[Federal Register Volume 81, Number 80 (Tuesday, April 26, 2016)]
[Proposed Rules]
[Pages 24519-24521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09695]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / 
Proposed Rules

[[Page 24519]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026

[Docket No. CFPB-2016-0016]
RIN 3170-AA49


Amendments to the 2013 Mortgage Servicing Rules Under the Real 
Estate Settlement Procedures Act (Regulation X) and the Truth in 
Lending Act (Regulation Z)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Reopening of comment period with request for public comment.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
reopening the comment period for a specific aspect of the proposed rule 
published by the Bureau in the Federal Register on December 15, 2014 
(79 FR 74176). On December 15, 2014, the Bureau published for notice 
and comment proposed amendments to certain mortgage servicing 
provisions in Regulation X and Regulation Z. Among other things, the 
proposed rule: Addressed requiring servicers to provide modified 
periodic statements under Regulation Z to consumers who have filed for 
bankruptcy, subject to certain exceptions; included related proposed 
sample periodic statement forms; and indicated that the Bureau intended 
to conduct consumer testing of the proposed sample forms and would 
publish and seek comment on a report summarizing the methods and 
results of such testing prior to finalizing any sample forms. The 
original comment period to the proposed rule closed on March 16, 2015. 
The Bureau conducted consumer testing of sample periodic statement 
forms for consumers in bankruptcy after the close of the original 
comment period. The Bureau now reopens the comment period until May 26, 
2016 to seek comment specifically on the report summarizing consumer 
testing of sample periodic statement forms for consumers in bankruptcy.

DATES: The comment period for the proposed rule published on December 
15, 2014 (79 FR 74176) is reopened. Comments must be received on or 
before May 26, 2016.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2016-
0016 or RIN 3170-AA49, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include Docket 
No. CFPB-2016-0016 or RIN 3170-AA49 in the subject line of the email.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 
20552.
     Hand Delivery/Courier: Monica Jackson, Office of the 
Executive Secretary, Consumer Financial Protection Bureau, 1275 First 
Street NE., Washington, DC 20002. Instructions: All submissions should 
include the agency name and docket number or Regulatory Information 
Number (RIN) for this rulemaking. Because paper mail in the Washington, 
DC area and at the Bureau is subject to delay, commenters are 
encouraged to submit comments electronically. In general, all comments 
received will be posted without change to http://www.regulations.gov. 
In addition, comments will be available for public inspection and 
copying at 1275 First Street NE., Washington, DC 20002, on official 
business days between the hours of 10 a.m. and 5 p.m. Eastern Time. You 
can make an appointment to inspect the documents by telephoning (202) 
435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or Social 
Security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Dania L. Ayoubi or David H. Hixson, 
Counsels, or Laura A. Johnson, Senior Counsel; Office of Regulations, 
at 202-435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    In January 2013, the Bureau issued several final rules concerning 
mortgage markets in the United States (2013 Title XIV Final Rules), 
pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection 
Act (Dodd-Frank Act), Public Law 111-203, 124 Stat. 1376 (2010).\1\ Two 
of these rules were (1) the Mortgage Servicing Rules Under the Real 
Estate Settlement Procedures Act (Regulation X) (2013 RESPA Servicing 
Final Rule); \2\ and (2) the Mortgage Servicing Rules Under the Truth 
in Lending Act (Regulation Z) (2013 TILA Servicing Final Rule).\3\ 
These two rules are referred to collectively as the 2013 Mortgage 
Servicing Final Rules.
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    \1\ Specifically, on January 10, 2013, the Bureau issued Escrow 
Requirements Under the Truth in Lending Act (Regulation Z), 78 FR 
4725 (Jan. 22, 2013) (2013 Escrows Final Rule), High-Cost Mortgage 
and Homeownership Counseling Amendments to the Truth in Lending Act 
(Regulation Z) and Homeownership Counseling Amendments to the Real 
Estate Settlement Procedures Act (Regulation X), 78 FR 6855 (Jan. 
31, 2013) (2013 HOEPA Final Rule), and Ability to Repay and 
Qualified Mortgage Standards Under the Truth in Lending Act 
(Regulation Z), 78 FR 6407 (Jan. 30, 2013) (January 2013 ATR Final 
Rule). The Bureau concurrently issued a proposal to amend the 
January 2013 ATR Final Rule, which was finalized on May 29, 2013. 
See 78 FR 6621 (Jan. 30, 2013) (January 2013 ATR Proposal) and 78 FR 
35429 (June 12, 2013) (May 2013 ATR Final Rule). On January 17, 
2013, the Bureau issued the Real Estate Settlement Procedures Act 
(Regulation X) and Truth in Lending Act (Regulation Z) Mortgage 
Servicing Final Rules, 78 FR 10901 (Feb. 14, 2013) (Regulation Z) 
and 78 FR 10695 (Feb. 14, 2013) (Regulation X) (2013 Mortgage 
Servicing Final Rules). On January 18, 2013, the Bureau issued the 
Disclosure and Delivery Requirements for Copies of Appraisals and 
Other Written Valuations Under the Equal Credit Opportunity Act 
(Regulation B), 78 FR 7215 (Jan. 31, 2013) (2013 ECOA Valuations 
Final Rule) and, jointly with other agencies, issued Appraisals for 
Higher-Priced Mortgage Loans (Regulation Z), 78 FR 10367 (Feb. 13, 
2013) (2013 Interagency Appraisals Final Rule). On January 20, 2013, 
the Bureau issued the Loan Originator Compensation Requirements 
under the Truth in Lending Act (Regulation Z), 78 FR 11279 (Feb. 15, 
2013) (2013 Loan Originator Final Rule).
    \2\ 78 FR 10695 (Feb. 14, 2013).
    \3\ 78 FR 10901 (Feb. 14, 2013).
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    The Bureau clarified and revised those rules through notice and 
comment rulemaking during the summer and fall of 2013 in the (1) 
Amendments to the 2013 Mortgage Rules under the Real Estate Settlement 
Procedures Act (Regulation X) and the Truth in Lending Act (Regulation 
Z) (July 2013 Mortgage Final Rule) \4\ and (2) Amendments to the 2013 
Mortgage Rules under the Equal Credit Opportunity Act (Regulation B), 
Real Estate Settlement Procedures Act (Regulation X), and the Truth in 
Lending Act (Regulation Z) (September

