This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

47953 

Vol. 82, No. 198 

Monday, October 16, 2017 

1 81 FR 72160 (Oct. 19, 2016). 

2The Bureau is addressing in a separate proposed 

rule another disclosure timing provision of the 2016 

Mortgage Servicing Final Rule that would otherwise 

become effective April 19, 2018. 

3The provisions of Regulation X discussed herein 

were amended by the 2016 Mortgage Servicing 

Final Rule but are not effective until October 19, 

2017. To simplify review of this document and 

differentiate between those amendments and this 

rule, this document generally refers to the 2016 

amendments as though they already are in effect. 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1024 

[Docket No. CFPB–2017–0031] 

RIN 3170–AA77 

Mortgage Servicing Rules Under the 

Real Estate Settlement Procedures Act 

(Regulation X) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Interim final rule with request 

for public comment. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is issuing 

an interim final rule amending a 

provision of the Regulation X mortgage 

servicing rules issued in 2016 relating to 

the timing for servicers to provide 

modified written early intervention 

notices to borrowers who have invoked 

their cease communication rights under 

the Fair Debt Collection Practices Act. 

The Bureau requests public comment on 

this interim final rule. 

DATES: This interim final rule is 

effective on October 19, 2017. 

Comments must be received on or 

before November 15, 2017. 

ADDRESSES: You may submit comments, 

identified by Docket No. CFPB–2017– 

0031 or RIN 3170–AA77, by any of the 

following methods: 

• Email: FederalRegisterComments@

cfpb.gov. Include Docket No. CFPB– 

2017–0031 or RIN 3170–AA77 in the 

subject line of the email. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• 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, 1700 G Street NW., 

Washington, DC 20552. 

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 1700 G Street 

NW., Washington, DC 20552, on official 

business days between the hours of 10 

a.m. and 5:00 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: Joel 

L. Singerman, Counsel; or William R. 

Corbett or Laura A. Johnson, Senior 

Counsels, Office of Regulations, at 202– 

435–7700 or https://

reginquiries.consumerfinance.gov/. 

SUPPLEMENTARY INFORMATION: 

I. Summary of the Interim Final Rule 

On August 4, 2016, the Bureau issued 

the Amendments to the 2013 Mortgage 

Rules Under the Real Estate Settlement 

Procedures Act (Regulation X) and the 

Truth in Lending Act (Regulation Z) 

(2016 Mortgage Servicing Final Rule) 

amending certain of the Bureau’s 

mortgage servicing rules.1 The Bureau 

has learned, through its outreach in 

support of industry’s implementation of 

the 2016 Mortgage Servicing Final Rule, 

that certain technical aspects of the rule 

relating to the timing for servicers to 

provide modified written early 

intervention notices to borrowers who 

have invoked their cease 

communication rights under the Fair 

Debt Collection Practices Act (FDCPA) 

may create unintended challenges in 

implementation. To alleviate any 

unintended challenges and facilitate 

timely provision of written early 

intervention notices to these borrowers, 

the Bureau is issuing this interim final 

rule to address the provision in 

Regulation X, which would otherwise 

become effective October 19, 2017.2

Among other things, the 2016 

Mortgage Servicing Final Rule addresses 

Regulation X’s provision regarding early 

intervention requirements when a 

borrower has invoked the cease 

communication right under the 

FDCPA.3 Under that provision (and 

with certain exceptions not applicable 

here), a servicer subject to the FDCPA 

with respect to that borrower’s loan 

must provide a modified written early 

intervention notice to that borrower on 

a periodic basis but is prohibited from 

doing so more than once during any 

180-day period. 

Based on feedback received through 

its efforts to support industry 

implementation of the 2016 Mortgage 

Servicing Final Rule, the Bureau 

understands that there is concern among 

some servicers that this 180-day 

prohibition in § 1024.39(d)(3)(iii), read 

in conjunction with the early 

intervention provision’s other timing 

requirements regarding written notices, 

requires servicers to provide the notice 

exactly on the 180th day after providing 

a prior notice. The Bureau did not 

intend this result and is concerned that 

the provision imposes too narrow a 

window for compliance and may 

provide insufficient guidance as to 

when and how servicers comply with 

the timing requirements under certain 

circumstances. Thus (and as explained 

in further detail below), the Bureau is 

issuing this interim final rule to amend 

§ 1024.39(d)(3)(iii) to give servicers a 10- 

day window to provide the modified 

notice at the end of the 180-day period. 

The Bureau believes that the interim 

final rule provides clearer and more 

flexible standards than the timing 

requirements adopted in the 2016 

Mortgage Servicing Final Rule, offering 

greater certainty for implementation and 

compliance, without undermining 

important borrower protections relating 


jstallworth on DSKBBY8HB2PROD with RULES
47954 Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Rules and Regulations 

4 81 FR 72160 (Oct. 19, 2016). The amendments 

cover nine major topics and focus primarily on 

clarifying, revising, or amending provisions 

regarding force-placed insurance notices, policies 

and procedures, early intervention, and loss 

mitigation requirements under Regulation X’s 

servicing provisions; and prompt crediting and 

periodic statement requirements under Regulation 

Z’s servicing provisions. The amendments also 

address proper compliance regarding certain 

servicing requirements when a person is a potential 

or confirmed successor in interest, is a debtor in 

bankruptcy, or sends a cease communication 

request under the FDCPA. 

