News

CUNA urges CFPB to provide small servicer exemption to servicing rules

CunaThe Credit Union National Association recently voiced concern about the CFPB’s proposed changes to mortgage servicing rules, saying that while the group supports some of the measures, the agency should provide small servicers from servicing requirements.

The CFPB recently proposed amendments to the small servicer exemption under Regulation X, the Real Estate Settlement Proecedure Act, qualified mortgage rule and Truth in Lending Act.

“The proposed change reflect concerns that CUNA has raised with the CFPB, and we support the agency’s efforts to factor credit unions’ issues into its rulemakings,” CUNA Deputy General Counsel Mary Dunn said in a comment letter to the CFPB.

Dunn pointed to the CFPB’s proposed change to Regulation Z that would allow credit unions and other small institutions to exclude mortgage loans they voluntarily service for nonaffiliated entities in determining whether the small servicer exemption applies.

Dunn also said, however, that CUNA is concerned about several measures in the proposal that would exempt credit union servicers based on the number of loans they actually service but would disqualify them from the exemption if they use a third-party subservicer to service just one of the loans, if the third party services more than 5,000 loans.

“Being able to use a subservicer facilitates a credit union’s ability to make loans,” Dunn said. “We are hopeful that the CFPB will gives this issue further consideration and allow servicers that predominantly service their own loans but that also use a subservicer for some, say up to 25 percent of their loans, to continue to be exempt from key provisions of the servicing rule.”

Comments are closed.