(April 9, 2021) Every time CFPB issues a new proposal, rule, clarification, report to Congress, report on consumer attitudes and actions – and more – NASCUS makes note of it and posts it on NASCUS.org, typically the same day the bureau issues something. In addition, for all proposed and final rules, among things, NASCUS prepares summaries (available to members only) outlining the action, noting important dates, including for compliance and when the rules become effective. Keep up to date with NASCUS on all of the latest from CFPB by clicking on the link below.
LINK:
NASCUS CFPB pages (updates, rules and summaries, resources and bulletins)
(April 9, 2021) Approximately $1.5 million in awards to support digital services and cybersecurity, mentoring of small minority depository institution (MDI) credit unions, and service to underserved communities will be available to low-income-designated credit unions during 2021, NCUA said this week. The awards are made available through the Community Development Revolving Loan Fund (CDRLF); applications are accepted from federally insured credit unions that have the agency’s “low-income” designation. Non-federally insured, state-chartered credit unions may also apply; these institutions will have to complete additional application forms and agree to be examined by the NCUA to receive the funds, the agency said … New York has adopted a law creating clarity for the issue of legacy LIBOR-based contractsthat mature after mid-2023 and do not have effective fallbacks. Most LIBOR-based contracts expire before June 2023 (and the use of the reference rate is generally prohibited after the end of this year). However, there are some legacy contracts that are set to continue past the mid-year 2023 deadline – and nearly all of those, according to the Federal Reserve Bank of New York’s Alterative Reference Rate Committee (ARRC) are written under by New York law. The new measure requires the legacy contracts to adopt an alternative rate (such as the ARRC’s Secured Overnight Financing Rate (SOFR)) – or face the contracts being declared void.
LINKS:
Community Development Revolving Loan Fund Access for Credit Unions (Federal Register)
ARRC Endorses Decision to Sign New York State LIBOR Legislation into Law
(April 9, 2021) Widely depicted as a freeze on foreclosures until after Dec. 31, the CFPB this week unveiled a set of new rules it said were aimed at preventing “avoidable foreclosures” as the emergency federal foreclosure protections expire.
In a release, the bureau asserted that 3 million homeowners are behind on their mortgages due to the financial impact of the coronavirus crisis (with an estimated 2.1 million mortgages in forbearance and at least 90 days delinquent). The agency said the delinquent mortgage total has doubled since the beginning of the pandemic and that, as of December 2020, 6% of mortgages nationwide were delinquent.
Further, the bureau stated, industry data suggest that nearly 1.7 million borrowers will exit forbearance programs in September and the following months, “with many of them a year or more behind on their mortgage payments.”
CFPB said its proposal “seeks to ensure that both servicers and borrowers have the tools and time they need to work together to prevent avoidable foreclosures, recognizing that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain.”
Specifics of the proposal include:
- A special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after Dec. 31, 2021. The bureau said it is seeking comment on that date, as well as whether there are more limited ways to achieve the same purpose. “For example, the CFPB is considering whether to permit earlier foreclosures if the servicer has taken certain steps to evaluate the borrower for loss mitigation or made efforts to contact an unresponsive borrower.” The provision would only apply to loans secured by a borrower’s principal residence.
- A provision permitting servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application. “Normally, with certain exceptions, Regulation X requires servicers to review a borrower for all available options at once, which can mean borrowers have to submit more documents before a servicer can make a decision,” CFPB said. The agency said the provision would allow servicers to get borrowers into an affordable mortgage payment faster, with less paperwork for both the servicer and the borrower. It would only be available for modifications that do not increase a borrower’s monthly payment and that extend the loan’s term by no more than 40 years from the modification’s effective date.
- Temporary changes to certain required servicer communications to ensure that borrowers receive key information about their options at the appropriate time during the pandemic.
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(April 9, 2021) Two debt collection rules – which had been slated to take effect Nov. 30 – will now have a delayed compliance deadline of Jan. 29, 2022, under yet another proposal issued this week by the bureau, with the intent of giving those affected more implementation time amid the ongoing challenges of the COVID-19 pandemic.
CFPB issued the final rules late last year (in October and December) under the Fair Debt Collection Practices Act (FDCPA). The October final rule focuses on the use of communications related to debt collection and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
The December rule clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. It also prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt; and requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.
“Since the Debt Collection Final Rules were published, the global COVID-19 pandemic has continued to cause widespread societal disruption, with effects extending into 2021,” the bureau said in a notice scheduled for publication in the Federal Register. “In light of that disruption, the Bureau believes that providing additional time for stakeholders to review and, if applicable, to implement the final rules may be warranted.”
The rules adopted last year permit debt collectors to choose to comply with the rules’ requirements and prohibitions ahead of their effective date. However, the CFPB notes that the FDCPA and other applicable law would continue to govern debt collectors’ conduct, with safe harbors and presumptions implemented only as of the rules’ effective date. Comments are sought on this aspect of Wednesday’s proposed delay.
“The Bureau requests comment on, for example, the costs and benefits of permitting debt collectors to obtain a safe harbor for using the Bureau’s model validation notice as of November 30, 2021, even if the Debt Collection Final Rules do not otherwise take effect until January 29, 2022,” it said.
Comments on the proposed delay will be due 30 days after their publication in the Register.
