NCUA Confirms Nearly All Credit Unions Qualify for CFPB’s Servicing Exemption
According to the NCUA’s Office of Examination and Insurance, the Consumer Financial Protection Agency’s new final mortgage servicing rules will only affect slightly more than 200 credit unions.
Public Affairs Specialist John Fairbanks said another 40 are expected to exceed the CFPB’s 5,000-loan exemption threshold by January 2014, based on the average number of real estate loans originated each year.
That means of the approximately 6,900 federally insured credit unions, 6,700 qualify for the exemption as of Sept. 30, 2012, Fairbanks said.
Those numbers match CUNA’s estimate that 97.4% of credit unions would fall under the CFPB’s exemption. CUNA spokesman Pat Keefe shared his organization’s numbers with Credit Union Times late Thursday.
The CFPB’s final mortgage servicing rules released Thursday add strong new protections for homeowners struggling to avoid default, forcing servicers to provide borrowers with information regarding options available to avoid foreclosure and restricting the practice of ”dual tracking”, in which a servicer proceeds with foreclosure while simultaneously working with the borrower to avoid it.
The rule also mandates new disclosure and statement information and higher service standards. The final rules are available on the CFPB’s website.
CFPB Director Richard Cordray said during a mortgage servicing event in Atlanta that in the second half of 2012, the bureau’s Office of Consumer Response received more than 47,000 mortgage complaints; more than half were issues relating to loan modifications, collections, or foreclosure.
NAFCU reported that representatives from two of its member credit unions attended the Atlanta event: Victor Williams, vice president of mortgage lending at the $5.2 billion Randolph-Brooks FCU of Live Oak, Texas, and Emily James, CEO of the $41 million Georgia Power FCU of Atlanta.
Williams told the CFPB during an audience participation session that the bureau may want to consider raising the 5,000-loan exemption threshold. According to the credit union’s September 2012 5300 call report, it has 14,177 mortgages on its books worth $1.4 billion.
James told NAFCU “I think we have seen efforts made to provide exemptions in the final rules that would indicate that the bureau is actually listening to what the industry is saying.”