Compliance Blog

Written by Eliott C. Ponte, Regulatory Compliance Counsel

CFPB Issues Guidance on Private Mortgage Insurance

The CFPB recently issued a bulletin that provides guidance to mortgage servicers regarding the cancellation and termination of private mortgage insurance (PMI).  The CFPB stated it issued the bulletin because it has “identified substantial industry confusion over implementation of the PMI cancellation and termination requirements in the Homeowners Protection Act.”  This statement is consistent with previously released supervisory highlights, which state CFPB examiners have found excessive delays in processing borrower requests for PMI cancellation and improperly handling unearned PMI premiums in violation of the Homeowners Protection Act.  The bulletin attempts to clarify industry “confusion” as it explains PMI requirements and findings the CFPB has made in the course of exercise of its supervisory and enforcement authority under the Homeowners Protection Act. 

 Specifically, the bulletin addresses: (1) borrower-requested cancellation of PMI, which can occur when once an 80% loan-to-value (LTV) threshold is reached (and other conditions are met); (2) automatic termination of PMI, which can occur once an 78% LTV threshold is reached; (3) final termination of PMI (also known as midpoint of the amortization period); (4) PMI refunds, (5) annual PMI disclosures, and (6) investor guidelines.  Credit unions should note that the CFPB bulletin neither imposes new PMI requirements, nor creates any new mortgage servicer responsibilities.  Moreover, the bulletin does not discuss situations where mortgage insurance will never terminate (for instance, a mortgage that is insured by the Federal Housing Administration will remain for the entire life of the loan).  Nevertheless, credit unions reviewing their PMI policies and procedures for compliance may want to refer to this bulletin.  The CFPB PMI Bulletin can be found on the CFPB’s website.

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Updates to the TILA-RESPA Integrated Disclosure Rule Material

Last week the CFPB announced that it updated several TILA-RESPA Integrated Disclosure Rule materials to bring them into alignment with the new effective date of October 3, 2015.  The materials updated include the TILA-RESPA Integrated Disclosure rule small entity compliance guide, the TILA-RESPA Integrated Disclosures Guide to the Loan Estimate and Closing Disclosure forms (also known as the Guide to Forms), and the TILA-RESPA Integrated Disclosures timeline.  Credit unions can access the updated materials on the CFPB’s TILA-RESPA Integrated Disclosure rule implementation website.

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Planning and Implementing Large-Scale Credit Union Collaborations

Live Webcast: Thursday, August 13 | 2:00 p.m. – 3:30 p.m. ET

Two of our industry’s largest service collaborations saved credit unions millions of dollars by improving service, enhancing speed-to-market, and cutting costs.  Kirk Kordeleski helped design both of them.  In this webcast, Kirk will help you add value and lower costs by discussing his collaborative models.  By watching this webcast, you will uncover lessons learned, challenges and opportunities, governance structure discussions and more, all towards making your organization more scalable.