I am having difficulty understanding the bureau's intent for the final periodic statement for charged-off loans “Suspension of Statements & Notice of Charge Off—Retain This Copy for Your Records.”

The exemption requirements 41(6)(i)(A) state "charged- off the loan in accordance with loan-loss provisions and will not charge any additional fees or interest on the account"


To me, this statement means that there will be NO fees/interest charged to the borrower once this final statement is delivered. However: if you look at the next section (ii) Resuming compliance, we have a contradiction:
"If a servicer fails at any time to treat a mortgage loan that is exempt under paragraph (e)(6)(i) of this section as charged off or charges any additional fees or interest on the account, the obligation to provide a periodic statement pursuant to this section resumes."

How can a servicer be allowed to charge fees after they deliver a statement with the content "The periodic statement must clearly and conspicuously explain that, as applicable, the mortgage loan has been charged off and the servicer will not charge any additional fees or interest on the account"

Are we allowed to change the wording to address potential for future charges. For example: we charge a fee, we send another final statement with that information??

I don't think you can change the wording. Let me do a little research on this. My question - if you don't mind, is how are you showing all the information on your statement? Are you putting the “Suspension of Statements & Notice of Charge Off—Retain This Copy for Your Records.” and then all the other verbiage under that or are you putting the other verbiage in the Important Information section?

OK- so went back and read the rule and you only put the language in that applies to the situation. For example, if the borrower filed BK and has no personal liability- you can't include the statement "you remain liable..."

If after you take the exemption (charging no fees/etc.), you can lose the exemption if you need to assess fees or interest. At that point, you are required to provide periodic statements again. I hope that helps.

Any direction on my question (where the language "You will not receive periodic statements, etc.) needs to go, would be appreciated. I don't see anything in the FR about it other than the "Suspension of Statements..." language must be in BOLD.

Thanks!

I don't believe it needs to go anywhere in particular. Just has to meet the clear and conspicuous standard.

Comment to Paragraph 41(e)(6)(i)(B)
"...clearly and conspicuously provide certain explanations to the consumer, as applicable, but no minimum type size or other technical requirements are imposed...."

I would like to jump into this conversation as well.

What if we decided to continue sending statements to charged off customers, is there any particular language that needs to be on the statement?

Are you continuing to accrue interest and fees? You aren't going to foreclose?