Articles
How the CFPB's Servicing Rules Apply to Small Servicers
BankMobile
On Jan. 17, the Consumer Financial Protection Bureau issued its final servicing rules, amending both Regulations X and Z. The final rules, which become effective Jan. 10, 2014, make significant changes to existing servicing requirements likely to result in significant operational and compliance challenges for covered servicers, while at the same time providing a number of important exemptions to small servicers, many of whom will include community banks, credit unions and similar smaller institutions.
Under the final rules, small servicers are those who (1) service 5,000 or fewer loans, for which the servicer or an affiliate is the creditor or assignee; or (2) are a housing finance agency. If the servicer or an affiliate is not the creditor or assignee of any loan within its portfolio, the servicer cannot be a small servicer under the final rules.