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CUNA Regulatory Comment Call

June 5, 2009

FTC Advance Notice of Proposed Rulemaking - Mortgage Acts and Practices

EXECUTIVE SUMMARY

The Federal Trade Commission (FTC) has initiated two advance notice of proposed rulemaking (ANPR) with regard to mortgage loans. The purpose is to request and analyze comments in response to the ANPR for purposes of developing specific proposed rules in the future that would prohibit or restrict mortgage loan practices.

One ANPR addresses the activities that occur throughout the mortgage loan process. This includes advertising, marketing, origination, appraisals, and loan servicing. The other ANPR addresses the practices of those who offer loan modification and foreclosures rescue services to consumers, which have been the subject of recent scams.

For both ANPRs, the FTC is requesting general comments as to whether the agency should develop rules to restrict or prohibit activities in these areas. These ANPRs do not include any detailed or specific proposals. Any rules that would be developed would be issued under the unfair or deceptive acts or practices provisions of the FTC Act.

The rules adopted by the FTC will not apply to banks, thrifts, or federal credit unions. However they will apply to other entities in which the FTC has jurisdiction under the FTC Act and this would include state-chartered credit unions. Any rules that would apply to state-chartered credit unions would be in addition to the current rules that apply to mortgage lending.

Comments in response to the ANPR on activities that occur throughout the mortgage loan process are due by July 30, 2009. Please submit your comments to CUNA by July 21, 2009. Comments directed to the FTC must refer to “Mortgage Acts and Practices Rulemaking, Rule No. R911004.”

Comments in response to the ANPR on activities offered by loan modification and foreclosure rescue services are due by July 15, 2009. Please submit your comments to CUNA by July 7, 2009. Comments directed to the FTC must refer to “Mortgage Assistance Relief Services Rulemaking, Rule No. R911003.”

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.com or to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.com; or mail them to Mary or Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, 6th Floor, Washington, DC 20004. You may also contact us if you would like a copy of the ANPRs or you may access them on the Internet at the following addresses:
http://www.ftc.gov/os/2009/05/R911004mortgageacts.pdf

http://www.ftc.gov/os/2009/05/R911003mortgageassistance.pdf

QUESTIONS TO CONSIDER REGARDING THE FTC ADVANCE NOTICE OF PROPOSED RULEMAKINGS

Do you agree that any rules the FTC develops in this area should not apply to state-chartered credit unions or would that depend on the acts or practices that would be restricted or prohibited?

Are there any specific acts or practices that should be prohibited or restricted in new FTC rules with regard to advertising, marketing, loan originations, appraisals, and servicing for mortgage loans? If so, are there specific types of loans that they should apply to or should they apply to all loans? What would be the benefits of these restrictions or prohibitions?

Are there specific acts or practices that should be prohibited or restricted with regard to those who offer loan modification and foreclosures rescue services to consumers? These may include banning the collection of fees in advance, other restrictions on fees, requirements with regard to refunds, requiring written contracts and disclosures, providing consumers with the right to cancel in certain circumstances, and banning the transfer of the title to the home? To what extent do you provide or advertise loan modification services?

Other comments?

Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Luke Martone • Senior Regulatory Counsel • (202) 508-6743 • lmartone@cuna.com

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