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CFPB mortgage servicers rule carries a 5,000-loan exemption

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WASHINGTON (1/17/13)--A final rule to require mortgage servicers to simplify billing statements, provide additional notice of rate changes to borrowers and help ensure that consumers know all of their options to prevent foreclosures have been released by the Consumer Financial Protection Bureau. The rule raises a key exemption threshold on monthly mortgage statements, a change that had been urged by the Credit Union National Association in its discussion with the CFPB.

The CFPB rule contains an exemption from some of its provisions for credit unions and other small financial institutions that service 5,000 or fewer loans, which they or an affiliate originate, up from a proposed 1,000-loan threshold.

"We actively advocated for the CFPB to increase the periodic statement requirement threshold from their proposed 1000 loans serviced to a higher number," noted CUNA President/CEO Bill Cheney.

"Our priority has been to ensure that as few credit unions as possible would be subject to these requirements. The 5,000 threshold is a marked improvement over the proposal, and while the devil is in the details, it appears small servicers such as credit unions will also be exempt from the loss mitigation application handling procedures, which is also a significant win for credit unions," he added.

Cheney said that CFPB Director Richard Cordray told him in a phone call prior to the rule's release that key changes would be incorporated in response to input the CFPB had received from credit unions and CUNA.

CUNA noted that more exemptions for credit unions may be contained in the final rule.

CUNA is reviewing the information the agency has released and additional positive provisions may be contained in the final rule.

The final rule, required by the Dodd-Frank Act, is set to go into effect in January 2014 and will require servicers to:

  • Provide borrowers with monthly statements detailing the amount and due date of the next mortgage payment, a breakdown of payments by principal, interest, fees, and escrow, and any recent transaction activity;
  • Inform borrowers of any available loss mitigation options; and,
  • Provide additional notice of rate changes to borrowers.
Servicers will be prevented from moving forward with foreclosure proceedings if a borrower has submitted an application for a loan modification or foreclosure prevention measure. Servicers will also need to consider all available foreclosure alternatives that are available to borrowers, and may not steer borrowers toward a specific alternative. The regulations will also make it more difficult for servicers to move for foreclosure judgment or conduct a foreclosure sale, the CFPB said.

New data storage and form processing standards are also contained in the regulations.

The agency and other regulators will release plain language implementation guides and other materials to help ensure the regulations are more easily implemented. Model and sample forms have also been released for servicers, and the CFPB said it will reach out to educate consumers on the new rules.

CUNA is developing regulatory summaries and charts to outline how the CFPB mortgage regulations will impact key credit union concerns and this information will be on CUNA's website as soon as possible in coming days.

House Speaker John Boehner to address CUNA's 2013 GAC

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WASHINGTON (1/17/13)--Speaker of the House Rep. John Boehner (R-Ohio) will address the Credit Union National Association's 2013 Governmental Affairs Conference (GAC) in Washington on Feb. 26.

"We are very honored to again have Speaker Boehner join us at the GAC," said CUNA President and CEO Bill Cheney.  "We know he has a full agenda in the House with debt ceiling, sequestration and government funding measures all coming to the fore near the time of our conference.



"The Speaker's acceptance of our invitation is indicative of his appreciation for all credit unions do to ably serve their members in Ohio and nationwide."

Speaker Boehner first addressed CUNA's GAC in 2011.  He is one of two sitting Speakers of the House to address the credit union movement's premier national conference.  Then-Speaker Newt Gingrich spoke at the GAC in February 1998 during CUNA, league and credit unions' successful fight to enact H.R. 1151, the Credit Union Membership Access Act.

Sen. Mark Udall (D-Colo.), champion of credit union member business lending legislation in the Senate, also has been added to the growing roster of Washington power players who will address the GAC this year.  Udall will speak Wednesday, Feb. 27.

CUNA's 2013 GAC takes place Feb. 24-28 at the Washington Convention Center in Washington, D.C.  Other confirmed speakers include newly named House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), and House Financial Services Committee senior members Spencer Bachus (R-Ala.) and Ed Royce (R-Calif.).

More congressional and regulatory speakers will be announced in coming weeks.

Inside Washington (01/17/2013)