5Amendments to the 2013 Mortgage Rules Under 

the Real Estate Settlement Procedures Act 

(Regulation X) and the Truth in Lending Act 

(Regulation Z); Correction, 82 FR 30947 (July 5, 

2017). 

6Policy Guidance on Supervisory and 

Enforcement Priorities Regarding Early Compliance 

With the 2016 Amendments to the 2013 Mortgage 

Rules Under the Real Estate Settlement Procedures 

Act (Regulation X) and the Truth in Lending Act 

(Regulation Z), 82 FR 29713 (June 30, 2017). 7Public Law 111–203, 1245 Stat. 11376 (2010). 

to early intervention. The Bureau seeks 

public comment on this interim final 

rule. 

II. Background 

A. 2016 Mortgage Servicing Final Rule 

and Implementation Support 

In August 2016, the Bureau issued the 

2016 Mortgage Servicing Final Rule, 

which amends certain of the Bureau’s 

mortgage servicing rules in Regulations 

X and Z.4 Most of these rules become 

effective on October 19, 2017, except 

that the provisions relating to 

bankruptcy periodic statements and 

successors in interest become effective 

on April 19, 2018. The Bureau has 

worked to support implementation by 

providing an updated compliance guide, 

other implementation aids, a technical 

corrections final rule,5 policy guidance 

regarding early compliance,6 and 

informal guidance in response to 

regulatory inquiries. Information 

regarding the Bureau’s implementation 

support initiative and available 

implementation resources can be found 

on the Bureau’s regulatory 

implementation Web site at https://

www.consumerfinance.gov/policycompliance/guidance/implementationguidance/mortserv/. Based on its 

ongoing outreach, the Bureau believes 

that industry has made substantial 

implementation progress regarding the 

2016 Mortgage Servicing Final Rule. 

However, as discussed herein, the 

Bureau believes that a limited 

disclosure timing provision under 

Regulation X from the 2016 Mortgage 

Servicing Final Rule may pose 

unintended implementation challenges 

and is appropriate to address in an 

interim final rule before it goes into 

effect. 

B. Purpose and Scope of Interim Final 

Rule 

As a result of feedback and questions 

received from servicers, the Bureau has 

decided to issue an interim final rule 

amending Regulation X relating to the 

timing for servicers to provide modified 

written early intervention notices to 

borrowers who have invoked their cease 

communication rights under the 

FDCPA. The Bureau believes this 

interim final rule provides clearer and 

more flexible standards than the timing 

requirements adopted in the 2016 

Mortgage Servicing Final Rule, offering 

greater certainty for implementation and 

compliance, while also not undermining 

borrower protections. 

III. Legal Authority 

The Bureau is issuing this interim 

final rule pursuant to its authority under 

RESPA and the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(Dodd-Frank Act),7 including the 

authorities discussed below. This 

interim final rule amends a provision 

previously adopted by the Bureau in the 

2016 Mortgage Servicing Final Rule. In 

doing so, the Bureau relied on one or 

more of the authorities discussed below, 

as well as other authority. The Bureau 

is issuing this interim final rule in 

reliance on the same authority and for 

the same reasons relied on in adopting 

the relevant provisions of the 2016 

Mortgage Servicing Final Rule, as 

discussed in detail in the Legal 

Authority and Section-by-Section 

Analysis parts of the 2016 Mortgage 

Servicing Final Rule. 

A. RESPA 

Section 19(a) of RESPA, 12 U.S.C. 

2617(a), authorizes the Bureau to 

prescribe such rules and regulations, to 

make such interpretations, and to grant 

such reasonable exemptions for classes 

of transactions, as may be necessary to 

achieve the purposes of RESPA, which 

include its consumer protection 

purposes. In addition, section 6(j)(3) of 

RESPA, 12 U.S.C. 2605(j)(3), authorizes 

the Bureau to establish any 

requirements necessary to carry out 

section 6 of RESPA, and section 

6(k)(1)(E) of RESPA, 12 U.S.C. 

2605(k)(1)(E), authorizes the Bureau to 

prescribe regulations that are 

appropriate to carry out RESPA’s 

consumer protection purposes. The 

amendments or clarifications to 

Regulation X in the interim final rule 

are intended to achieve some or all 

these purposes. 

B. The Dodd-Frank Act 

Section 1022(b)(1) of the Dodd-Frank 

Act, 12 U.S.C. 5512(b)(1), authorizes the 

Bureau to prescribe rules ‘‘as may be 

necessary or appropriate to enable the 

Bureau to administer and carry out the 

purposes and objectives of the Federal 

consumer financial laws, and to prevent 

evasions thereof.’’ RESPA and title X of 

the Dodd-Frank Act are Federal 

consumer financial laws. 

