The CFPB Releases Mortgage Servicing FAQs

The FAQs address bankruptcy issues of importance to credit union compliance teams.

3/27/18

Picture of Young smiling pretty bussinesswoman over team backgroundThe Consumer Financial Protection Bureau (CFPB) announced the release of FAQs on bankruptcy issues under the 2016 Mortgage Servicing Rules. The FAQs are designed to address common questions related to bankruptcy topics. The topics include:

  • Bankruptcy Periodic Statements;
  • Bankruptcy Coupon Books;
  • Bankruptcy Reaffirmation;
  • Bankruptcy Successors in Interest; and
  • Bankruptcy Provisions Effective Date.

The FAQ’s can be found online.

Question of the Week

What is a Social Security Representative Payee Account and how do I set one up?

The Social Security Administration (SSA) appoints a “representative payee” for a recipient of social security funds that is not qualified to handle the funds on their own. For example, a minor, the aged who are not mentally competent, or some institutionalized persons. More information about the rules that govern representative payees can be found on the Social Security Administration website, www.ssa.gov.

There are two different, but similar programs offered by the SSA. The first program is called the Social Security Representative Payee Program. The second program is called the Supplemental Security Income (SSI) Representative Payee Program. In either program, there are three common rules that apply when creating an account. First, the beneficiary must own the account. Second, the beneficiary cannot have access to the account. Third, the beneficiary’s TIN must be used on the account.

To set up one of these accounts, the account should be titled: “Beneficiarys Name by Payee Name, Representative Payee.” A credit union could either provide for this type of account in its account agreement or use a trust account format or agency account format. The signature card should be signed: “Payee Name, Representative Payee for Beneficiarys Name.” Since it is the beneficiary’s account, the beneficiary could qualify for membership or if the payee was qualified for membership, the payee could open the account for the beneficiary.

Related Links

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA published an Advance Notice of Proposed Rulemaking requesting comments on ways to streamline, clarify, and improve the standard FCU bylaws.

The NCUA announced that the meeting video from its February Board Meeting is now available.

The NCUA released its 2017 Annual Report.

The NCUA announced that the FFIEC has provided an update of its Examination Modernization Project. The modernization project includes leveraging technology so that some examination work can be done offsite, tailor examinations based on risk, and improve electronic file transfer systems.

Consumer Financial Protection Bureau (CFPB)

The CFPB issued a request for information on inherited regulations and new rulemaking authorities.

The CFPB announced the issuance of a report on the 2017 activities of the CFPB and FTC to combat illegal debt collection practices. The report indicates that the CFPB handled 84,500 debt collection complaints as well as uncovered numerous FDCPA violations.

The CFPB released Mortgage Servicing FAQs to address compliance with the rules that are effective on April 19, 2018 concerning statements for borrowers in bankruptcy .

Federal Reserve Board (FRB)

The FRB released the Federal Open Market Committee’s statement, economic projections, and materials from its March 20th meeting.

The FRB published the 2017 combined and annual audited financial statements for the Federal Reserve Banks.

The FRB published a final rule increasing the rate for primary credit at each Federal Reserve Bank. As a result of the primary credit rate action, the secondary credit rate also increased. The primary rate of credit is now 2.25% and the secondary credit rate is 2.75%.

The FRB published a final rule that increases the rate of interest paid on balances maintained to satisfy reserve balance requirements and the rate of interest paid on excess balances will be raised to 1.75%.

Federal Deposit Insurance Corporation (FDIC)

The FDIC released its Fourth Quarter 2017 State Profiles which provides a quarterly summary of banking and economic conditions in each state.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of March 23, 2018. The last update prior to this was March 22, 2018.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.