In July 2013 the CFPB issued the final interpretations for changes to Regulation Z precipitated by the Dodd Frank Act, which requires financial institutions to provide a monthly statement to members who have closed-end mortgages. (The specific addition can be found in Section 1026.41, excerpts from which are quoted in the body of the announcement.)
According to the regulation, financial institutions that are subject to the rule must send a monthly statement for each billing cycle after the payment due date or at the end of the courtesy pay period provided for the previous billing cycle. There is an exemption to this rule if the financial institution provides the member with coupons, but this exemption does not apply to Adjustable Rate Mortgages (ARMs).
It is important for your credit union to thoroughly understand the regulation, and some credit unions may even need to make adjustments to their mortgage servicing rules. This document is intended to explain CU*Answers’ intentions with regard to producing the required statements for members.
On August 26th CU*Answers published an announcement to all clients detailing the plan to address the new regulation as well as details revolving around the specifics of the requirements. In the body of the announcement we suggested that clients comment on the specific plan and encourage these comments be posted on the AuditLink site. To post a comment please follow the link below.
Requirements of Periodic Statements for Mortgage Loans (pdf)
The Process Type in the loan configuration is not a field that we can edit. As we have Closed End Home Equity Loans that are under Process Type “E” will this field become editable or will CUA be able to change the process type for us? We also have commercial business loans under “M” which should not require the periodic statement.
Is there any way to design it based off of loan category instead of process type?
I would like to see the Delinquency information required by § 1026.41(d)(8) be included on the first page so credit unions aren’t required to send a separate statement at 45 days of delinquency. Can fields be added for credit unions to add a blanket statement for (iv) that applies to all loans based on loan documents? And can a field be added to loan maintenance for each loan to signify first notice or filing that would translate to the statement?
Is anyone changing closed-end mortgage due dates for the statement timing requirements? (Statements must be delivered, emailed or placed in the mail within 4 days of the close of the courtesy period.)
I would like to talk with others who are changing due dates to share ideas.
Correct me if I am wrong….the periodic statements don’t go out until after the payment due date? If this is true, we are giving the members lots of notice what their next monthly payment will be correct? It would also be a nice feature to allow each credit union to code each loan separately if a monthly billing notice is required on the loan or not. I’m with Cindy Monte, we also have Member Business Loans that are under the Process Type “M”.