The Consumer Financial Protection Bureau (CFPB) encourages its supervised entities to work with consumers who may be at financial risk due to the major disaster caused by Hurricane Harvey. This event will cause financial strain on consumers and communities. By providing flexibility and other assistance to consumers in communities under such stress, supervised entities can lessen negative impacts and hasten recovery. These efforts may also build goodwill and provide other benefits to the institutions undertaking them. When communities thrive, so do the financial institutions that serve them, the CFPB advisory stated.
In providing assistance to consumers, supervised entities should, to the extent possible, maintain adequate staffing to address consumers’ needs following this major disaster. Additionally, to the extent consistent with applicable law, the Bureau encourages supervised entities to address consumers’ needs by taking the following actions in the aftermath of Hurricane Harvey:
- Offering penalty-free forbearance or repayment periods with clearly disclosed terms;
- Limiting or waiving fees and charges, including overdraft fees, ATM fees, or late fees;
- Restructuring existing debt by, for example, extending repayment terms with clearly disclosed terms;
- Refinancing existing debt or extending new credit with terms favorable to the consumer. Terms could, for example, reduce costs, limit payment amounts, or offer consumers other flexibility;
- Easing documentation or credit-extension requirements;
- Increasing capacity for customer service hotlines, particularly those that serve consumers in languages other than English; and/or;
- Increasing ATM daily cash withdrawal limits.
The CFPB’s advisory statement also pointed out that supervised entities generally include large insured depository institutions and their affiliates, large insured credit unions and their affiliates, and certain non-depository consumer financial services companies.
“In addition to consumer financial laws subject to the Bureau’s authority, “applicable law” includes all State and Federal requirements to which supervised entities are subject and any requirements of other agencies pursuant to such authorities. Accordingly, supervised entities should take care that any actions they take to assist consumers following major disasters or emergencies are consistent with such requirements,” the statement said.
For specific regulatory guidance, the Bureau encourages supervised entities to make use of existing regulatory flexibility where doing so would benefit consumers affected by a major disaster or emergency.
An example appraisers need to be aware of is Regulation B, the implementing of the Equal Credit Opportunity Act.
“Regulation B requires creditors to provide applicants for first-lien loans on a dwelling with copies of appraisals, as well as other written valuations, developed in connection with the application promptly upon completion, or three business days prior to consummation of the transaction (for closed-end-credit) or account opening (for open-end-credit), whichever is earlier,” the advisory statement said.
“However, the consumer may waive the timing requirement and agree to receive any copy at or before consummation or account opening, except where otherwise prohibited by law, the statement added.
12 CFR 1002.14(a)(1) states that the waiver must generally be obtained at least three business days prior to consummation or account opening unless it pertains solely to the receipt of a copy of an appraisal or other written valuation that contains only clerical changes from a copy that was already provided to the applicant three or more business days prior to consummation or account opening. The applicant may provide the waiver through an oral or written statement.
"The bureau recognizes that supervised entities may themselves experience difficulties due to a major disaster or emergency," the CFPB stated when addressing its supervisory response. "To that end, when conducting examinations and other supervisory activities, the bureau will consider the circumstances that supervised entities may face following a major disaster and will be sensitive to good-faith efforts to assist customers."