WASHINGTON–The CFPB’s report on consumer testing of periodic statements for borrowers who have filed a bankruptcy petition is based on a sample that is too small, while its meaning is frequently confusing, according to a joint comment letter from CUNA and NAFCU.
The letter, which was joined by the Mortgage Servicers Working Group, said the CFPB’s efforts to learn about current practices capabilities of statement production systems is an opportunity to learn how operationally feasible certain regulatory changes would be and why. However, the group said that the CFPB’s statements have only limited meaning without their accompanying regulation.
“In several areas, we are unable to understand what the statements reflect because we do not have an accompanying regulation that would implement the statements,” the comment letter states. “The only way to obtain robust comment is to publish both the statements and their regulation for comment together. If there are multiple statements under consideration, there may need to be multiple versions of some aspects of the regulation as well.”
NAFCU, CUNA and the MSWG said they were also disappointed with the sample sizes used in the testing, which they called too small to be yield reliable results.
In addition, the comment letter states:
- The testing did not take into consideration trustee communication with consumers. “Trustee communication varies, with some trustees sending specific letters or communications describing payment requirements and next steps, while others send less information. Regardless of the variation, trustee information can support or detract from consumer understanding of their bankruptcy cases. The testing did not consider statements for loans on which the consumer sends post-petition maintenance payments to the trustee.”
- The testing should have included bankruptcy judges, bankruptcy attorneys, and mortgage servicers, as well.
- There was no control group of statements, and each successive round of testing introduced multiple changes. “The results from the three testing rounds differed, but without a control, we cannot know what caused the differing results.”
- The testers selected 42 of 51 participants who had reported “trouble making mortgage payments within the last two years. The ‘trouble’ standard appears quite subjective,” the comment letter states. “This criterion does not mean that the participants had trouble making payments during an active bankruptcy case or on a loan that had been discharged.
- Some participants had no bankruptcy experience.
- The testing appears to lead to a conclusion that whatever testing shows is popular
The full copy of the comment letter can be found in The gov on CUToday.info here.