WASHINGTON (11/7/13)--The Credit Union National Association has clearly articulated to members of the U.S. Congress credit unions' compliance concerns related to new mortgage rules, and those concerns were reflected this week in a letter cosigned by 118 U.S. House members.
The letter addresses the Consumer Financial Protection Bureau's six rules for mortgage products and services, required by the Dodd-Frank Act, set to go into effect in January 2014. The rules include the bureau's Ability-to-Repay and Qualified Mortgage standards.
In their letter to the CFPB, the lawmakers urged the bureau to "defer implementation" of pending mortgage rules until Jan. 1, 2015 "in order to ensure financial institutions are able to transition their systems to be in full compliance with the rules."
"We have heard concerns from many community financial institutions that they simply will not be able to meet the January 2014 deadline to have their systems online and in place," the letter stated, noting that the rule presents more than 4,000 pages of directives.
"This task is especially difficult for community financial institutions that may only have one or two compliance officers," and are still working to update their mortgage lending software, the lawmakers wrote.
An inability by financial institutions to comply by the January deadline, however, could result in "significant distortions in the mortgage market affecting the availability of credit for consumers," the letter warned.
CUNA most recently called for a delayed effective date, or other regulatory remedies, in a Tuesday Senate Banking Committee hearing entitled "Housing Finance Reform: Protecting Small Lender Access to the Secondary Mortgage Market."
During that hearing, CUNA Chief Economist Bill Hampel suggested that Congress grant a one-year extension of compliance deadlines for the pending CFPB mortgage rules. If such a delay cannot be created, Congress should provide credit unions with a buffer of at least six months as they work to come into compliance with qualified mortgage standards, he said.
A similar six-month delay should also be applied to legal liability provisions of mortgage regulations, Hampel added.