I don't get the Small Servicer Guide--it goes on and on and on and on about the parts of the rule that small servicers are exempt from.....why? Makes for a confusing read.

I suspect that's because there was a fair bit of confusion by institutions around the small servicer exemption when the TILA/RESPA Servicing Rule was initially published a few years ago. There was also a misconception for a time that being a small servicer exempted your institution from all aspects of the TILA/RESPA servicing rule requirements, which of course is wrong.

I understand......but why does the "small servicer" guide need to go in depth into periodic statements (for only one example) when small servicers are EXEMPT from that?

Because not all small servicers are small servicers. You're looking at a very technical definition within § 1026.41(e)(4)(ii). The small servicer guide is aimed at servicers that might have a small operation but may or may not meet that technical definition. For example, the servicer could be servicing only 3,000 accounts, but half of them are serviced for a fee on behalf of a non-affiliated creditor that holds its loan in portfolio but contracts out the servicing.

I would agree that such servicers would be few and far between these days, but ....

And there's also the possibility that today's small servicer will grow up and go big time, in which case it will need to behave like one of the big guys.

I guess i figured the "small servicer" guide was aimed at banks who are "small servicers" as defined by the servicing rules--it almost seems like this guide is for everyone, big and small servicers combined, but they just decided to call it a "small servicers" guide. I would have thought there would be a small servicers guide (with the stuff not applicable omitted) and a guide for everyone else ("large servicers" i guess).

To me, it's like having a "guide to how the Federal govt. works" and including how state, local, and municipal governments work too. It is good information if you're in the market for it......but if you are seeking out the Federal govt. pamphlet, you aren't interested.

The guide is for everyone, it isn't designed for "small servicers" under the rule as the name would suggest. The CFPB has issued small servicer guides for other rules too, which have no small servicer provisions in them. It is just designed to be a "easy to read" guide for FI's that don't have in-house lawyers etc.

They actually call them "small entity" guides, right? Then you have small servicers within RESPA's servicing rules, small creditors under Reg Z's ATR/QM rules, and others. So many definitions in the compliance world!

I guess i confused myself...i had renamed it "small servicer guide"...but you are correct....they are actually called "small entity" guides. I think part of my confusion was that this is the first "small entity" guide i have really used, because i was struggling with the servicing revisions.....the previous ones i never really felt the need to use. Thanks everyone.