CFPB Implementation Strategy for New Mortgage Rules

by Michael B. Raines and Jeffrey E. Jamison

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 education campaign.

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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