Many Banks Not Ready For New CFPB Mortgage Rules

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In a letter to various regulators, the American Bankers Association noted survey data which highlights practical challenges associated with fully complying with all of the CFPB’s requirements for new mortgage-related rules which will become effective January 10, 2014. According to the ABA, community banks in particular reported that one of the most burdensome aspects of compliance is the development, customization, and implementation of information technology projects, including software, programming, and interfaces. The survey noted that 60% of respondents stated that their vendor(s) had not provided information on when they will provide all completed software and programming updates necessary for compliance. Delivery of the software would be followed by an integration and testing phase. The actual amount of time for financial institutions to comply is further shortened by the information technology “freeze” that some institutions have in place to manage existing year-end tax and reporting requirements. Survey respondents indicated it may not be possible to test or revise the new mortgage compliance systems during this lock-down period.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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