Section 1032(a) of the Dodd-Frank 

Act, 12 U.S.C. 5532(a), provides that the 

Bureau ‘‘may prescribe rules to ensure 

that the features of any consumer 

financial product or service, both 

initially and over the term of the 

product or service, are fully, accurately, 

and effectively disclosed to consumers 

in a manner that permits consumers to 

understand the costs, benefits, and risks 

associated with the product or service, 

in light of the facts and circumstances.’’ 

The authority granted to the Bureau in 

section 1032(a) of the Dodd-Frank Act is 

broad and empowers the Bureau to 

prescribe rules regarding the disclosure 

of the ‘‘features’’ of consumer financial 

products and services generally. 

Accordingly, the Bureau may prescribe 

rules containing disclosure 

requirements even if other Federal 

consumer financial laws do not 

specifically require disclosure of such 

features. 

Section 1032(c) of the Dodd-Frank 

Act, 12 U.S.C. 5532(c), provides that, in 

prescribing rules pursuant to section 

1032 of the Dodd-Frank Act, the Bureau 

‘‘shall consider available evidence about 

consumer awareness, understanding of, 

and responses to disclosures or 

communications about the risks, costs, 

and benefits of consumer financial 

products or services.’’ Accordingly, in 

issuing the interim final rule to amend 

provisions authorized under section 

1032(a) of the Dodd-Frank Act, the 

Bureau has considered available studies, 

reports, and other evidence about 

consumer awareness, understanding of, 

and responses to disclosures or 

communications about the risks, costs, 

and benefits of consumer financial 

products or services. 

IV. Administrative Procedure Act 

To the extent that notice and 

comment would otherwise be required, 

the Bureau finds that there is good cause 

to publish this interim final rule 

without notice and comment and for the 

rule to be effective less than 30 days 

after publication. See 5 U.S.C. 

553(b)(3)(B), (d)(3). As explained 

elsewhere in this rule, the Bureau has 

heard concerns from servicers that the 

180-day prohibition in current 


jstallworth on DSKBBY8HB2PROD with RULES
Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Rules and Regulations 47955 

8This section-by-section analysis discusses 

§ 1024.39(d) generally in terms of a borrower’s cease 

communication notification and its effect on a 

servicer’s obligations under the early intervention 

requirements, but the provision applies equally to 

a borrower’s notice to the servicer that the borrower 

refuses to pay a debt. See FDCPA section 805(c) (‘‘If 

a consumer notifies a debt collector in writing that 

the consumer refuses to pay a debt or that the 

consumer wishes the debt collector to cease further 

communication with the consumer, the debt 

collector shall not communicate further with the 

consumer with respect to such debt . . . .’’). 

9Section 1024.39(d)(3)(i) requires that the notice 

include a statement that the servicer may or intends 

to invoke its specified remedy of foreclosure and 

states that Model clause MS–4(D) in appendix MS– 

4 to Regulation X may be used to comply with this 

requirement. Section 1024.39(d)(3)(ii) provides that 

the notice may not contain a request for payment. 

10See Bureau of Consumer Fin. Prot., Official 

Bureau Interpretations: Safe Harbors from Liability 

under the Fair Debt Collection Practices Act for 

Certain Actions Taken in Compliance with 

Mortgage Servicing Rules under the Real Estate 

Settlement Procedures Act (Regulation X) and the 

Truth in Lending Act (Regulation Z), 81 FR 71977 

(Oct. 19, 2016). 

§ 1024.39(d)(3)(iii) requires them to 

provide the modified early intervention 

notice to delinquent borrowers who 

have invoked their right to cease 

communication under the FDCPA 

exactly on the 180th day after providing 

a prior notice. The Bureau did not 

intend this result and is concerned that 

current § 1024.39(d)(3)(iii) imposes too 

narrow a window for compliance and 

could cause legal risk for servicers, 

particularly when the 180th day falls on 

a Saturday, Sunday, or public holiday. 

This interim final rule amends 

§ 1024.39(d)(3)(iii) to give servicers a 10- 

day window to provide the modified 

notice at the end of the 180-day period. 

The Bureau believes that this 

amendment will offer greater certainty 

for implementation and compliance, 

while also not undermining borrower 

protections. The Bureau finds that it 

would be impracticable to provide 

notice and comment before finalizing 

this rule because § 1024.39(d)(3)(iii) 

would otherwise become effective on 

October 19, 2017, and could cause 

unintended challenges in the 

implementation of the notice 

requirement. For similar reasons, the 

Bureau finds that it is impracticable to 

provide a 30-day period between 

publication of this rule and its effective 

date. The Bureau is requesting comment 

on this rule. Based on any comments 

received (and mindful of the need to 

avoid market disruption), the Bureau 

will consider whether to revisit this 

rule. 

V. Section-by-Section Analysis 

A. Regulation X 

Section 1024.39 Early Intervention 

Requirements for Certain Borrowers 

39(d) Fair Debt Collection Practices 

Act—Partial Exemption 

39(d)(3). 