LINK:
CFPB Proposes Delay of Effective Date for Recent Debt Collection Rules
(April 9, 2021) Feedback on implementation of new laws requiring certain business entities to submit their beneficial ownership information directly to the federal financial crimes enforcement agency is being sought by Treasury’s Financial Crimes Enforcement Network (FinCEN), the agency said this week.
In an advanced notice of proposed rulemaking (ANPR), the FinCEN said it is looking at several ways in which the submission, and use, of the information would work. Under the Corporate Transparency Act (CTA), enacted as part of last year’s National Defense Authorization Act (NDAA), the beneficial ownership information submitted to FinCEN may be disclosed to financial institutions (including credit unions) in their compliance with BSA/AML customer due diligence (CDD) requirements. “Beneficial owners” are those individual natural persons who ultimately own or control the reporting companies.
The ANPR points out that the disclosures are subject to appropriate protocols to protect confidentiality. However, it seeks comment on what information should be collected and how financial institutions can access the data. For example, it asks what information should be required from a reporting company about the company’s corporate affiliates, parents, and subsidiaries, particularly given that in some cases multiple companies can be layered on top of one another in complex ownership structures? As for financial institutions, it asks how can FinCEN make beneficial ownership information available to financial institutions with CDD obligations so as to make that information most useful to those financial institutions?
Comments are due by May 5.
ANPR: Beneficial Ownership Information Reporting Requirements
(April 9, 2021) Leadership at FinCEN changes Sunday as a new acting director takes office, following the effective date today of the resignation of the most recent director.
The Treasury Department said this week that Michael Mosier, current counselor to the deputy secretary of the Treasury and a former FinCEN deputy director, will return to the agency as acting director, effective Sunday (April 11). He will be taking over for Kenneth A. Blanco, current FinCEN director, who announced late last week that he is stepping down today.
Before joining Treasury last month as the deputy secretary’s counselor, Mosier served as FinCEN’s deputy director and first digital innovation officer, the agency said in a release. Other federal law enforcement positions include associate director at Treasury’s Office of Foreign Assets Control (OFAC), deputy chief in the Department of Justice’s (DOJ) money laundering and asset recovery section. He also served in the White House National Security Council as director for transnational organized crime.
Treasury also said that AnnaLou Tirol, former associate director of FinCEN’s Strategic Operations Division, is now serving as FinCEN deputy director. Tirol joined FinCEN in 2019 as associate director of the strategic operations division, which promotes FinCEN’s strategic partnerships with government and private industry stakeholders, both domestically and internationally.
LINK:
FinCEN Announces Acting Director and New Deputy Director
(April 9, 2021) Following its proposed rules to prevent “avoidable foreclosures,” the bureau later in the week released a new bulletin detailing its expectations for mortgage servicers’ engagement with borrowers in the closing months of forbearance programs created in the wake of the financial impact of the coronavirus crisis.
Bulletin 2021-02, “Supervision and Enforcement Priorities Regarding Housing Insecurity,” explains the CFPB’s intention to monitor servicers’ engagement with borrowers “at all stages in the process” in coming months and to prioritize mortgage servicing oversight work in carrying out its enforcement and supervision in the coming year.
The bulletin states that, in its oversight work, the CFPB plans to pay particular attention as to whether servicers are:
- Providing clear and readily understandable information to borrowers about their options for payment assistance;
- Complying with the outreach requirements in Regulation X (Real Estate Settlement Procedures Act, or RESPA) to ensure that borrowers are getting needed information about loss mitigation options;
- Complying with the Equal Credit Opportunity Act’s (ECOA’s) prohibition against discriminating against any applicant, with respect to any aspect of a credit transaction, including in their work with limited English proficiency borrowers and those having a range of income types;
- Promptly handle loss mitigation inquiries and avoid unreasonably long hold times on phone lines (for example, the CFPB plans to scrutinize servicer conduct where hold times are significantly longer than industry averages);
- Maintaining policies and procedures that are reasonably designed to achieve the continuity of contact objectives to ensure that delinquent borrowers receive accurate information about their loss mitigation options;
- Evaluating the applications consistent with the Regulation X requirements to promote timely and consistent evaluations (for borrowers who submit complete loss mitigation applications);
- Complying with foreclosure restrictions in Regulation X and other federal or state foreclosure restrictions; and
- Whether servicers are complying with the Fair Credit Reporting Act’s (FCRA) requirements to report the credit obligation or account appropriately.
LINK:
Bulletin 2021-02: Supervision and Enforcement Priorities Regarding Housing Insecurity
(April 9, 2021) It’s now just about two weeks until the 2021 Pierre Jay Awards will be presented to three members of the state credit union system being honored for their contributions – and you still have time to sign up to participate.
The virtual presentation ceremony gets underway at 2 p.m. ET; there is no charge for attending the event, although registration is required.
Three leaders of the state system — Patty Idol, Kim Santos and Sarah Vega — are being recognized for the 2021 awards, which are the highest honors bestowed by NASCUS for persons or entities demonstrating service, commitment and leadership to the state system.
Idol is the former president and CEO of Mountain Credit Union in Waynesville, N.C. Santos is director of the Office of Credit Unions (OCU) at the Wisconsin Department of Financial Institutions in Madison, Wis. Vega is the former chief of staff to former NCUA Board Chairman Mark McWatters, where she also served as a senior policy advisor. She also previously served as chief of staff to former NCUA Board Chairman Michael Fryzel.
For more information, including registration for the April 22 event, see the link below.
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Registration: Pierre Jay Awards April 22 presentations, registration