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74 Since the Great Recession, the compliance landscape in the mortgage servicing industry has shifted dramatically. With the enactment of the Dodd Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") and the subsequent formation of the Consumer Financial Protection Bureau ("CFPB" or "Bureau"), keeping up with the pace and breadth of regulatory changes has been a daunting effort. Servicers have to expend substantial resources to comply with evolving standards imposed by the Bureau, not to mention the state and local regulations and judicial decisions that have compounded alongside the federal overhaul. is new focus on compliance has deeply impacted the small to mid size servicer in recent years. CFPB RULEMAKING Dodd-Frank Section 1024 grants the CFPB supervisory authority over nonbanks that offer three specific types of consumer financial products or services: mortgages, private education loans, and payday loans. e Bureau is authorized to supervise these entities for purposes of assessing compliance with federal consumer financial law; obtaining information about the companies' activities and compliance systems or procedures, and detecting and assessing risks to consumers and consumer financial markets. From the beginning, the CFPB has made the mortgage industry a top priority in its rulemaking efforts. In 2014, the Bureau enacted the final mortgage servicing rules, which for the first time created national servicing standards. Since then, the CFPB has adopted numerous amendments to those rules, with many others proposed and pending. Complicating matters even more, the Bureau does not always adhere to the standard notice or comment process when enacting a rule. Rather, it has used public statements and enforcement actions to implement policy changes. is process creates a great deal of regulatory uncertainty due to the constant evolving requirements. With the growing number of rules from the Bureau, state regulators, local requirements and judicial decisions, servicers of all sizes—including small and mid size—are spending a considerable amount of resources to track, analyze and implement regulations. THE INDUSTRY'S RESPONSE: PEOPLE AND TECHNOLOGY In response, the mortgage industry as a whole has seen an increase in the hiring of legal, compliance and risk management professionals. ese individuals are employed by servicers to research, analyze and implement new regulations and guidelines. Beyond hiring compliance personnel, servicers also have to spend money and time on employee training, specifically covering new required processes and procedures. I N D U S T R Y I N S I G H T / M A R I A M O S K V E R DISPARATE IMPACT THE UNEVEN COMPLIANCE BURDEN ON SMALL AND MID SIZE SERVICERS

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