Financial Services Law Developments: FYI: CFPB Reopens Comment Period on "Periodic Statements in Bankruptcy" Mortgage Servicing Amendments

Tuesday, April 26, 2016

FYI: CFPB Reopens Comment Period on "Periodic Statements in Bankruptcy" Mortgage Servicing Amendments

The Consumer Financial Protection Bureau (CFPB) recently reopened the comment period for its proposed amendments to the mortgage servicing related rules under RESPA and TILA that generally would require servicers to provide modified periodic statements to consumers who have filed for bankruptcy.

The full announcement is available at: Link to Announcement

As you may recall, in December of 2014, the CFPB published for notice and comment a proposed rule that among other things would require mortgage servicers to provide certain modified periodic statements to consumers in bankruptcy (subject to specific exceptions), with different disclosures and notices required for different types of bankruptcies. The CFPB included model forms, stating "[p]rior to finalizing any such sample forms, the Bureau will publish and seek comment on a report summarizing the methods and results of the consumer testing."

The original comment period for the proposed rule closed on March 16, 2015. The CFPB notes that it received over 100 comment letters, as well as "additional oral ex parte presentations and written ex parte comments on the proposed rule" after the close of the comment period," and "conducted ex parte outreach to servicers to gain insight into their mortgage processing systems and capabilities to implement proposed changes to the servicing of loans in bankruptcy." The CFPB also conducted consumer testing as to the model forms.

The CFPB is now reopening the comment period until May 26, 2016.

More specifically, the CFPB seeks comment "on the report summarizing consumer testing of sample periodic statement forms for consumers in bankruptcy."

The report to which the CFPB refers -- Fors Marsh Group, Testing of Bankruptcy Periodic Statement Forms for Mortgage Servicing (Feb. 2016) – is supposed to be available at:

http://www.consumerfinance.gov/reports

but at the time of this update, it was not yet available.

The CFPB states that it is "is not soliciting comment on other aspects of the proposed rule, including the merits of the proposal to require periodic statements for consumers in bankruptcy under certain circumstances."

Ralph T. Wutscher
Maurice Wutscher LLP
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The Editor's Bio

Ralph T. Wutscher
Maurice Wutscher LLP
20 N. Clark Street, 33rd Floor
Chicago, Illinois 60602
Direct: (312) 493-0874
RWutscher@MauriceWutscher.com
https://www.MauriceWutscher.com/

Ralph Wutscher's practice focuses primarily on representing depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, distressed asset buyers and sellers, loss mitigation companies, automobile and other personal property secured lenders and finance companies, credit card and other unsecured lenders, and other consumer financial services providers. He represents the consumer lending industry as a litigator, and as regulatory compliance counsel.

Ralph has substantial experience in defending private consumer finance lawsuits, including cases ranging from large interstate putative class actions to localized single-asset cases, as well as in responding to regulatory investigations and other governmental proceedings. His litigation successes include not only victories at the trial court level, but also on appeal, and in various jurisdictions. He has successfully defended numerous putative class actions asserting violations of a wide range of federal and state consumer protection statutes. He is frequently consulted to assist other law firms in developing or improving litigation strategies in cases filed around the country.

Ralph also has substantial experience in counseling clients regarding their compliance with federal laws, and with state and local laws primarily of the Midwestern United States. For example, he regularly provides assistance in connection with portfolio or program audits, consumer lending disclosure issues, the design and implementation of marketing and advertising campaigns, licensing and reporting issues, compliance with usury laws and other limitations on pricing, compliance with state and local “predatory lending” laws, drafting or obtaining opinion letters on a single- or multi-state basis, interstate branching and loan production office licensing, evaluations and modifications of new or existing products and procedures, debt collection and servicing practices, proper methods of responding to consumer inquiries and furnishing consumer information, as well as proposed or existing arrangements with settlement service providers and other vendors, and the implementation of procedural or other operational changes following developments in the law.

Ralph is a member of the Governing Committee of the Conference on Consumer Finance Law. He is also the immediate past Chair of the Preemption and Federalism Subcommittee for the ABA's Consumer Financial Services Committee. He served on the Law Committee for the former National Home Equity Mortgage Association, and completed two terms as Co-Chair of the Consumer Credit Committee of the Chicago Bar Association.

Ralph received his Juris Doctor from the University of Illinois College of Law, and his undergraduate degree from the University of California at Los Angeles (UCLA). He is a member of the national Mortgage Bankers Association, the American Bankers Association, the Conference on Consumer Finance Law, DBA International, the ACA International Members Attorney Program, as well as the American and Chicago Bar Associations.

Ralph is admitted to practice in Illinois, as well as in the United States Court of Appeals for the Seventh Circuit, the United States District Courts for the Northern and Southern Districts of Illinois, and the United States District Court for the Eastern District of Wisconsin, and has been admitted pro hac vice in various jurisdictions around the country.