11 Sep Federal Regulatory Update
The Consumer Financial Protection Bureau (the “CFPB”) issued a supervisory statement on September 6, 2017, to help supervised entities work with consumers who may be at financial risk due to the major disaster caused by Hurricane Harvey.
CFPB Supervisory Statement
Supervised entities should, to the extent possible, maintain adequate staffing to address consumers’ needs following this major disaster. Additionally, to the extent consistent with applicable law, the CFPB encourages supervised entities to address consumers’ needs by taking the following actions in the aftermath of Hurricane Harvey:
- Offering penalty-free forbearance or repayment periods with clearly disclosed terms;
- Limiting or waiving fees and charges, including overdraft fees, ATM fees, or late fees;
- Restructuring existing debt by, for example, extending repayment terms with clearly disclosed terms;
- Refinancing existing debt or extending new credit with terms favorable to the consumer. Terms could, for example, reduce costs, limit payment amounts, or offer consumers other flexibility;
- Easing documentation or credit-extension requirements;
- Increasing capacity for customer service hotlines, particularly those that serve consumers in languages other than English; and/or
- Increasing ATM daily cash withdrawal limits.
The CFPB encourages supervised entities to make use of existing regulatory flexibility where doing so would benefit consumers affected by a major disaster or emergency. The bulletin outlined some examples such as:
- Regulation X generally requires servicers to obtain a complete loss mitigation application before evaluating a borrower for a loss mitigation option but generally may not offer a loss mitigation option without a complete application. However, Regulation X permits servicers to offer certain short-term options based upon an evaluation of an incomplete application and even to offer loss mitigation options to a borrower who has not submitted an application. This regulatory flexibility permits servicers to offer relief to borrowers affected by a major disaster who may have difficulty timely obtaining and submitting application documents.
- Regulation Z provides that consumers may waive or modify certain timing requirements, such as the three-day rescission period and the review periods before consummation required in conjunction with the TRID disclosures, when necessary to meet a bona fide personal financial emergency. These may be waived if necessary to meet a bona fide personal financial emergency.
The bulletin goes on to say that the CFPB recognizes that supervised entities may themselves experience difficulties due to a major disaster or emergency and that when conducting examinations and other supervisory activities, they will consider the circumstances that supervised entities may face following a major disaster and will be sensitive to good faith efforts to assist consumers.