The American Bankers Association on Friday reiterated several key recommendations it first outlined in 2024 in response to CFPB’s proposed revisions to Regulation X’s mortgage servicing rules.
In a new letter, ABA urged the CFPB make limited updates to the rule’s structure and avoid sweeping, overly broad mandates as it moves to finalize amendments in light of the March 13 executive order on expanding access to mortgage credit. Among other things, the executive order directs regulators to consider changes to the mortgage servicing regulations and supervision to increase bank participation, competition and consumer choice.
In 2024, the CFPB issued a proposed rule to update and modernize Regulation X’s mortgage servicing provisions, but it was never finalized. In prior comments, ABA identified several problems with the proposal, noting that many of the proposed revisions were overly expansive and ambiguous, raising statutory concerns and creating significant compliance and operational challenges for servicers that would ultimately disrupt the loss mitigation process and harm borrowers by delaying resolution and limiting available options.
In the letter, ABA urged the CFPB to adopt a more targeted and balanced approach—combining clear guardrails with sufficient flexibility to respond to borrowers needs—consistent with the executive order’s directives. The association recommended:
- Removal of the anti-evasion provision
- Requiring an affirmative borrower request to trigger foreclosure protections
- Establishing clear, finite endpoints to foreclosure protections and retaining one review per delinquency
- Simplifying and streamlining borrower notices
- Providing relief for small servicers by increasing the exemption threshold
The letter also reiterated ABA’s continued opposition to several aspects of the 2024 proposal, including fee prohibitions and language access requirements.