To help financial service providers assist struggling borrowers during the coronavirus pandemic, the Consumer Financial Protection Bureau on Friday issued two no-action letter templates that are intended to help institutions make their own NAL applications for certain consumer financial products and services, as allowed under the CFPB’s innovation policy.
The first NAL template—which is intended for mortgage servicers seeking to offer foreclosure prevention and other loss mitigation efforts—was requested by Brace Software. It would enable servicers to use Brace’s loss-mitigation platform, an online version of the Fannie Mae Form 710. The bureau noted that “digitizing the loss mitigation application process has the potential to improve a process that is experiencing an increase in loss mitigation requests from consumers due to the COVID-19 pandemic.”
The CFPB issued a second NAL template on small-dollar lending—requested by the Bank Policy Institute—that insured depository institutions may use to apply for a NAL covering their small-dollar credit products. The NAL template comes as financial regulators, including the CFPB, have encouraged banks to offer responsible small-dollar lending products to help meet consumers’ financial needs during the pandemic. Read more.