November 7, 2011 Mr.

Raj Date Special Advisor to the Secretary of the Treasury Consumer Financial Protection Bureau 1801 L St., N.W. Washington, D.C., 20036 RE: Mortgage Consumer Complaint System Dear Mr. Date: The undersigned trade associations, the American Bankers Association, Consumers Bankers Association, Financial Services Roundtable, including its Housing Policy Council, and the Mortgage Bankers Association1 appreciated participating in the

The American Bankers Association (ABA) represents banks of all sizes and charters and is the voice for the nations $13 trillion banking industry and its two million employees. The majority of ABAs members are banks with less than $165 million in assets. The Consumer Bankers Association (CBA) is the only national financial trade group focused exclusively on retail banking and personal financial services banking services geared toward consumers and small businesses. As the recognized voice on retail banking issues, CBA provides leadership, education, research, and federal representation for its members. CBA members include most of the nations largest bank holding companies as well as regional and super-community banks that collectively hold two-thirds of the total assets of depository institutions. The Financial Services Roundtable represents 100 of the largest integrated financial services companies providing banking, insurance, and investment products and services to the American consumer. Member companies participate through the Chief Executive Officer and other senior executives nominated by the CEO. Roundtable member companies provide fuel for America's economic engine, accounting directly for $92.7 trillion in managed assets, $1.2 trillion in revenue, and 2.3 million jobs. The Roundtables Housing Policy Council is made up of thirty-two companies that are among the nation's leaders in mortgage finance. Member companies originate seventy-five percent of the mortgages for American home buyers and provide mortgage insurance and servicing to the majority of American home owners. Member companies participate in the Council through the senior mortgage executive in their company. Members of the Council are: American Home Mortgage Servicing, Inc., Assurant, Banco Popular, Bank of America Corporation, BB&T Corporation, Citigroup Inc., CoreLogic, Deutsche Bank Securities Inc., Essent Guaranty, Inc., First American Title Insurance Co., Fiserv, GMAC Mortgage, LLC, Genworth Financial, Huntington National Group, JPMorgan Chase & Co., Lender Processing Services, M&T Bank Corporation, MetLife Bank, N.A., MGIC, Nationwide, PMI Group, PNC Financial Services Group, Quicken Loans, Radian, RenaissanceRe / Weather Predict Consulting, Saxon Mortgage, Springleaf Finance, Inc., State Farm Insurance Companies, Stewart Title Company, SunTrust Banks, Inc, US Bank, and Wells Fargo & Company. The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees

conference call of the Consumer Financial Protection Bureau (CFPB) on October 20, 2011. On that call, the CFPB outlined its plan to begin accepting mortgage-related complaints via the consumer response portal at www.consumerfinance.gov on or about December 1. The CFPBs complaint resolution system is enormously important to our member organizations and the consumers they serve. While we were grateful for the call, it raised numerous issues that we believe must be resolved before the system becomes operational. If the new consumer complaint system is properly developed and implemented, it will provide a highly efficient and cost effective means for consumers to submit, and lenders to address, consumer complaints. On the other hand, if the system is hastily conceived and implemented, it will unduly increase regulatory burden and costs, put consumers personal information at risk, and, most importantly, harm the very consumers the CFPB is designed to protect. We strongly believe that before the consumer complaint system for mortgages is finalized, CFPB should provide all stakeholders with the opportunity to provide input to the CFPB on the proposed system. This includes consulting and coordinating with other government agencies that receive consumer complaints about financial institutions and giving the industry a reasonable opportunity to provide input regarding the system. Effective collaboration will include getting input from stakeholders on user requirements, testing (including stress testing), training and system documentation. A. Process Consultation with Industry Today, financial services companies have in place a range of systems to address consumer complaints. The CFPB should consult with these companies and draw on their expertise through the undersigned associations. Development of the complaint system should include regularly scheduled calls and/or meetings with a wide a range of industry participants or possibly a representative industry advisory council. Either approach must assure regular input from companies of all types and sizes. While mention was made on the call of the CFPB conducting conversations with individual members to gather input, we believe such an approach is far from optimal; it will exclude important viewpoints and deprive too many entities of understanding as they work toward system implementation. We ask that the CFPB work with us to ensure input from a wide range of institutions.

through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site: www.mortgagebankers.org.

