WASHINGTON–CUNA and NAFCU have joined with five other financial services trade groups in a letter to the CFPB over its 2013 RESPA Servicing Rule.
In the letter to Acting CFPB Director Mick Mulvaney, the group said the rule, which is scheduled to go into effect April 2018 and requires mortgage servicers to send monthly billing statements to consumers in active bankruptcy cases and certain bankruptcy cases in which the debtor’s personal liability was previously discharged, conflicts with well-settled bankruptcy law that prohibit a creditor from collecting information from consumers who are in active bankruptcy case.
“The CFPB's final rule is contrary to this strong public policy of protecting bankruptcy debtors, will cause conflict within the administration of the bankruptcy case, and will unnecessarily subject servicers to serious liability under the Bankruptcy Code,” the letter states. “The CFPB’s final rule attempts to address a mistakenly perceived notion that the Bankruptcy Code and Federal Rules of Bankruptcy Procedure fail to provide the consumer with an appropriate level of transparency into the status of a consumer’s mortgage loan. Indeed, this issue was already comprehensively addressed by the Federal Bankruptcy Rules Committee, which promulgated certain rules in December of 2011. Those rules, which remain in effect today and are heavily enforced by the Executive Office of the United States Trustee, require servicers to notify Chapter 13 debtors, the debtor's attorney and the Trustee of any change in the consumer's monthly payment and any fee that has posted to the consumer account. These notices are then subject to objections by the debtor, the Trustee, and/or any other party in interest.”
The letter addresses numerous other issues, as well.
Joining CUNA and NAFCU in signing the letter were the American Financial Servicers Association, Consumer Mortgage Coalition, HOPE NOW Alliance, Independent Community Bankers of America, and the Real Estate Settlement Providers Council.