Waivers Granted for Early Compliance with Servicing Rules

The Consumer Financial Protection Bureau (CFPB) says it has learned that some servicers anticipate some calendar-related problems in complying with the final rule amending mortgage servicing regulations that were issued by the Bureau last August.  Some of the changes to Regulations X and Z are schedule to go into effect on October 19, 2017 and the remainder on April 19, 2018.

Both effective dates fall on a Thursday.  This leaves servicers less than a full day in each case, from the close of business on the preceding Wednesday to the start of the day on Thursday, to update and test systems to assure compliance on the effective day of the changes.  CFPB said it understood that, if servicers do not have sufficient time to complete these tasks, their systems may be more likely to produce errors and expose the companies and their customers to risk.  Servicers have confirmed they could more effectively comply with the changes were they to have the preceding weekend to perform the necessary upgrades.

To alleviate these concerns, the Bureau, on Tuesday, issued a non-binding policy guidance under which servicers can have a three-day period of early compliance. The guidance says CFPB will not take supervisory or enforcement actions for violations of existing Regulation X or Regulation Z if servicers comply with the new Mortgage Service Rule for no more than three days in advance of the applicable effective dates. 

This means that, for the rules going into effect on October 19, servicers are allowed to be in compliance during the period from Monday, October 16 to Wednesday October 18, 2017. For the second effective date the allowable early period is Monday April 16 to Wednesday April 18, 2018.