In order to maximize the value of the calls or meetings, we believe areas of concern should be broken into workable subjects. Some of the areas that deserve particular attention are described below. Moreover, we believe that CFPB should provide a more transparent process that allows all stakeholdersrepresentatives of consumers, the banking and nonbanking industry, and other government agenciesequal opportunity to provide input. B. Intake/Submission of Complaints The CFPB indicated it is now finalizing the intake screens for the system that include a questionnaire for complainants that is modeled on the existing credit card complaint system. However, these screens have not been provided to the industry participants. Based on industry experience, consumer complaints regarding their mortgages differ markedly from credit card and other financial concerns. Lenders should be invited to provide input and advice to formulate the intake question screens to ensure they accurately describe consumers complaints. Sound system development in this area will increase efficiency and could help winnow out redundant claims or those that do not involve an actionable complaint. C. Coordination Among Complaint Systems Complaints by consumers are sent to lenders today by state regulators, attorneys general and other federal, state and private agencies, as well as by consumers themselves. Industry input on how these various systems work, their timelines and imperatives, and how they might be coordinated with CFPB complaints would, among other things, inform decisions on how the new system should operate and its timeframes for complaint resolution. Consultation with other regulators to ensure the systems are as compatible as possible is also essential, and as discussed below, is required with federal regulators. Consultation and coordination will not only improve efficiencies, it will help to reduce the potential for consumer confusion. For example, several large financial institutions are implementing requirements in connection with supervisory consent orders. Specifically, the institutions must perform a review, or look back, of accounts over a two year period between January 1, 2009 and December 31, 2010. In connection with this process, on November 1, 2011, the Office of the Comptroller of the Currency and the Federal Reserve announced the establishment of a website, www.IndependentForeclosureReview.com, and a dedicated phone line for consumers to obtain information about the review and claims process. This is in addition to the institutions own efforts to identify and contact individuals who are eligible to participate in this review. Moreover, processes to accomplish the look back have already been approved by the institutions supervisory agencies, and the affected institutions have launched or are about to launch these processes. We believe that a December 1 launch of the CFPBs mortgage portal yet another new intake portal for consumer complaints about mortgages may unnecessarily confuse 3

customers. We anticipate that many consumers may file a complaint in the wrong place, delaying response times, potentially even causing some consumers to miss the April 2012 deadline for initiating the independent foreclosure review process. Others, confused about where to file, may initiate complaints in both places, also resulting in delays and unnecessary duplication of efforts. Confusion and delays also may result when complaints of consumers of banks that are not supervised by the CFPB have to be re-routed to the prudential regulator. To avoid these adverse impacts for consumers, clear guidance on how to handle complaints included in the look back and how to identify and code duplicative complaints is critical. More generally, and as required by the Dodd-Frank Act (see below), the CFPB should consult with each of the federal regulatory agencies to ensure compatible and coordinated consumer complaint systems and processes for directing complaints to the appropriate agency and institution. It needs to be clear to all participants in the systemthe consumer, the financial institution and the agenciesunder what circumstances and when consumer complaints are shared. Another issue that warrants discussion is whether the system should encourage consumers to first contact the financial institution/servicer directly in an attempt to resolve the complaint and submit it through the portal only if it has not been resolved to the consumers satisfaction. Such an approach likely would resolve the majority of consumer complaints and inquiries more quickly. The system could also direct consumers to other more pertinent systems or resources, such as those relevant to loan modifications. D. Nomenclature - Resolution and Closing of Complaints The statute authorizing the CFPB to create a complaint system provides that consumers must be given a timely response to complaints against or inquires concerning a covered person or institutions. In developing the system, the CFPB should clearly define complaint and response. For example, a complaint may be defined not to encompass a Qualified Written Request (QWR) under the Real Estate Settlement Procedures Act (RESPA). Similarly, the definition of a response could mean a lender has acknowledged or investigated the matter and indicated to the consumer what the next steps would be towards resolution. Clearly, lenders should be given the opportunity to provide input on what they regard as appropriate terminology based on their experience. Likewise, although we appreciated the CFPBs staff statements that the CFPB does not plan to impose immediately a tenday time limit for communicating a response, we urge the CFPB to engage the industry in additional discussion about response timeframes that would be appropriate. These time requirements must consider other requirements such as QWR, the complaint escalation process under HAMP and other extrinsic requirements, lenders capabilities, as well as the recognition that mortgage complaints can be complex and require significant time to resolve.

