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CFPB Issues Final Rule Amendment regarding Transition to Modified or Unmodified Periodic Statements

Posted By USFN, Tuesday, May 1, 2018
Updated: Tuesday, May 1, 2018

May 1, 2018

by John D. Schlotter
McCalla Raymer Leibert Pierce, LLC
USFN Member (Connecticut, Florida, Georgia, Illinois)

On March 8, 2018, the Consumer Financial Protection Bureau issued a rule amending certain aspects of the 2016 Mortgage Servicing Final Rule relating to periodic statements. These amendments revise the timing requirements for servicers transitioning between modified or unmodified periodic statements and coupon books when consumers enter or exit bankruptcy.

The 2016 Mortgage Servicing Final Rule addresses the periodic statement and coupon book requirements under Regulation Z when a person is a debtor in bankruptcy. That rule included a single-billing-cycle exemption from the requirement to provide a periodic statement, or coupon book, in certain circumstances after one of several specific triggering events occurs, resulting in a servicer needing to transition to or from providing bankruptcy-specific disclosures. The single-billing-cycle exemption applied only if the payment due date for that billing cycle was no more than 14 days after the triggering event. That rule also included specific timing requirements for servicers to provide the next modified or unmodified statement, or coupon book, after the single-billing-cycle exemption has ended.

This final rule amendment replaces the single-billing-cycle exemption for periodic statements and coupon books with a single-statement exemption when servicers transition to providing modified or unmodified periodic statements and coupon books to consumers entering or exiting bankruptcy. This final rule provides a single-statement exemption for the next periodic statement or coupon book that a servicer would otherwise have to provide, regardless of when in the billing cycle the triggering event occurs.

As finalized, the rule provides that — as of the date on which one of the triggering events listed in § 1026.41(e)(5)(iv)(A) occurs — a servicer is exempt from the requirements of § 1026.41 with respect to the next periodic statement or coupon book that would otherwise be required, but thereafter must provide modified or unmodified periodic statements or coupon books that comply with the requirements of this section. Comments 41(e)(5)(iv)(B)-1 thru -3 describe how the single-statement exemption operates in specific circumstances.

Comment 41(e)(5)(iv)(B)-1 explains that the exemption applies with respect to a single periodic statement or coupon book following a triggering listed in § 1026.41(e)(5)(iv)(A) and presents examples illustrating the timing. The provided examples assume that a mortgage loan has a monthly billing cycle where each payment due date is on the first day of the month following its respective billing cycle, and each payment due date has a 15-day courtesy period.

The effective date for the rule is April 19, 2018, the same date that the other sections of the 2016 rule relating to bankruptcy-specific periodic statements and coupon books take effect.

The final rule amendment can be accessed at:
https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing_final-rule_2018-amendments.pdf.

Copyright © 2018 USFN and McCalla Raymer Leibert Pierce, LLC. All rights reserved.
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Note for consideration of the USFN Award of Excellence: This article is not a"Feature."

 

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