WASHINGTON—NAFCU and CUNA have both provided lawmakers with feedback on a number of bills currently being considered by the House Financial Services Committee.
The committee is marking up nine bills this week, a number of which relate to debt collection issues.
Brad Thaler, NAFCU's vice president of legislative affairs, provided comments in a letter to Chairwoman Maxine Waters (D-CA), Ranking Member Patrick McHenry (R-NC), and committee members that included the association’s support for H.R. 2445 – the Self-Employed Mortgage Access Act. The bill would require the Consumer Financial Protection Bureau to amend its Ability-to-Repay/Qualified Mortgage (ATR/QM) standard to ensure that lenders can continue to use standards from Appendix Q for verifying monthly debt and income or substitute government program mortgage standards.
The Bureau in July issued an advance notice of proposed rulemaking to revise the general QM definition.
Additionally, Thaler noted NAFCU's support of efforts to combat abusive debt collection practices, but also encouraged the committee to ensure that efforts in debt collection reform do not hamper legitimate debt collection efforts.
Two Debt Collection Bills
He specifically commented on two debt collection reform bills:
- Small Business Fair Debt Collection Protection Act (H.R. 5013): Thaler raised concerns about the definition of covered businesses for this legislation that would extend Fair Debt Collection Practices Act coverage beyond just consumers to businesses, noting that business lending is different than consumer lending and the lack of clarity in the text that the new protections would only apply to small businesses.
- Ending Debt Collection Harassment (H.R. 5021): Thaler noted the bill's intent to treat electronic communication methods the same as other communication channels doesn't seem "unreasonable," but cautioned against a section of it that "would appear to require lenders to send multiple duplicative notices." He also recommended reviewing "how to handle situations for debt collectors when a borrower had indicated to a lender that their preferred method of communication was via electronic means."
CUNA’s Comments
CUNA commented on four bills.
CUNA said it supports the Self-Employed Mortgage Access Act (H.R. 2445) would expand homeownership opportunities for self-employed consumers by allowing financial institutions to rely on standards other than Appendix Q to verify a consumer’s income.
“Credit unions have consistently urged the Consumer Financial Protection Bureau to allow alternative methods for income verification given the practical difficulties faced by many consumers in satisfying Appendix Q’s requirements,” CUNA stated in its letter. “Accordingly, CUNA supports H.R. 2445 and the effort to provide consumers with reliable, yet more practical, options to verify self-employed income when attempting to obtain a mortgage.”
CUNA said it has concerns with The Monitoring and Curbing Abusive Debt Collection Practices Act (H.R. 4664), which includes a provision prohibiting the CFPB from finalizing a rule that permits collectors to send unlimited emails and text messages.
“This legislation is a solution in search of a problem because the CFPB has not proposed to allow unlimited text or email communications. Rather, the proposed rule provides debtors with considerable choice in terms of how they may be contacted,” the letter reads. “A consumer that does not want to receive text or email communications from a collector would have the ability under the proposed rule to opt-out. While this legislation is unnecessary, it could set a harmful precedent if such a limitation was applied to other communications between a consumer and financial service provider.”
Would ‘Disrupt’ Small Business Lending
CUNA said it also believes that the Small Business Fair Debt Collection Protection Act (H.R. 5013) could disrupt small business lending and add to the total regulatory costs of entities operating in the small business lending space. The bill would expand the FCDPA to cover “small businesses” as defined in a future rulemaking by the CFPB.
“We are concerned that this legislation would expand the scope of the FDCPA without making accommodations for the differences between small business and consumer lending and collections,” reads CUNA’s letter.
The Non-Judicial Foreclosure Debt Collection Clarification Act (H.R. 5001) raises similar concerns from CUNA, the trade association said, as it would expand the FCDPA to cover non-judicial foreclosures.
“CUNA is concerned the expansion of the FDCPA to non-judicial foreclosures could create conflict between state and federal law, expose mortgage servicers to increased FDCPA liability, and produce regulatory compliance challenges for entities enforcing security interests,” the letter reads.