WASHINGTON (5/29/12)—The Credit Union National Association (CUNA) has significant concerns regarding both the individual and cumulative effects that the Consumer Financial Protection Agency's planned changes to mortgage rules will have on credit unions, and CUNA continues its meetings with the agency to detail these concerns.
The CFPB is developing mortgage-related proposals in such areas as mortgage originations, mortgage servicing, appraisals, Truth in Lending Act/Real Estate Settlement Procedures Act form consolidation, changes to the Home Owners Equity Protection Act (high rate, high fee mortgages) and requirements to consider a borrower's ability to repay a mortgage loan.
Most of these proposals are expected to be issued for comment in July.
In a meeting with CFPB officials late last week, CUNA urged the bureau to consider, as it moves forward with drafting the mortgage rules, that credit unions did not cause the financial crisis and have not engaged in abusive mortgage lending practices.
As consumer-owned cooperatives, CUNA reminded, credit unions have developed programs and services that seek to meet their members' needs for affordable lending products, rather than to maximize credit unions' income from fee-based services, as many banks do.
Peter Carroll, CFPB assistant director of mortgage markets, Sean O'Mealia, CFPB fellow, and Bart Shapiro, of the CFPB's office of community banks and credit unions, met with CUNA Deputy General Counsel Mary Dunn, Jared Ihrig, CUNA regulatory counsel, and Kristina Del Vecchio, CUNA counsel for special projects.
The CFPB is empowered to exempt financial service providers from certain regulatory requirements and CUNA called on the agency to work with the credit union system and to invoke that authority as broadly as possible to minimize the impact of these rules on credit unions.
For any rules that credit unions are subject to, CUNA urged the agency to be mindful of the overall impact on credit union mortgage originators and servicers, particularly since a number of credit unions rely on vendors to provide statements and meet other compliance responsibilities.
CUNA recommended that the agency include an executive summary with every major rulemaking and to spread out the issuance of proposals and stagger effective dates of final rules as much as possible.
CUNA will be following up with CFPB on all of these issues.