[[Page 24520]]

2013 Mortgage Final Rule).\5\ In October 2013, the Bureau issued 
clarified compliance requirements in relation to successors in 
interest, early intervention requirements, bankruptcy law, and the Fair 
Debt Collection Practices Act (FDCPA),\6\ through an Interim Final Rule 
(IFR) \7\ and a contemporaneous compliance bulletin (October 2013 
Servicing Bulletin).\8\ Among other things, the IFR provisionally 
exempted servicers from the periodic statement requirement for a 
mortgage loan while the consumer is a debtor in bankruptcy and 
indicated that the Bureau would continue to examine the issue and might 
reinstate the requirement to provide a consumer in bankruptcy with a 
periodic statement.\9\ In October 2014, the Bureau added an alternative 
definition of small servicer in the Amendments to the 2013 Mortgage 
Rules under the Truth in Lending Act (Regulation Z).\10\ The purpose of 
each of these updates was to address important questions raised by 
industry, consumer advocacy groups, and other stakeholders. The 2013 
Mortgage Servicing Final Rules, as amended in 2013 and 2014, are 
referred to herein as the Mortgage Servicing Rules.
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    \4\ 78 FR 44685 (July 24, 2013).
    \5\ 78 FR 60381 (Oct. 1, 2013).
    \6\ 15 U.S.C. 1692 et seq.
    \7\ 78 FR 62993 (Oct. 23, 2013).
    \8\ Consumer Fin. Prot. Bureau, CFPB Bulletin 2013-12, 
Implementation Guidance for Certain Mortgage Servicing Rules (Oct. 
15, 2013), available at http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf.
    \9\ 78 FR 62993, 63000-01 (Oct. 23, 2013). The Bureau received 
comments in response to the IFR that it took into account in 
developing the proposed rule and sample forms for consumers in 
bankruptcy.
    \10\ 79 FR 65300, 65304 (Nov. 3, 2014).
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    On December 15, 2014, the Bureau published for notice and comment a 
proposed rule amending Regulation X and Regulation Z.\11\ Among other 
things, the proposed amendments to Sec.  1026.41 of Regulation Z would 
require servicers to provide modified periodic statements to consumers 
who have filed for bankruptcy, subject to certain exceptions, with 
content varying depending on whether the consumer is a debtor in a 
Chapter 7 or Chapter 11 bankruptcy case, or in a Chapter 12 or Chapter 
13 bankruptcy case, respectively.\12\ The Bureau also proposed related 
sample periodic statement forms,\13\ and indicated that it would 
conduct consumer testing of the proposed sample forms. As the Bureau 
explained in the proposed rule, ``[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.'' \14\
    The comment period for the proposed rule closed on March 16, 2015. 
In response to the proposed rule, the Bureau received over 100 comment 
letters during the comment period from numerous commenters, including 
servicers, consumer groups, trade associations, other government 
entities, and individual consumers. In particular, the Bureau received 
a number of comments addressing the merits of the proposed provisions 
on the bankruptcy period statements. After the close of the comment 
period, interested parties submitted to the Bureau additional oral ex 
parte presentations and written ex parte comments on the proposed 
rule.\15\ In addition, the Bureau has 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.\16\ After the close of the comment period, as discussed in 
more detail below, the Bureau conducted consumer testing of sample 
periodic statement forms that servicers could use for consumers in 
bankruptcy to comply with the related proposed amendments to Sec.  
1026.41.
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    \11\ 79 FR 74176 (Dec. 15, 2014).
    \12\ The discussion of the relevant portions of the proposed 
rule pertaining to the bankruptcy periodic statements are available 
at 79 FR 74176, 74256-66 (Dec. 15, 2014).
    \13\ 79 FR 74176, 74267 and 74300-02 (Dec. 15, 2014).
    \14\ 79 FR 74175, 74266 (Dec. 15, 2014).
    \15\ See Consumer Fin. Prot. Bureau, CFPB Bulletin 11-3, CFPB 
Policy on Ex Parte Presentations in Rulemaking Proceedings (Aug. 16, 
2011), available at http://files.consumerfinance.gov/f/2011/08/Bulletin_20110819_ExPartePresentationsRulemakingProceedings.pdf. 
Materials pertaining to these presentations are filed in the record 
and are publicly available at http://www.regulations.gov.
    \16\ Summaries of the Bureau's outreach are filed in the record 
and are publicly available at http://www.regulations.gov.
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II. Discussion and Request for Comment

