Executives from five credit unions commented on the Consumer Financial Protection Bureau’s proposed mortgage servicer rules during a recent meeting with the watchdog agency’s Small Business Review Panel.
The credit unions represented included the Arizona-based American Southwest Credit Union, the Nebraska-based Omaha Police FCU, the South Dakota-based Services Center FCU, the Connecticut-based First New England FCU and the Colorado-based Rocky Mountain Law Enforcement FCU, Credit Union Times reports.
Credit unions estimate that between $20,000 and $40,000 in initial costs would be required to implement one of the requirements, which would provide U.S. consumers with monthly mortgage statements detailing principal, interest and other fees.
The panel included 16 representatives from “small entities,” including credit unions and banks with less than $175 million in assets. These entities, which use third-party vendors to issue mortgage statements, maintain that they would have little control over any price increases associated with compliance costs related to the proposed requirements, though those costs could be contained if vendors were required to implement the rules for all clients.
Another requirement would force mortgage servicers to issue two written notices to borrowers before charging them for force-placed insurance. According to a report on the input issued by the CFPB, the small entity representatives maintain that their actions did not contribute to the recent housing crisis, according to Credit Union Times.
Smaller servicers utilize a “high-touch” model that involves consistent and regular customer contact and exceptional service to ensure the health of loans. The group said that the compliance burden associated with the new CFPB rules would make it more difficult for small entities to compete in the market and allow consumers choice.