In this interim final rule, the Bureau 

is amending § 1024.39(d)(3)(iii) to 

specify in more detail when a servicer 

must provide the modified written early 

intervention notice, as required by 

§ 1024.39(b) and (d), at the end of the 

180-day period after the servicer 

provided a prior written notice. In 

general, § 1024.39(d) provides a partial 

exemption from the early intervention 

requirements for servicers that are 

subject to the FDCPA with respect to 

borrowers who have invoked their cease 

communication rights pursuant to 

section 805(c) of the FDCPA.8 Section 

1024.39(d)(3) requires servicers to 

provide a modified written early 

intervention notice to those borrowers 

under certain circumstances, but 

§ 1024.39(d)(3)(iii) prohibits a servicer 

from providing the modified notice 

more than once during any 180-day 

period. As revised under this interim 

final rule, § 1024.39(d)(3)(iii) gives 

servicers a 10-day window to provide 

the required notices at the end of the 

180-day period. In particular, revised 

§ 1024.39(d)(3)(iii) retains the 180-day 

prohibition and also specifies: (1) If a 

borrower is 45 days or more delinquent 

at the end of any 180-day period after 

the servicer has provided the written 

notice, a servicer must provide the 

written notice again no later than 190 

days after the provision of the prior 

written notice, and (2) if a borrower is 

less than 45 days delinquent at the end 

of any 180-day period after the servicer 

has provided the written notice, a 

servicer must provide the written notice 

again no later than 45 days after the 

payment due date for which the 

borrower remains delinquent or 190 

days after the provision of the prior 

written notice, whichever is later. 

Section 1024.39(b) generally requires 

that a servicer provide a written early 

intervention notice prior to the 45th day 

of delinquency, and again no later than 

45 days after each payment due date so 

long as the borrower remains 

delinquent. Section 1024.39(b) further 

provides that a servicer is not required 

to provide a notice more than once in 

any 180-day period, but also that a 

servicer must provide the written notice 

no more than 180 days after the servicer 

has previously provided the notice if the 

borrower remains delinquent and is 45 

days or more delinquent at the end of 

the 180-day period. 

Among other things, § 1024.39(d) 

modifies the timing requirements for 

providing the written notice required by 

§ 1024.39(b) when a borrower has 

invoked the cease communication right 

under the FDCPA. Under 

§ 1024.39(d)(2), a servicer subject to the 

FDCPA with respect to that borrower’s 

loan is exempt from the written notice 

requirements of § 1024.39(b), but only if 

no loss mitigation option is available, or 

while any borrower on that mortgage 

loan is a debtor in bankruptcy. If neither 

of those conditions is met, 

§ 1024.39(d)(3) provides that the 

servicer must comply with the written 

notice requirements of § 1024.39(b), as 

modified by § 1024.39(d)(3)(i) through 

(iii).9 The relevant provision for 

purposes of this interim final rule is 

§ 1024.39(d)(3)(iii), which prohibits a 

servicer from providing the written 

notice more than once during any 180- 

day period. In the preamble to the 2016 

Mortgage Servicing Final Rule, the 

Bureau noted that this 180-day 

prohibition reduces the risk that the 

modified written early intervention 

notice will be used to undermine a 

borrower’s cease communication right 

under FDCPA section 805(c). 

Concurrently with the 2016 Mortgage 

Servicing Final Rule, the Bureau issued 

an interpretive rule constituting an 

advisory opinion under FDCPA section 

813(e), 15 U.S.C. 1692k(e), that, in part, 

interprets the FDCPA cease 

communication provisions in relation to 

the written early intervention 

requirements in Regulation X.10

Specifically, the interpretive rule 

provides a safe harbor from liability 

under FDCPA section 805(c) where a 

servicer that is a debt collector with 

respect to a mortgage loan is required by 

§ 1024.39(d)(3) to provide a modified 

written early intervention notice to a 

borrower who has invoked the cease 

communication right. 

After issuing the 2016 Mortgage 

Servicing Final Rule and the 

interpretive rule, the Bureau received 

several inquiries about how 

§ 1024.39(d)(3)(iii) modifies 

§ 1024.39(b)’s timing requirements. 

Section 1024.39(b) does not require a 

notice more than once in a 180-day 

period but, except as otherwise 

provided in § 1024.39(d)(3)(iii), permits 

more frequent provision of the written 

notices. It also provides that, if a 

borrower is 45 days or more delinquent 

at the end of any 180-day period after 

the servicer has provided the written 

notice, a servicer must provide the 

written notice again no later than 180 

days after the provision of the prior 

written notice. However, with regard to 

a loan for which a borrower has invoked 

the cease communication right as 


jstallworth on DSKBBY8HB2PROD with RULES
47956 Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Rules and Regulations 

11The Bureau also understands that some 

stakeholders instead may be interpreting 

§ 1024.39(b) and (d)(3)(iii) together as permitting a 

servicer to provide the subsequent written notice 

required by § 1024.39(b) sometime after the 180th 

day but before the end of the next 180-day period 

(e.g., by the 360th day). The Bureau does not 

believe such a reading of § 1024.39(b) and (d)(3)(iii) 

together is tenable and is concerned that, if 

servicers act in accordance, borrowers would be 

deprived of timely receiving important loss 

mitigation information. 

