The Independent Community Bankers of America urged the CFPB in a letter last week to extend the compliance date for new mortgage rules scheduled to take effect in January for a period of nine to 12 months.
“The CFPB’s new mortgage regulations are not minor changes for the industry, rather they represent a complete overhaul of how mortgage loans will be underwritten, originated and serviced,” the ICBA said in the letter, which was also signed by 41 state banking organizations. “These new requirements demand significant changes to the mortgage business of community banks and the businesses of all the third-party participants in the chain, from application to servicing, including software providers upon whom community banks are reliant.”
The ICBA said the slightest regulatory change can require “many months of time” to adjust systems, policies and procedures, as well as train staff, perform quality control and revise underwriting requirements.
“We represent bankers who are increasingly concerned that compliance with the new mortgage requirements will be difficult to ensure with only a couple of months left before the mandatory deadline…” the ICBA said. “We understand the CFPB’s urgency in finalizing these mortgage requirements given the past abuses that have occurred in the mortgage market leading to the financial crisis. Nevertheless, our members have provided safe and solid mortgage loans to consumers in their communities for decades and were not responsible for the abusive mortgage practices that led to these new requirements.”