CFPB Corrects, Clarifies Final Rule Amendments

The Consumer Financial Protection Bureau has taken two big steps in clarifying its amendments to the 2013 mortgage servicing rules, which were issued in August 2016. On Tuesday, the Bureau released direct-to-final technical corrections to the amendments, as well as policy guidance on the three-day early compliance period spelled out in the 2016 final rule.

Regarding the corrections, the Bureau called them “non-substantive” and will publish the final rule with the Federal Register.

“The corrections address two typographical errors, the authority citation for Regulation Z, and several amendatory instructions relating to certain official commentary to apply the correct effective date," the CFPB reported.

The issued final rule, with completed corrections, can be found at ConsumerFinance.gov.

The second release today was what the CFPB dubbed “Policy Guidance on Supervisory and Enforcement Priorities Regarding Early Compliance with the 2016 Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z).” The issue is non-binding and relates to a three-day period of early compliance on the final 2016 rule.

“Some provisions in the 2016 final rule will take effect on Oct. 19, 2017; the remainder will take effect on April 19, 2018,” the CFPB reported. “This non-binding policy guidance addresses early compliance for up to three days preceding each effective date.”

The guidance stems from what the CFPB calls “concerns” about the effective dates—which fall in the middle of the work week—of each provision.

“The Bureau has heard concerns that these midweek effective dates for the 2016 Mortgage Servicing Final Rule could create operational challenges for servicers,” the guidance reads. “The Bureau understands that, for many servicers, the Thursday effective dates could afford less than a full day—from the close of business overnight on each of the preceding Wednesdays—to update and test systems in order to be compliant with the 2016 amendments. If servicers do not have sufficient time to complete these tasks, their systems may be more likely to produce errors, which could expose servicers and consumers to risk. Industry participants have notified the Bureau that implementing the 2016 Mortgage Servicing Final Rule during the weekend, with early compliance beginning on the Monday before each of the respective Thursday effective dates, would address these concerns.”

The guidance will also be published with the Federal Register, according to the CFPB. Read the full guidance here.