During a Thursday hearing, Pam Davis, a witness for the Credit Union National Association, said that credit unions did not create the issues in the housing market that the CFPB’s mortgage servicing rules seek to correct.
“There is absolutely no evidence that credit unions have engaged in abusive practices regarding mortgage loan originator compensation and additional requirements will needlessly add to the regulatory burden credit unions already face,” Davis said.
The hearing was held just after the CFPB released rules on high-risk mortgage appraisals and mortgage loan origination. Last week, the CFPB released final rules for qualified mortgages and ability-to-repay requirements, as well as escrow accounts and “higher-priced mortgages.”
Davis, who was also representing the Georgia Credit Union Affiliates and serves as the vice president of real estate services at Delta Community Credit Union, said that CUNA and other institutions are “concerned about the regulatory burden imposed on lenders and will be reviewing the new rules from that perspective.”
Under the CFPB’s final mortgage servicing rule, mortgage servicers are required to simplify billing statements and provide additional notice of borrowers’ rate changes, as well as ensure that consumers are aware of all of their options to prevent foreclosure.
The rule exempts a number of credit unions and other small entities that service fewer than 5,000 loans that either they or an affiliate originated. Exempt institutions are not required to provide periodic statements, to adhere to general servicing policies and a number of other provisions, though they will not be exempt from information request and error resolution requirements.