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FTC requests comment on mortgage relief rule changes
WASHINGTON (3/11/10)—The Federal Trade Commission (FTC) this week issued for public comment proposed rules that would change its current rules for for-profit companies that provide mortgage assistance relief services. The proposal excludes financial institutions that own or service loans. While the release does not specifically mention state-chartered credit unions, “the effect is the same,” Credit Union National Association (CUNA) Senior Assistant General Counsel Jeff Bloch said. CUNA last year specifically asked the FTC to exclude state-chartered credit unions from these rules. The FTC proposed rules also exempt federally chartered credit unions, as they are not under the FTC's authority for purposes of this rule. Though the FTC “is mindful that consumers at risk of foreclosure could benefit from assistance in refinancing,” the FTC is “concerned that services purported to help consumers obtain refinancing could be marketed deceptively as a means to avoid disclosure.” The proposed rule, which was published in the Federal Register, would prohibit mortgage assistance providers from “making false or misleading claims” and impose new recordkeeping, disclosure, and compliance requirements. The proposed rule also would prevent the providers from collecting advance fees for their services. The FTC in the release specifically asks the public how the proposed rules would “affect the provision of different types of mortgage assistance relief services,” as well as individual consumers and service providers. The FTC has also requested any evidence that points to consumers being misled in the “promotion and sale” of mortgage assistance relief services. Information on any other types of mortgage assistance that is being offered to consumers should also be provided in any responses to the Notice of Proposed Rulemaking. The FTC also asked “what changes, if any” should be made to increase potential benefits and decrease potential costs for both the industry and consumers. For the FTC release, use the resource link.
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