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  • WASHINGTON (1/17/13)--A Federal Reserve proposal to heighten its oversight of foreign banks in the U.S. also would widen the central bank's regulation of foreign broker-dealers (American Banker Jan 16). The proposal would effectively take over responsibility for foreign broker-dealer supervision from the Securities and Exchange Commission. Bringing foreign bank broker-dealers under its umbrella is an indication the Fed is mistrustful of the SEC, said Margaret Tahyar, a partner with the law firm Davis Polk & Wardwell. Some industry observers have said that the SEC's net capital rule, which allows large firms to increase their leverage, was a driver of the financial crisis …
  • WASHINGTON (1/17/13)--The National Consumer Law Center released a 90-page report  Tuesday criticizing the Consumer Protection Bureau's national servicing standards--even before the agency publishes its final rules. The law center's report, "At a Crossroads: Lessons from the Home Affordable Modification Program," advises that regulators can learn from lessons gleaned  through the  government's Home Affordable Modification program  and should include those lessons into national servicing standards. HAMP was generally deemed unsuccessful because of massive service noncompliance, according to the report. "National loan modification standards should incorporate the successes of HAMP, which provided for increased access to sustainable modifications for many homeowners," the report said. "But national loan modification standards must not fall into the same trap that HAMP did"…
  • WASHINGTON (1/17/13)--Major banks--which typically seek to keep the government at arm's length--are urging U.S. officials to block Iranian cyberattacks against American financial institutions. Banks already have spent millions fighting the attacks (The Wall Street Journal Jan 16). They say it is not their responsibility to fend of attacks from another government. Among the banks affected are PNC Financial Services Group Inc., SunTrust Banks Inc. and BB&T Corp. Financial-services groups last year fought legislation to establish online security standards for key private-sector businesses. Banks claimed the new laws would undermine protections already in place …

Small CU consulting program receives record interest

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ALEXANDRIA, Va. (1/17/13)--A record 319 credit unions have applied for planning assistance and other help through the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) Consulting Program, the agency has reported.

This heightened interest has led to a record number of consulting program participants in the first round of 2013: 240 credit unions will take part. Credit unions that have been accepted into the consulting program were notified in mid-January, OSCUI said. This round of the consulting program will run from January until June. A second 2013 round of the program will begin in July.

Through the consulting program, OSCUI offers budgeting, marketing, policy development and strategic planning assistance. The experienced economic development specialists that offer this assistance also help credit unions tackle other examination issues and issues related to internal controls and regulatory compliance. Assistance with net worth restoration plans or revised business plans, and consulting services to groups that wish to organize a credit union may also be provided, according to the NCUA.

Credit unions with less than $10 million in total assets, charters that have been approved within the past 10 years, or low-income designations may apply for the consulting program. The program is free of charge.

OSCUI Director William Myers said the program has much to offer eligible credit unions.

More than 200 credit unions took part in the most recent round.

Treasury's BSA advisory group seeking members

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VIENNA, Va. (1/17/13)--The Bank Secrecy Act Advisory Group (BSAAG), which ultimately makes BSA policy recommendations to the U.S. Treasury Secretary, is seeking nominations for new members.

The Credit Union National Association is a current member whose term continues through February 2015. CUNA fills the Credit Union Industry Trade Group position on the panel.

The advisory panel operates under the auspices of Treasury's Financial Crimes Enforcement Network (FinCEN) and is chaired by the FinCEN director.

FinCEN is inviting the public to nominate financial institutions and trade groups for membership on BSAAG for a three-year terms. Nominations for individuals will not be considered.

Use the resource link for application rules.

CUNA spotlights CU concerns at today's CFPB mortgage field hearing

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ATLANTA, Ga. (1/17/13)--Regulatory burden and how pending mortgage regulations could impact credit unions will be two items on the agenda when Pam Davis of Delta Community CU, Atlanta, Ga., voices credit union concerns at today's Consumer Financial Protection Bureau (CFPB) field hearing.

Davis, who serves as vice president of real estate services at Delta Community CU, will speak on a panel of three financial services industry speakers. She will speak on behalf of the Credit Union National Association and the Georgia Credit Union Affiliates. CUNA was invited by the CFPB to participate on one of the field hearing panel discussions.

The field hearing is scheduled to begin at 11 a.m. ET at the Rialto Center for the Arts at Georgia State University. League leaders and other credit union representatives will also attend the event.

The hearing will also feature remarks from CFPB Director Richard Cordray, consumer groups and members of the public. League and credit union officials are scheduled to meet directly with Cordray this week.

In her remarks, Davis will urge the agency to recognize the differences between credit unions and for-profit institutions as it develops regulations. She will also encourage the CFPB to exempt credit union activities as broadly as possible in light of those key distinctions, and credit union efforts to offer consumers a good deal.

The CFPB ahead of the hearing released a summary of its final mortgage servicing rule, which will be released in full today.

CUNA anticipates that final rules addressing mortgage loan originator compensation and high-risk-mortgage appraisals will also be released by the CFPB today. The National Credit Union Administration and Federal Deposit Insurance Corp. have already approved the high-risk-mortgage appraisal rule. (See Jan. 16 News Now story: NCUA approves high-risk mortgage appraisal rules)

These regulations are among a number of final rules that the CFPB must release by Jan. 21. Last week, the agency unveiled final rules regarding ability to repay requirements, escrow accounts, and "high-cost" mortgages. (See Jan. 11 News Now story: CFPB QM, ability-to-repay rules are out, CUNA provides summary)