WASHINGTON (1/9/13)--A recent Federal Housing Administration (FHA) decision to ease financial reporting regulations for credit unions and other small financial institutions should be welcomed by credit unions involved in FHA lending, Credit Union National Association Senior Assistant General Counsel Jared Ihrig said.
"Small lenders," as determined by federal financial regulators, are now exempt from regulations that require internal control and compliance reports to be submitted to the FHA. Ihrig said these reports can be costly to obtain and maintain on an annual basis.
A regulatory relief measure that permits these same small financial institutions to submit unaudited regulatory reports to the FHA in place of audited financial statements is still in effect.
Small credit unions are defined as those with $30 million in assets or less by the National Credit Union Administration (NCUA). However, this threshold is scheduled to be addressed during this week's NCUA open board meeting, and could ultimately be changed.
FHA Loans are provided by many credit unions. The loans, which are insured by the FHA, offer low down payment and credit score requirements and reduced closing costs to eligible borrowers.
For an FHA letter on the financial reporting changes, use the resource link.