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July 26, 2012
In a win-win move for consumers and credit unions, Oregon Attorney General Ellen Rosenblum this week chose to not place additional burden on financial institutions with new rules regulating the conduct of home loan mortgage servicers. Instead, Oregon’s top attorney announced that the rules adopted are intended to clearly identify conduct that violates the Oregon Unlawful Trade Practices Act, a consumer protection law that has been in effect since the 1970s.
In announcing today's adoption of the rules, Attorney General Rosenblum said, "We appreciate the input we received in the rulemaking process and we are committed to continuing discussions so we have rules that protect Oregon homeowners, while providing clear guidance to loan servicers."
The Department of Justice adopted temporary rules in February 2012 and then proposed more detailed servicer rules that were modeled after servicer standards included in a nationwide settlement agreement with the nation's five largest loan servicers. The Department initiated a public hearing and comment process which concluded on July 17, 2012.
As a result of that process, Attorney General Rosenblum, who took office on June 29, 2012, decided to adopt as permanent the temporary rules that had been in effect since February. In addition, the Department will reinitiate the rulemaking process to explore whether any changes are needed to the rules adopted today, as well as any need for more detailed servicer rules.
Oregon Department of Consumer and Business Services Director Patrick Allen said, "I look forward to working with the Attorney General to ensure consumers are protected and we maintain a healthy mortgage market."
The rules adopted place no new obligations on local banks and credit unions, but make it unlawful for a mortgage loan servicer to:
This rule is considered a victory for credit unions as another regulation that was proposed by the previous Attorney General was dropped with this one replacing it. The opposed rule was based on the recent multistate settlement agreement between the Attorney Generals of 49 states and the nation's five largest mortgage servicers. The rule was harmful to credit unions and the Northwest Credit Union Association submitted testimony, participated in workgroup meetings and submitted an official comment letter opposing that mortgage servicing rule. This new proposed rule was based on temporary rules released last February.
Oregon Governor John Kitzhaber swore in Ellen Rosenblum on June 29th as the interim replacement for Attorney General John Kroger who left office on the same day. Rosenblum also won the Democratic primary for Attorney General.
Questions? Contact a member of the Association’s Legislative Affairs team:
Posted on 07/26/2012View All Articles
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