The Consumer Financial Protection Bureau (CFPB) issued a supervisory statement encouraging covered entities to take advantage of existing regulatory flexibility when working with consumers affected by Hurricane Harvey.
The bureau stated that supervised entities should strive to maintain adequate staffing to address affected consumers’ needs, and to do so by, within the scope of applicable laws, taking the following actions:
- “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 bureau cited guidance in its supervisory statement for the regulatory flexibility it is offering covered entities that are working to help consumers impacted by the hurricane, offering examples specifically in regards to Regulation B (which implements the Equal Credit Opportunity Act), Regulation X (which implements the Real Estate Settlement Procedures Act) and Regulation Z (which implements the Truth in Lending Act).
To help affected consumers access credit secured by a first lien on a dwelling, as required by Regulation B, the CFPB will allow them to waive the provision stipulating that creditors must provide applicants for first-lien loans with copies of appraisals and other written valuations promptly upon completion, or three business days prior to consummation of the transaction (for closed-end credit) or account opening (for open-end credit), whichever is earlier. Instead, consumers may agree to receive any copy of such materials at or before consummation or account opening, except where otherwise prohibited by law.
Pertaining to Regulation X, the bureau will permit mortgage servicers to offer loss mitigation options to borrowers without first having to collect a complete application, acknowledging that borrowers affected by a natural disaster may have difficulty timely obtaining and submitting application documents and information.
The CFPB will also waive or modify timing requirements for Regulation Z in the interest of helping people in personal financial emergency, including the following:
- “Right to rescind. Consumers have at least three business days to rescind certain credit obligations secured by a dwelling. But consumers may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency.
- “Review periods before consummation. With certain exceptions, creditors must generally deliver or place in the mail disclosures associated with the Know Before You Owe mortgage disclosure rule a certain number of days before consummation: no later than the seventh business day before consummation for a Loan Estimate and no later than three business days before consummation for a Closing Disclosure. However, the consumer may modify or waive these waiting periods if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency.”