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CUNA supports new Reg C threshold
WASHINGTON (9/2/08)—The Credit Union National Association (CUNA) supports a Federal Reserve Board proposed rule to amend Regulation C, the Home Mortgage Disclosure Act (HMDA), by revising the threshold for reporting price information on higher-priced loans. In a comment letter, CUNA said noted that the Fed’s proposed change would bring the regulation in line with recent Regulation Z mortgage lending final rules. Regulation C currently requires lenders to report to regulators annually the spread between the annual percentage rate (APR) on a loan and the yield on comparable Treasury securities if the spread is at least three percentage points for first-lien loans or five percentage points for subordinate-lien loans. Under this proposal, a lender would report the spread if the loan APR exceeds an average of comparable prime mortgage rates by at least 1.5 percentage points for first-lien loans or 3.5 percentage points for subordinate lien loans. By making the threshold identical in both regulations, it will help ease the compliance burden of credit unions and other lenders that must follow the regulations, according to CUNA. However, CUNA also noted its concern that the proposed Jan. 1, 2009 implementation date will not provide sufficient time for lenders to make necessary programming changes. CUNA said the short timeframe “will be even more of a challenge in the current regulatory climate in which the Board and other federal financial institution regulators have issued a significant number of new, complex consumer protection rules over the past several years and will issue several more in the near future.” Use the resource link below to read the CUNA’s entire comment.


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