The National Association of Federally Insured Credit Unions (NAFCU), along with six other financial industry trade associations, recently urged the Consumer Financial Protection Bureau (CFPB) to repeal a rule for mortgage services that they say runs afoul of bankruptcy law.
The rule in question will require mortgage servicers to send monthly billing statements to consumers in active bankruptcy cases. It will also require them to send statements in certain bankruptcy cases in which the debtor’s personal liability was previously discharged.
The group, in a letter to CFPB acting director Mick Mulvaney, said the rule conflicts with “well-settled bankruptcy law prohibiting a creditor from collecting from consumers who are in an active bankruptcy case or who have previously been discharged from personal liability in a prior bankruptcy case.”
They asked Mulvaney to repeal the rule, saying it runs contrary to current bankruptcy law.
In the event that the rule is not repealed, the group asked that the CFPB review the rule, including stipulations that require past-payment breakdown, servicer transfers, and pre-confirmation cases, among others.
Along with NAFCU, the letter was also signed by the American Financial Servicers Association, Consumer Mortgage Coalition, Credit Union National Administration, HOPE NOW Alliance, Independent Community Bankers of America, and Real Estate Settlement Providers Council.