CFPB PROPOSES CHANGES TO REGULATIONS B, X, AND Z

On June 24, 2013 the Consumer Financial Protection Bureau published proposed changes to several final rules originally published in January 2013. The proposal would:

  • Provide procedures for obtaining follow-up information on loss-mitigation applications;
  • Make it easier for servicers to offer short-term forbearance plans;
  • Revise the definitions of “rural” and “underserved” and provide interim rules until the revised definitions are complete;
  • Provide clarification about financing credit insurance;
  • Clarify the definition of “loan originator;”
  • Clarify the definition of “points and fees;”
  • Accelerate the effective date for portions of the compensation rules from January 10, 2014 to January 1, 2014; and
  • Make other technical changes to the regulations.

The comment period ends on July 23, 2013. Final rules will follow sometime prior to January 2014.

The CFPB is making it impossible for financial institutions to implement the final rules in an orderly fashion. The continued changes and clarifications are forcing financial institutions to wait until the last moment then slam everything into place without adequate time to assure proper systems and training are in place.

The CFPB’s original plan provided for a one-year implementation period. With the volume of changes that time period was marginally adequate. It will be at least August, or later, before the latest round of changes are complete. That reduces the implementation period to less than five months for some provisions. That’s insane.

A copy of the proposal is available here.

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