12 81 FR 72160, 72351 (Oct. 19, 2016). 

13The Bureau has discretion in any rulemaking 

to choose an appropriate scope of analysis with 

respect to potential benefits, costs, and impacts and 

an appropriate baseline. 

described above, § 1024.39(d)(3)(iii) 

prohibits a servicer from providing the 

notice more than once in any 180-day 

period. 

The Bureau is concerned that, as 

adopted by the 2016 Mortgage Servicing 

Final Rule, § 1024.39(d)(3)(iii) imposes 

too narrow a window for compliance 

and could provide insufficient guidance 

as to when and how servicers comply 

with the timing requirements under 

certain circumstances. The 180-day 

prohibition in § 1024.39(d)(3)(iii), read 

in conjunction with § 1024.39(b), 

provides only one day for a servicer to 

provide a subsequent written notice.11

Therefore, where a borrower that has 

invoked the cease communication right 

is 45 days or more delinquent at the end 

of the 180-day period after the servicer 

provided a prior written notice, a 

servicer would have to provide the next 

notice on the 180th calendar day after 

the prior notice, whether or not this day 

falls on a Saturday, Sunday, or public 

holiday. The Bureau narrowly tailored 

the timing requirements in § 1024.39(d) 

to prevent a servicer subject to the 

FDCPA from sending frequent, repeated 

notices that may undermine a 

borrower’s cease communication right 

under section 805(c) of the FDCPA. The 

Bureau did not, however, intend for 

servicers subject to § 1024.39(d)(3) to 

have a one-day window to provide a 

subsequent written early intervention 

notice to borrowers who have invoked 

their cease communication rights. Thus, 

the Bureau is amending 

§ 1024.39(d)(3)(iii). 

As amended § 1024.39(d)(3)(iii) 

retains the general 180-day prohibition 

but also specifies that, if a borrower is 

45 days or more delinquent at the end 

of any 180-day period after the servicer 

has provided the written notice, a 

servicer must provide the written notice 

again no later than 190 days after the 

provision of the prior written notice. If 

a borrower is less than 45 days 

delinquent at the end of any 180-day 

period after the servicer has provided 

the written notice, a servicer must 

provide the written notice again no later 

than 45 days after the payment due date 

for which the borrower remains 

delinquent or 190 days after the 

provision of the prior written notice, 

whichever is later. In effect, the interim 

final rule provides servicers a 10-day 

window to provide any required notices 

at the end of the 180-day period. The 

Bureau believes that a 10-day window at 

the end of the 180-day period affords 

servicers sufficient time to provide the 

notice while also ensuring that servicers 

provide the subsequent notice in a 

timely way, maximizing a borrower’s 

opportunities to pursue loss mitigation 

and avoid further delinquency. 

The Bureau seeks comment on 

whether the interim final rule permits 

servicers to timely provide the notice at 

the end of the 180-day period. The 

Bureau also seeks comment on whether 

the interim final rule adequately 

protects consumers who have invoked 

their cease communication rights while 

affording them timely access to 

information about loss mitigation. 

VI. Effective Date 

Section 1024.39(d), as amended by 

the 2016 Mortgage Servicing Final Rule, 

becomes effective October 19, 2017. 

Thus, this interim final rule, which 

further amends § 1024.39(d)(3)(iii), also 

becomes effective October 19, 2017. 

VII. Dodd-Frank Act Section 1022(b) 

Analysis 

In developing this interim final rule, 

the Bureau has considered the potential 

benefits, costs, and impacts as required 

by section 1022(b)(2) of the Dodd-Frank 

Act. Specifically, section 1022(b)(2) 

calls for the Bureau to consider the 

potential benefits and costs of a 

regulation to consumers and covered 

persons, including the potential 

reduction of consumer access to 

consumer financial products or services, 

the impact on depository institutions 

and credit unions with $10 billion or 

less in total assets as described in 

section 1026 of the Dodd-Frank Act, and 

the impact on consumers in rural areas. 

In addition, 12 U.S.C. 5512(b)(2)(B) 

directs the Bureau to consult, before and 

during the rulemaking, with appropriate 

prudential regulators or other Federal 

agencies, regarding consistency with the 

objectives those agencies administer. 

The Bureau consulted, or offered to 

consult with, the prudential regulators, 

the Securities and Exchange 

Commission, the Department of Housing 

and Urban Development (HUD), the 

HUD Office of Inspector General, the 

Federal Housing Finance Agency, the 

Federal Trade Commission, the 

Department of the Treasury, the 

Department of Agriculture, and the 

Department of Veterans Affairs, 

including regarding consistency with 

any prudential, market, or systemic 

objectives administered by these 

agencies. 

The Bureau previously considered the 

benefits, costs, and impacts of the 2016 

Mortgage Servicing Final Rule’s major 

provisions.12 The baseline 13 for this 

discussion is the mortgage servicing 

market as it would exist ‘‘but for’’ this 

interim final rule; that is, the Bureau 

considers the benefits, costs, and 

impacts of this interim final rule on 

consumers and covered persons relative 

to the baseline established by the 2016 

Mortgage Servicing Final Rule. 

