CFPB Issues NAL Templates to Support Struggling Homeowners

The Consumer Financial Protection Bureau, May 22, 2020, announced the issuance of two No-Action Letter Templates that will help struggling homeowners seeking mitigation efforts. The NAL Policy, introduced in 2019, is aimed to encourage the creation of innovative products and services for consumers, as well as including a streamlined review process that emphasizes consumer benefits and risks of the applicant’s product or service. The Bureau has stated that under certain facts and circumstances, there will be no supervisory or enforcement action against a company for providing a product or service. The improved Policy permits service providers and trade associations to secure a foundation template for NAL applications that provide consumer financial products and services.

The first NAL template is focused on mortgage servicers that want to help struggling mortgage borrowers through loss mitigation services or foreclosure avoidance services. The template has been requested by Brace Software, Inc., and mortgage servicers can use Brace’s online platform to put in effect their loss efforts.

Due to the COVID-19 pandemic, there has been an increase in loss mitigation requests. To more appropriately address this, the CFPB has taken steps to bring the Fannie Mae Form 710 online to improve the current loss mitigation application process.

The agency also issued a template related to small-dollar credit products. See the following links for more information:

Brace’s application: https://files.consumerfinance.gov/f/documents/cfpb_brace_no-action-letter-request.pdf.

The Brace NAL Template: https://files.consumerfinance.gov/f/documents/cfpb_brace_no-action-letter.pdf.

BPI’s application: https://files.consumerfinance.gov/f/documents/cfpb_bpi_no-action-letter-request.pdf.

The BPI NAL Template: https://files.consumerfinance.gov/f/documents/cfpb_bpi_no-action-letter.pdf.

For more information, contact Troy Garris directly at 301-461-8952 or troy@garrishorn.com.