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With a new administration incoming at the Consumer Financial Protection Bureau (CFPB) and the country turning the corner in its fight against the pandemic, the CFPB has begun to flex its regulatory muscles once again. From ensuring LGBTQ- and COVID-19-related protections to rescinding or delaying the implementation of Trump Administration-era rules and policy statements, the CFPB has been very active in recent weeks reasserting itself.
Protections for Disadvantaged Populations
Since its inception, the CFPB has promoted the rights and protections of disadvantaged populations through the release of policy statements and rules, as well as its enforcement of regulations like the Equal Credit Opportunity Act and Regulation B. In the past few weeks, the Bureau has taken robust action to enhance such protections.
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On April 1, 2021, acting Director of the Consumer Financial Protection Bureau (CFPB), David Uejio, fired a shot across the bow of mortgage servicers in the form of a Compliance Bulletin and Policy Guidance (Bulletin). A copy of the Bulletin can be found
As the mortgage industry is well aware, there are millions of borrowers currently in default of their mortgage obligations. This could lead to a flood of foreclosures when forbearance periods end later this year.
In no uncertain terms, the Bulletin warns that the CFPB will be keeping an eye on how mortgage servicers respond to borrower requests for loss mitigation assistance and process loss mitigation applications. Among other things, the CFPB will consider a servicer’s overall effectiveness at reducing avoidable foreclosures (along with other relevant factors) in using its discretion to address violations of federal consumer financial law in supervisory and enforce
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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs, and webinars with more analysis in these areas. We understand that keeping on top of the rapidly evolving regulatory landscape is more important than ever for businesses seeking to offer new and ground-breaking technologies.
Regulatory Announcements
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The CFPB was busy last week, issuing a series of measures that impact the mortgage servicing industry.
On March 31
st the CFPB
rescinded seven policy statements, including statements that provided flexibility from supervisory or enforcement actions for loss mitigation and credit reporting activity in connection with the COVID-19 national emergency.
On April 1
st, the CFPB issued Compliance Bulletin 2021-02 (the “Compliance Bulletin”), warning mortgage servicers to take certain measures in anticipation of the wave of homeowners who will need assistance after the expiration of CARES Act forbearances and other similar COVID-related measures.
REGULATORY DEVELOPMENTS
CFPB Warns Mortgage Servicers to Prepare Now for Anticipated Surge of Homeowners Needing Assistance
On March 31, the CFPB issued Compliance Bulletin 2021-02, promising accountability for servicers who fail to put struggling families first and asking them to prepare now to deal with the foreseeable surge of borrowers in need of loss mitigation assistance when the pandemic-related federal emergency mortgage protections expire in June. The CFPB communicated that it will be monitoring how mortgage servicers engage with borrowers, respond to borrower requests, and process applications for loss mitigation to prevent avoidable foreclosures, expecting servicers to:
Contact borrowers in forbearance before the end of the forbearance period so they have time to apply for help;