In considering the relevant potential 

benefits, costs, and impacts of this 

interim final rule, the Bureau has used 

feedback received to date and has 

applied its knowledge and expertise 

concerning consumer financial markets. 

The discussion below of these potential 

costs, benefits, and impacts is 

qualitative, reflecting both the 

specialized nature of the amendments 

and the fact that the 2016 Mortgage 

Servicing Final Rule, which establishes 

the baseline for the Bureau’s analysis, is 

not yet in effect. The Bureau requests 

comment on this discussion generally as 

well as the submission of data or other 

information that could inform the 

Bureau’s consideration of the potential 

benefits, costs, and impacts of the 

interim final rule. 

The interim final rule’s provisions 

generally would decrease burden 

incurred by industry participants by 

modifying the timing requirements for 

certain disclosures required under the 

2016 Mortgage Servicing Final Rule. As 

is described in more detail below, the 

Bureau does not believe that these 

changes would have a significant 

enough impact on consumers or covered 

persons to affect consumer access to 

consumer financial products and 

services. 

Timing of written early intervention 

notice for borrowers who have invoked 

their cease communication rights under 

the FDCPA. The interim final rule 

revises § 1024.39(d)(3)(iii) to specify 

when a servicer must provide the 

modified written early intervention 

notice, as required by § 1024.39(b) and 

(d), at the end of the 180-day period 

after the servicer provided a prior 

written notice. Section 1024.39(b) 

requires that a servicer must provide a 

written early intervention notice to 

certain borrowers no more than 180 

days after the servicer previously 

provided the notice. Section 1024.39(d) 


jstallworth on DSKBBY8HB2PROD with RULES
Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Rules and Regulations 47957 

14 In particular, revised § 1024.39(d)(3)(iii) would 

retain the 180-day prohibition but would also 

specify: (1) If a borrower is 45 days or more 

delinquent at the end of any 180-day period after 

the servicer has provided the written notice, a 

servicer must provide the written notice again no 

later than 190 days after the provision of the prior 

written notice, and (2) if a borrower is less than 45 

days delinquent at the end of any 180-day period 

after the servicer has provided the written notice, 

a servicer must provide the written notice again no 

later than 45 days after the payment due date for 

which the borrower remains delinquent or 190 days 

after the provision of the prior written notice, 

whichever is later. 

15Borrowers generally have FDCPA protections 

only with respect to debt collectors. A servicer is 

not considered a debt collector for purposes of the 

FDCPA based on acquiring servicing rights to a 

mortgage loan before the mortgage loan is in 

default. Therefore, if a servicer obtains servicing 

rights to a mortgage loan and the borrower 

subsequently goes into default on that mortgage 

loan, the servicer generally is not covered by the 

FDCPA with respect to that mortgage loan based on 

its servicing of that loan. 

16 5 U.S.C. 603(a), 604(a). 

17 44 U.S.C. 3501 et seq. 

generally provides that servicers that are 

subject to the FDCPA with respect to 

borrowers who have invoked their cease 

communication rights pursuant to 

section 805(c) of the FDCPA must 

provide a modified written early 

intervention notice to those borrowers 

under certain circumstances. As 

originally adopted § 1024.39(d)(3)(iii) 

would have provided that a servicer 

may not provide the modified notice 

more than once during any 180-day 

period. Currently, the 180-day 

prohibition in § 1024.39(d)(3)(iii), read 

in conjunction with § 1024.39(b), 

provides only one day for a servicer to 

provide a subsequent written notice. 

Under the interim final rule, revised 

§ 1024.39(d)(3)(iii) gives servicers a 10- 

day window to provide the required 

notices at the end of the 180-day 

period.14 This provision will benefit 

covered persons by modifying the 

timing requirements for the early 

intervention notice and providing more 

than a one-day window. This will 

benefit servicers by providing additional 

flexibility in the timing for providing 

these notices. 

The interim final rule may have the 

effect of delaying the date on which 

some borrowers receive written early 

intervention information about loss 

mitigation options. However, this delay 

in no case exceeds 10 days, and will 

affect only a limited subset of 

delinquent borrowers: Those who have 

invoked their FDCPA cease 

communication rights and are 45 days 

or more delinquent at the end of the 

180-day period following provision of a 

prior written early intervention notice. 

Given that servicers may not be subject 

to the FDCPA with respect to many of 

the loans they service and that many 

borrowers will not choose to invoke the 

FDCPA’s cease communication rights, 

the Bureau expects that the number of 

affected borrowers is small.15 Given that 

the delay under the interim final rule is 

limited and would likely apply to only 

a small subset of borrowers, the Bureau 

does not anticipate that the overall 

effect on consumers will be significant. 

Potential specific impacts of the 

interim final rule. The Bureau believes 

that a large fraction of depository 

institutions and credit unions with $10 

billion or less in total assets that are 

engaged in servicing mortgage loans 

qualify as ‘‘small servicers’’ for purposes 

of the mortgage servicing rules because 

they service 5,000 or fewer loans, all of 

which they or an affiliate own or 

originated. Small servicers are not 

subject to Regulation X § 1024.39, and 

so are not affected by the amendments 

in this interim final rule. 

