The rule, titled “Streamlining Mortgage Servicing for Borrowers Experiencing Payment Difficulties (Regulation X),” is the subject of a report Wednesday (Nov. 11) by the Consumer Financial Services Law Monitor.
According to the report, the White House Office of Management and Budget will now review the rule. While it’s not clear what the rule entails, the report argued this submission is the clearest sign to date that the CFPB aims to finish a loss mitigation overhaul it proposed in 2024.
Most observers, the report said, expect the final rule to look markedly different from the initial proposal. That proposal, created under President Joe Biden, would have established stronger protections for borrowers, the report added. The banking industry has pushed back, calling these protections overly broad.
“We won’t know the final rule’s content until it is published,” the report added. “But the comment record and the current Bureau’s priorities point toward a significantly narrower rule.”
The report also noted that since the start of the second Trump administration, the CFPB “has also rescinded prior guidance and signaled that it prefers clear, fixed rules to open-ended frameworks like the one in the 2024 proposal.”
Meanwhile, PYMNTS wrote earlier this week about the future of the CFPB as Sen. Elizabeth Warren, D-Mass., is likely set to become chair of the Senate Banking Committee. As that report noted, this comes as the bureau is reconsidering its open banking rule, including whether banks should be permitted to charge for access to customer-authorized data.
“Banks sit on both sides of that decision,” the report said. “They hold account information that FinTechs use to build services, and they buy services from FinTechs that connect customers to accounts held elsewhere. The price of that access can affect the cost of offering account-linking or cash flow tools.”
A pre-election survey of 100 FinTechs by PYMNTS Intelligence and Velera shows that 70% prioritized data security and 60% prioritized compliance, versus 50% that prioritized artificial intelligence automation. An additional PYMNTS Intelligence study classified 36% of credit unions as “quick followers,” which introduced products once shown evidence they work, compared to 5.2% that strive to launch first.
“Neither survey measured a response to the election,” PYMNTS wrote. The specific reason for caution on open banking is commercial. A bank or credit union can test a product while leaving a broader rollout contingent on what it will cost to obtain the data.”
