§ 1024.35(d)

Section-by-section analysis

35(d) Acknowledgment of Receipt

The Bureau proposed § 1024.35(d), which would have required a servicer to provide a borrower an acknowledgement of a notice of error within five days (excluding legal public holidays, Saturdays, and Sundays) of receiving a notice of error. Proposed § 1024.35(d) would have implemented section 1463(c) of the Dodd-Frank Act, which amended the current acknowledgement deadline of 20 days for qualified written requests to five days. Proposed § 1024.35(d) would have further implemented the language in section 6(k)(1)(C) of RESPA prohibiting the failure to take timely action to respond to requests to correct errors by applying the same timeline applicable to a qualified written request to any notice of error.

Industry commenters, including multiple credit union associations, requested that the Bureau lengthen the acknowledgment time period, asserting that five days is unreasonable, especially for smaller institutions. A nonprofit mortgage servicer said the timeframe is insufficient for its small volunteer staff. An industry trade association commenter argued that the acknowledgment requirement creates unnecessary paperwork and should be removed from the final rule altogether. In contrast, consumer group commenters were generally supportive of the acknowledgment requirement, noting that the timeline in the proposal was consistent with that in the Dodd-Frank Act for qualified written requests.

The Bureau believes that acknowledgment within five days is appropriate given that the Dodd-Frank Act expressly adopts that requirement for qualified written requests and differentiating between the two regimes would increase operational complexity. Moreover, the burden on servicers is significantly mitigated by the fact that the error resolution procedures are only applicable to written notices of error. The Bureau further notes that the contents of the acknowledgment are minimal. In addition, servicers need not provide an acknowledgment if the servicer corrects the error identified by the borrower and notifies the borrower of that correction in writing within five days of receiving the error notice. Accordingly, the Bureau is adopting § 1024.35(d) substantially as proposed, except that the Bureau has revised the provision to clarify that the acknowledgment must be written.