With respect to servicers that are not 

small servicers as defined in 

§ 1026.41(e)(4), the Bureau believes that 

the consideration of benefits and costs 

of covered persons presented above 

provides a largely accurate analysis of 

the impacts of the final rule on 

depository institutions and credit 

unions with $10 billion or less in total 

assets that are engaged in servicing 

mortgage loans. 

The Bureau has no reason to believe 

that the additional timing flexibility 

offered to covered persons by this 

interim final rule would differentially 

impact consumers in rural areas. The 

Bureau requests comment regarding the 

impact of the amended provisions on 

consumers in rural areas and how those 

impacts may differ from those 

experienced by consumers generally. 

VIII. Regulatory Flexibility Act 

Analysis 

Because no notice of proposed 

rulemaking is required, the Regulatory 

Flexibility Act does not require an 

initial or final regulatory flexibility 

analysis.16

IX. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (PRA),17 Federal agencies are 

generally required to seek Office of 

Management and Budget (OMB) 

approval for information collection 

requirements prior to implementation. 

The collections of information related to 

the 2016 Mortgage Servicing Final Rule 

have been reviewed and approved by 

OMB previously in accordance with the 

PRA and assigned OMB Control 

Numbers 3170–0016 (Regulation X) and 

3170–0015 (Regulation Z). Under the 

PRA, the Bureau may not conduct or 

sponsor and, notwithstanding any other 

provision of law, a person is not 

required to respond to an information 

collection unless the information 

collection displays a valid control 

number assigned by OMB. 

The Bureau has determined that the 

interim final rule will provide firms 

with additional flexibility and clarity 

with respect to what must be disclosed 

under the 2016 Mortgage Servicing 

Final Rule; therefore, it will have only 

minimal impact on the industry-wide 

aggregate PRA burden relative to the 

baseline. The Bureau welcomes 

comments on this determination or any 

other aspects of this interim final rule 

for purposes of the PRA. Comments 

should be submitted to the Bureau as 

instructed in the ADDRESSES part of this 

document and to the attention of the 

Paperwork Reduction Act Officer. All 

comments will become a matter of 

public record. 

List of Subjects in 12 CFR Part 1024 

Condominiums, Consumer protection, 

Housing, Insurance, Mortgages, 

Mortgagees, Mortgage servicing, 

Reporting and recordkeeping 

requirements. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Consumer Financial 

Protection Bureau amends 12 CFR part 

1024 as follows: 

PART 1024—REAL ESTATE 

SETTLEMENT PROCEDURES ACT 

(REGULATION X) 

■ 1. The authority citation for part 1024 

continues to read as follows: 

Authority: 12 U.S.C. 2603–2605, 2607, 

2609, 2617, 5512, 5532, 5581. 

Subpart C—Mortgage Servicing 

■ 2. Amend § 1024.39 by revising 

paragraph (d)(3)(iii) to read as follows: 

§ 1024.39 Early intervention requirements 

for certain borrowers. 

* * * * * 

(d) * * * 

(3) * * * 

(iii) A servicer is prohibited from 

providing the written notice more than 

once during any 180-day period. If a 

borrower is 45 days or more delinquent 

at the end of any 180-day period after 

the servicer has provided the written 

notice, a servicer must provide the 

written notice again no later than 190 

days after the provision of the prior 

written notice. If a borrower is less than 

45 days delinquent at the end of any 

180-day period after the servicer has 

provided the written notice, a servicer 


jstallworth on DSKBBY8HB2PROD with RULES
47958 Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Rules and Regulations 

must provide the written notice again 

no later than 45 days after the payment 

due date for which the borrower 

remains delinquent or 190 days after the 

provision of the prior written notice, 

whichever is later. 

Dated: October 2, 2017. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2017–21912 Filed 10–13–17; 8:45 am] 

BILLING CODE 4810–AM–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 120 

Express Bridge Loan Pilot Program; 

Modification of Lending Criteria 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notification of Express Bridge 

Loan Pilot Program and impact on 

regulatory provision. 

SUMMARY: The U.S. Small Business 

Administration (SBA) announces SBA’s 

Express Bridge Loan Pilot Program 

(Express Bridge Pilot), as described in 

this document, and its impact on an 

Agency regulation relating to loan 

underwriting for loans made under the 

Express Bridge Pilot. This pilot will 

provide expedited guaranteed bridge 

loan financing for disaster-related 

purposes to small businesses located in 

communities impacted by a 

Presidentially-declared disaster, while 

those small businesses apply for and 

await long-term financing (including 

through SBA’s direct disaster loan 

program, if eligible). The modification 

of the lending criteria will minimize the 

burden on businesses applying for loans 

through the Express Bridge Pilot and 

provide an incentive for SBA Express 

lenders to participate in the pilot. 

DATES: The Express Bridge Pilot, 

including the modification of lending 

criteria under 13 CFR 120.150, will be 

available from October 16, 2017, 

through September 30, 2020. 

