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7 hours ago
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The Consumer Financial Protection Bureau (CFPB), under the leadership of acting director Russell Vought, is continuing to assess regulations it deems outdated or unnecessary.
To that end, the bureau published a notice in the Federal Register this week that seeks to rescind a 2021 rule which “temporarily permitted mortgage servicers to offer certain loan modifications made available to borrowers experiencing a COVID-19 related hardship.”
The rule also “finalized certain temporary amendments to Regulation X related to the COVID-19 pandemic,” referring to the implementing regulation of the Real Estate Settlement Procedures Act (RESPA).
“The rule stated that the temporary procedural safeguards do not apply if a servicer makes the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process on or after January 1, 2022,” the notice stated.
“In addition, the rule stated that the temporary COVID-19 related live contact requirements would only be required until October 1, 2022.”
In April 2023, President Joe Biden signed a joint resolution from Congress that terminated the COVID-19 national emergency. The bureau said this gives it “good cause to remove, without prior notice and comment, language relating to the COVID-19 pandemic added by the 2021 COVID RESPA Rule.”
With the national health emergency having expired two years ago, Vought said that “borrowers and servicers are no longer utilizing these safeguards.”
He also cited a July 2024 proposed rule, which would amend Regulation X and require servicers to emphasize borrower assistance and loss-mitigation options over foreclosure when a borrower struggles to make their required mortgage payments.
The entry in the Federal Register also provides additional perspective on the current approach the CFPB is taking to rule making under Vought’s leadership.
It describes the bureau’s stance to “streamline regulatory requirements to reduce burdens on the American public,” and it has determined that the end of the pandemic means that these rules “needlessly complicate Regulation X without commensurate benefits.”
The bureau is accepting public comments on the proposed rescission, which can be submitted through the proposal’s Federal Register portal through June 16.
Vought’s time as CFPB director may last longer than initially planned. President Donald Trump’s nominee to serve as full-time director, Jonathan McKernan, was recently named for a key position at the Department of the Treasury. The president subsequently pulled McKernan out of consideration as CFPB director.
It was also recently observed that the CFPB’s official accounts on social media platforms Facebook and X, formerly known as Twitter, are no longer available.
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