    Following publication of the proposed rule, the Bureau engaged Fors 
Marsh Group (FMG), a research and consulting firm that specializes in 
designing disclosures and consumer testing, to conduct one-on-one 
cognitive interviews of consumers to test the Bureau's proposed sample 
periodic statement forms for consumers who have filed for bankruptcy, 
with content varying depending on whether the consumer is a debtor in a 
Chapter 7 or Chapter 11 bankruptcy case, or in a Chapter 12 or Chapter 
13 bankruptcy case, respectively. As described in detail in the report 
summarizing the testing,\17\ the Bureau and FMG worked closely to 
develop and test the Bureau's proposed sample modified periodic 
statement forms and various revisions thereto. Between May 2015 and 
August 2015, FMG conducted three rounds of one-on-one cognitive 
interviews regarding the forms with a total of 51 participants in 
Arlington, Virginia, Fort Lauderdale, Florida, and Chicago, Illinois. 
Efforts were made to recruit a significant number of participants who 
had filed for bankruptcy, who had a mortgage (preferably when they 
filed for bankruptcy), and who had trouble making mortgage payments in 
the last two years.
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    \17\ Fors Marsh Group, Testing of Bankruptcy Periodic Statement 
Forms for Mortgage Servicing (Feb. 2016), available at http://www.consumerfinance.gov/reports (report on consumer testing 
submitted to the CFPB).
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    During the interviews, participants were shown sample modified 
periodic statements. In general, participants who had filed for Chapter 
7 bankruptcy reviewed the statements tailored to borrowers who are 
debtors in a Chapter 7 or Chapter 11 bankruptcy case, while 
participants who had filed for Chapter 13 bankruptcy reviewed the 
statements tailored to borrowers who are debtors in a Chapter 12 or 
Chapter 13 bankruptcy case. Participants were asked specific questions 
to test their understanding of the information presented in the sample 
statements, how easily they could find various pieces of information 
presented in the sample statements, as well as to learn about how they 
would use the information presented in the sample statements. The 
Bureau and FMG worked closely to develop revisions to all of the forms 
between rounds to address any usability or comprehension issues that 
became apparent, as well as to respond further to public comments the 
Bureau received on the proposed rule.
    As noted above, the Bureau indicated in its proposed rule that it 
would conduct consumer testing of sample periodic statement forms for 
consumers in bankruptcy and publish a report prior to finalizing any 
such sample forms. The Bureau conducted the consumer testing after the 
close of the original comment period and is now issuing this notice to 
reopen the comment period in order to publish and seek public comment 
specifically on the report summarizing the methods and results of the 
testing. The Bureau 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. As 
noted above, the Bureau has already received a number of comments on 
the merits of the proposal, and any further such comments will be 
considered outside of the scope of this request for public comment. 
Therefore, the Bureau encourages commenters to limit their

[[Page 24521]]

submissions accordingly to the report, its findings, and conclusions.

    Dated : April 21 , 2016.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2016-09695 Filed 4-25-16; 8:45 am]
 BILLING CODE 4810-AM-P