FOR FURTHER INFORMATION CONTACT: 

Dianna Seaborn, Director, Office of 

Financial Assistance, U.S. Small 

Business Administration, 409 Third 

Street SW., Washington, DC 20416; 

Telephone (202) 205–3645; email 

address: dianna.seaborn@sba.gov. 

SUPPLEMENTARY INFORMATION: Pursuant 

to its authority under the Small 

Business Act, SBA provides assistance 

to small businesses located in the 

communities affected by Presidentiallydeclared disasters. The Agency has 

announced an initiative called the 

Express Bridge Pilot, which is designed 

to supplement the Agency’s disaster 

response capabilities. The Express 

Bridge Pilot will authorize the Agency’s 

7(a) Lenders with SBA Express lending 

authority to deliver expedited SBAguaranteed financing on an emergency 

basis for disaster-related purposes to 

small businesses located in these 

communities while the businesses apply 

for and await long-term financing 

(including through SBA’s direct disaster 

loan program, if eligible). 

The Express Bridge Pilot will apply 

the policies and procedures in place for 

the Agency’s SBA Express program, 

except as outlined in this document, 

and include the following: 

(1) The maximum loan amount under 

the pilot is $25,000 and the loans will 

carry a 50 percent guaranty from the 

Agency. 

(2) Express Bridge Pilot loans in a 

particular disaster area can only be 

made by SBA Express lenders that were 

participants in the SBA Express 

program as of the date of the applicable 

disaster. 

(3) Eligible small businesses are those 

that were located, as of the date of the 

applicable disaster, in the counties that 

have been Presidentially-declared as 

disaster areas, plus any contiguous 

counties. 

(4) SBA Express lenders may make 

loans under the Express Bridge Pilot 

only to eligible small businesses that 

had an existing banking relationship 

with the SBA Express lender as of the 

date of the applicable disaster. A 

relationship with any of the SBA 

Express lender’s affiliates will not 

satisfy this requirement. 

(5) SBA Express lenders must certify 

to SBA, for each Express Bridge Pilot 

loan, that the loan funds will be used to 

support the survival and/or reopening of 

the small business within the affected 

counties. 

(6) The maximum maturity for an 

Express Bridge Pilot loan is seven years. 

The SBA Express lender may require a 

borrower to pay down or pay off the 

Express Bridge Pilot loan if the borrower 

is approved for long-term disaster 

financing (including an SBA direct 

disaster loan) that allows proceeds to be 

used for Express Bridge Pilot loan 

reimbursement. 

(7) Express Bridge Pilot loans cannot 

be sold in SBA’s secondary market. 

Express Bridge Pilot loans are intended 

to be interim loans, thus SBA has 

determined pursuant to 13 CFR 

120.612(a)(3) that the sale of such loans 

in SBA’s secondary market would not 

be conducive to the successful operation 

of the secondary market program. 

(8) Loans under the Express Bridge 

Pilot in a particular disaster area can 

only be made up to six months after the 

date of the applicable Presidential 

disaster declaration. 

(9) The Express Bridge Pilot will be 

available for use starting October 16, 

2017, and will expire on September 30, 

2020. Express Bridge Pilot loans must be 

approved on or before such date, as 

evidenced by the issuance of an SBA 

loan number. 

To maximize the effectiveness of the 

Express Bridge Pilot, SBA is modifying 

an Agency regulation (13 CFR 120.150) 

that applies to loans made in the 7(a) 

Business Loan Program. (SBA uses the 

term ‘‘modify’’ as contemplated under 

13 CFR 120.3.) This modification will 

also minimize the burdens on the 

businesses applying for loans through 

the Express Bridge Pilot and expand the 

opportunities for SBA Express lenders 

to participate in the pilot. 

Under § 120.150 of SBA’s regulations, 

a small business applicant must be 

creditworthy and loans must be so 

sound as to reasonably assure 

repayment. In making this 

determination, character, reputation, 

credit history of the applicant and 

guarantors, past earnings, projected cash 

flow, and future prospects, among other 

things, must be considered. Currently, 

SBA Express lenders are authorized to 

make the credit decision using credit 

analysis processes and procedures 

(which may include credit scoring) that 

are consistent with those used for their 

similarly-sized non-SBA guaranteed 

commercial loans. 

In order to streamline the loan 

underwriting process for the Express 

Bridge Pilot, SBA is modifying the 

requirements of 13 CFR 120.150 to 

allow SBA Express lenders to 

underwrite Express Bridge Pilot loans 

by considering only the following: 

(1) A minimum acceptable credit 

score of 130 for the applicant issued by 

E-Tran upon submission of the loan 

application for screening; 

(2) a personal credit score for each 

guarantor; and 

(3) Lender must obtain a signed IRS 

Form 4506–T and an IRS tax transcript. 

For businesses in operation prior to the 

disaster but not long enough to have 

been required to file a tax return, Lender 

must provide an alternative to verify 

existence of the business. 

The screening credit score is a FICO®

Small Business Scoring ServiceSM

Score. SBA may adjust the minimum 

acceptable credit score up or down from 

time to time during the pilot, and will 

post any such adjusted score on its Web 

site at www.sba.gov/for-lenders. 


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