E. Implementation Period Implementing a system of this magnitude will require significant coordination between industry, the CFPB and the other regulatory agencies. Implementation also will require internal complaint tracking and reporting system changes, beta testing, and extensive on-boarding and training of employees. Such changes may be required at a time when many mortgage servicers have been ordered by their regulator to make enhancements to their management information systems. It will be essential that the CFPB consult with the industry to ensure that any changes are coordinated and that there is as much consistency as possible across data fields. In addition, in order to assure adequate time to make these changes, lender input is essential to developing a rollout plan and timetable. Lenders should be consulted on an orderly implementation that would include creation of a detailed users guide or manual, and thereafter, sufficient time for training and testing the system. Notably, the rollout of the credit card complaint process occurred when both the CFPB and the industry knew there were problems that would later have to be worked out. Such an approach, however, would be more problematic for the mortgage complaint process, which is far more complex and will include a far greater volume. Roll-out should not occur until all processes have been thoroughly tested and problems have been identified and resolved. F. Confidentiality of Information Some initial misrouting of credit card complaints has raised concern about the privacy and security of consumers personal information. We believe that there is a much larger opportunity for misrouting of mortgage complaints which exacerbates this concern for the mortgage system. There is also considerable concern about making complaints public at any point in the process, especially prior to their resolution, and about the extent to which the CFPB will share information with state regulators or officials who do not have a need to know or who may not be constrained by confidentiality restrictions. Considering the strong interests of lenders and their customers, a full discussion of the treatment of complaint information is essential. G. CFPB Authority A final concern is that it is unclear what authority CFPB is relying upon to establish the consumer complaint system. The Inspectors General of the Department of the Treasury and the Board of Governors of the Federal Reserve System (Treasury and Fed IGs) indicated in a letter to Members of Congress last January that the Secretary of the Treasury has only limited authority until a Director of the CFPB is confirmed by the Senate. In that letter, the Treasury and Fed IGs concluded that the Secretary may carry out the functions of the Bureau found in subtitle F of title X. In footnote 3 of that letter, they say that "[t]hese transferred authorities are found in section 1061(b) and 1063 of the Dodd-Frank Act, which are effective on the designated transfer date." These provisions do not appear to authorize the establishment of a consumer complaint 5

system. One source would appear to be section 1021(c)(2) of Title X, which includes among the primary functions of the Bureau "collecting, investigating, and responding to consumer complaints." However, since authority to create a consumer database is not found in sections 1066(b) or 1063, we believe it is important for CFPB to clarify its authority. It is important to note that insured depository institutions, which will be the only covered persons subject to this system until a Director is confirmed, already participate in wellfunctioning and long-established consumer complaint systems administered by other government agencies. Accordingly, taking the time to roll-out CFPB's system will not deny consumers the ability to register complaints against those institutions. H. Conclusion As indicated, the foregoing does not by any means constitute an exhaustive list of the issues that need to be resolved before the complaint system is introduced. Considering the array of concerns, we urge the CFPB to delay the launch of the mortgage-related consumer complaints portal and set up meetings with the undersigned representatives as quickly as possible so we can work together to resolve these issues and ensure the establishment of an efficient and effective system to resolve complaints of consumers. To arrange a meeting, if you have questions or wish to discuss any aspect of these comments, please contact Ken Markison, Regulatory Counsel, Mortgage Bankers Association at kmarkison@mortgagebankers.org or (202) 557-2930. Sincerely, American Bankers Association Consumer Bankers Association Financial Services Roundtable Housing Policy Council Mortgage Bankers Association