02/13/2013 05:55:25 PM EST
CFPB Implementation Strategy for New Mortgage Rules
by Michael B. Raines
and Jeffrey E.
Although the CFPB's new mortgage rules ("Mortgage Rules")
are less than a month old and do not go into effective until January 10, 2014,
the CFPB is not wasting any time putting the mortgage industry on notice that
it expects these rules to be "implemented accurately and expeditiously." Today,
the Bureau announced that it will be implenting a plan over the course of this
year "that focuses on the mortgage industry's compliance with new consumer
protections." While the full extent of the CFPB's implementation "plan" is
unknown, today's announcement provides an insight into the CFPB's expectations
of mortgage industry.
The Bureau claims that the purpose of its plan is to
"support rule implenation and ensure industry is ready for the new borrower
protections." Director Cordray remarked that "Mortgage borrowers, who have
dealt with much heartache since the financial crisis, deserve this level of
attentiveness." To achieve its goals, the CFPB's plan includes:
Coordinating with other agencies:
The CFPB is coordinating with other federal government regulators that also
conduct examinations of mortgage companies to ensure all regulators have a
shared understanding of the CFPB's new rules. This will help promote a
consistent regulatory experience for industry.
Publishing plain-language guides:
The CFPB will publish easy-to-understand summaries of the regulations in both
written and video form. The guides, available in the spring, will be
particularly helpful to smaller businesses with limited staff for compliance.
Publishing updates to the official
interpretations: Over the next year, the CFPB plans to issue updates of the
"official interpretations," which provide guidance on how to comply with the rules.
These updates will allow the CFPB to address important questions raised by
industry, consumer groups, or other agencies. Priority for these updates will
be given to issues that are important to a large number of providers or
consumers, and that critically affect mortgage companies' implementation
decisions. The Bureau expects to issue the first one in the spring and issue
additional updates, as needed.
Publishing readiness guides: These
guides, available this summer, will help mortgage originators and servicers
prepare to comply with the new rules by giving them helpful check-lists, such
as suggesting that implementation plans include items like revising policies
and procedures and finalizing training plans for staff. More in-depth
examination procedures are expected to be published later this year by the
Federal Financial Institutions Examination Council. Industry members will be
able to use these examination procedures to conduct self-assessments and
internal reviews of their readiness and compliance.
Educating consumers: As the
January 2014 date approaches, the CFPB will give consumers information about
their new protections under these rules through a broad-reaching consumer
Of most interest are the updates to the official
interpretations and readiness guides, because they will provide the mortgage
the best insight into how the CFPB intends on enforcing the Mortgage Rules.
Stay tuned to the CFPB-Lawblog for further reporting on and analysis of the
CFPB's implementation plans as more details become available.
Read more articles about the Consumer Financial Protection
Bureau at Dykema's CFPB Blog
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