Five credit union executives weighed in on the ConsumerFinancial Protection Bureau's proposed mortgage servicer rules during an outreach meetingwith the CFPB's Small Business Review Panel.

Part of a group of 16 representatives from “small entities”,which include commercial banks and credit unions with fewer than$175 million in assets, those comments were compiled into a reportthe bureau posted Monday on its website.

The proposed mortgage servicer rules were released Aug. 10. Theoutreach meeting was in April.

Credit unions provided the panel with an estimate between$20,000 and $40,000 in start-up costs to implement one of theproposed requirements, which would provide consumers with regularmonthly mortgage statements that would include a breakdown ofpayments by principal, interest, fees, and escrow, the amount ofand due date of the next payment, recent transaction activity andwarnings about fees.

One credit union representative stated it recently cost thecooperative $20,000 to make “minor changes” to statements, andanother credit union reported that switching to a periodicstatement system would cost as much as $40,000 in start-up costs,not including time.

In general, the small entities represented use third-partyvendors to provide mortgage statements, and as small clients, theysaid they would have little influence over price increases tocomply with the proposed rules.

However, they also conceded that if vendors were required toimplement the proposed rules for all clients, costs would besomewhat mitigated.

Another proposed rule would require servicers to provideborrowers with two written notices before charging borrowers forforce-placed insurance.

The report didn't reveal much objection among credit unions inattendance, as one credit union said it already provides noticessimilar to those proposed, and another credit union said itsforce-placed insurance notification policy provides moreinformation than proposed.

In general, the CFPB reported, the small entity representativesstated that generally, they did not engage in many of the practicesthat contributed to the mortgage market crisis.

Small companies generally use a “high-touch” model of mortgageservicing that involves constant customer contact and high levelsof service in order to ensure that loans perform well.

New compliance burdens such as those proposed by the CFPB wouldmake it increasingly difficult for small firms to stay in themarket and to provide choices to consumers, the group said.

However, the small entity representatives also told the CFPBthat they did not foresee the proposed rules would increase thecost of credit to consumers.

The five credit union executives included BrianBarkdull, president/CEO of the $164 million American SouthwestCredit Union of Sierra Vista, Ariz., Tiffany Michel, vice presidentof lending at the $59 million Omaha Police FCU of Nebraska, David Wright, president/CEO ofthe $43 million Services Center FCU of Yankton, S.D., VictorPetroni, senior vice president of lending at the $78 million FirstNew England FCU of East Hartford, Conn., and Christine Wiley,president/CEO of the $156 million Rocky Mountain Law Enforcement FCU of Denver.