The CFPB has issued an interim final rule formally rescinding its 2021 mortgage servicing regulations tied to the COVID-19 pandemic, a move that will ease compliance obligations for credit unions and other mortgage servicers. The rescission, effective 60 days after publication in the Federal Register, eliminated temporary provisions under Regulation X that had imposed additional requirements for foreclosure and loan modification procedures.
The interim final rule is scheduled to be published in the Federal Register on Friday.
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Originally adopted during the height of the pandemic, the 2021 rule added procedural safeguards to protect borrowers facing COVID-related hardship, including mandatory live contact requirements and flexible loss mitigation standards. These measures were intended to help borrowers avoid foreclosure during an unprecedented economic disruption.
According to the CFPB, these protections are no longer needed. The agency cited the expiration of the national emergency in April 2023 and the public health emergency in May 2023, noting that the temporary provisions had already sunset under their own timelines. Furthermore, the CFPB explained that most servicers and borrowers are no longer using the COVID-specific safeguards.
The rescinded rule will affect how credit unions communicate with delinquent borrowers and manage loan modification options. While credit unions must still meet general servicing requirements under RESPA, they are no longer required to adhere to the pandemic-specific contact and procedural mandates.
The CFPB emphasized that this change is part of its broader effort to streamline Regulation X and reduce regulatory complexity without compromising consumer protections. The agency stated that rescinding the rule imposes no new costs on consumers or institutions and does not uniquely affect small credit unions or rural borrowers.
Public comments on the interim final rule are being accepted through the federal eRulemaking portal.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
