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GAO: CFPB needs complete plan on effect of new mortgage regulations

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GAO: CFPB needs complete plan on effect of new mortgage regulations

The U.S. GovernmentAccountability Office on July 25 released the results of a study on the ConsumerFinancial Protection Bureau's new mortgage-servicing rules.

Among otherthings, the GAO found that while community banks and credit unions reported thatthe new rules also entailed additional costs, they still engage in mortgage servicingdue to the revenue it generates; the new rules also appeared to be unlikely to affectmost community lenders' decisions to retain or sell mortgage servicing rights.

The GAO alsopointed out that the CFPB's plans for retrospectively reviewing its mortgage-servicingrules are incomplete. The GAO stresses the importance of this, as it noted that"agencies are better prepared to perform effective reviews if they identifypotential data sources and the measures needed to assess rules' effectiveness."

The agency foundthat the CFPB risks not having time to perform an effective review before the scheduledimplementation of the rules in January 2019, with the CFPB reasoning that it istoo soon to identify relevant data and it wants the flexibility to be able to comeup with an effective methodology.

The GAO recommendedthat the CFPB come up with specific metrics, baselines and analytical methods inorder to measure the effects of the new regulations, noting that the CFPB also agreedto complete a plan for a retrospective review that has a refined scope and focusof the mortgage servicing rules.