Mortgage Access Act Backed, Potential FCDPA Expansions Raises Concerns

CUNA commented on four bills set to be marked up this week by the House Financial Services Committee, including three related to the Fair Debt Collection Practices Act (FCDPA) which raise concerns.

CUNA supports the Self-Employed Mortgage Access Act (H.R. 2445) would expand homeownership opportunities for self-employed consumers by allowing financial institutions to rely on standards other than Appendix Q to verify a consumer’s income.

“Credit unions have consistently urged the Consumer Financial Protection Bureau (CFPB) to allow alternative methods for income verification given the practical difficulties faced by many consumers in satisfying Appendix Q’s requirements,” reads CUNA’s letter of support.

“Accordingly, CUNA supports H.R. 2445 and the effort to provide consumers with reliable, yet more practical, options to verify self-employed income when attempting to obtain a mortgage.”

CUNA has concerns with The Monitoring and Curbing Abusive Debt Collection Practices Act (H.R. 4664), which includes a provision prohibiting the CFPB from finalizing a rule that permits collectors to send unlimited emails and text messages.

“This legislation is a solution in search of a problem because the CFPB has not proposed to allow unlimited text or email communications. Rather, the proposed rule provides debtors with considerable choice in terms of how they may be contacted,” the letter reads. “A consumer that does not want to receive text or email communications from a collector would have the ability under the proposed rule to opt-out. While this legislation is unnecessary, it could set a harmful precedent if such a limitation was applied to other communications between a consumer and financial service provider.”

CUNA also believes that the Small Business Fair Debt Collection Protection Act (H.R. 5013) could disrupt small business lending and add to the total regulatory costs of entities operating in the small business lending space. The bill would expand the FCDPA to cover “small businesses” as defined in a future rulemaking by the CFPB.

“We are concerned that this legislation would expand the scope of the FDCPA without making accommodations for the differences between small business and consumer lending and collections,” reads CUNA’s letter.

The Non-Judicial Foreclosure Debt Collection Clarification Act (H.R. 5001) raises similar concerns from CUNA, as it would expand the FCDPA to cover non-judicial foreclosures.

“CUNA is concerned the expansion of the FDCPA to non-judicial foreclosures could create conflict between state and federal law, expose mortgage servicers to increased FDCPA liability, and produce regulatory compliance challenges for entities enforcing security interests,” the letter reads.