Duncan at 206.340.4813.


The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions on these or any regulatory issues, please contact Director of Regulatory Advocacy John Trull at, or at 503.350.2209.

Posted in Compliance News, Compliance News, NCUA, NWCUA.