In October 2017, the Consumer Financial Protection Bureau (CFPB) issued several amendments to the 2016 Mortgage Servicing Rule Amendments¹. Many mortgage servicers question whether these amendments will impact mortgage servicer advertising requirements.  The short answer is no, the amendments do not impact the advertising requirements included in either Act. However, in the notice of final rule, the CFPB addressed comments from advocacy groups regarding servicing and advertising to Limited English Proficiency (LEP) consumers. The comments request the CFPB to consider rulemaking regarding LEP borrowers’ needs. The CFPB’s acknowledgement of these comments begs the question of whether the CFPB will make changes to the mortgage advertising rules with respect to LEP consumers in 2018.

In August 2016, the Consumer Financial Protection Bureau issued the 2016 Mortgage Servicing Rules which amended Regulation X and Regulation Z enacted in January 2013. Most of the 2016 amendments became effective on October 19, 2017. The most recent 2017 amendments make certain clarifications and revisions to the 2016 Amendment. While these 2017 amendments do not purport to change any mortgage advertising rules, the CFPB made several comments regarding LEP best practices in its notice of final rule.

In the notice of final rule, the CFPB:

• Reiterated the importance of communicating “clearly and in a non-discriminatory manner with all consumers, including those with limited English proficiency.”
• Made clear that, as best practice, mortgage servicers should assess their current consumer advertising and communications materials to:
  (1) See if they align with CFPB best practices.
  (2) Ensure that their advertising materials are clear and non-discriminatory for all consumers, including LEP consumers.
• Noted that even though the 2016 Mortgage Servicing Rule does not address LEP consumer advertising, mortgage servicers are still subject to state laws that may afford LEP consumers broader protections.

While no formal requirements for LEP consumer advertising were included in the 2016 Mortgage Servicing Rule, the CFPB’s insistence and reiteration that mortgage servicers provide advertisements and other communications in a clear and non-discriminatory manner indicates that the CFPB is likely to issue new rules specific to LEP consumers in 2018.

For now, mortgage servicers should take stock of current state laws to determine if applicable state laws afford consumers more protections than the 2016 Mortgage Servicing Rule, follow CFPB guidance on best practices in advertising to LEP consumers and review the Spotlight on Serving Limited English Proficient Consumers Guide, updated by the CFPB in November 2017.

Mortgage and lending servicers can view state recordkeeping rules and regulations for mortgage advertising, including social media by state using this handy map.  Or download the Mortgage Industry’s State by State Guide to Advertising Recordkeeping Requirements to share with your colleagues.

 

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¹The 2013 Mortgage Servicing Rules includes “the Real Estate Settlement Procedures Act (RESPA) of 1974, which is implemented by Regulation X, and the Truth in Lending Act (TILA), which is implemented by Regulation Z.” Consumer Financial Protection Bureau, Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) Mortgage Servicing Rules: Small Entity Compliance Guide 17 (Oct. 18, 2017).