A no-action letter (NAL) issued Friday to Bank of America (BofA) by the federal consumer financial protection agency provides there will be no supervisory findings or enforcements issued regarding the bank’s funding arrangements with housing counseling agencies certified by the Department of Housing and Urban Development (HUD) as long as certain conditions exist.
Specifically, the letter refers to no action under section 8 of the Real Estate Settlement Procedures Act (RESPA), relevant portions of Regulation X (implementing RESPA), and the CFPB’s authority to prevent unfair, deceptive, or abusive acts or practices.
“NALs provide increased regulatory certainty through a statement that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances,” the Consumer Financial Protection Bureau (CFPB) stated in announcing the NAL.
The CFPB points to its revised NAL Policy from last September 2019. This revised policy “improved on the Bureau’s 2016 NAL Policy by having, among other things, a more streamlined review process focusing on the consumer benefits and risks of the product or service in question,” the agency said.
As background, the bureau said it issued its first NAL under the revised policy, also in September, in response to a request by HUD on behalf of more than 1,600 housing counseling agencies that participate in HUD’s housing counseling program. “The NAL was issued after HUD brought concerns to the Bureau about HCAs and mortgage lenders not entering into agreements that would fund counseling services due to uncertainty about the application of the Real Estate Settlement Procedures Act,” it said. The bureau said the NAL was to facilitate HCAs entering into such agreements with lenders and enhance the HCAs’ ability to get funding fron additional sources.
It also issued a template that the bureau said could serve as the basis for no-action letters by mortgage lenders. BofA based its NAL application on that template, the bureau said.