Mortgage Lending Regulations

Impact

Credit union mortgage lending is a vital path to homeownership and financial security for millions of American families. It is critical that regulation of these products be commonsense and include appropriate accommodations so as to not overburden credit unions or price low- and moderate-income borrowers out of the dream of homeownership

Impact

The 2008 financial crisis was caused by sub-prime lenders failing to evaluate borrower's ability to repay, not credit unions. However, in the years after passage of the Dodd-Frank Act, credit unions nonetheless bore the burden of $6.1 billion dollars in regulatory costs, with the impact falling disproportionately on smaller credit unions. These costs were reallocated from other areas, including member benefits in the form of better rates and lower fees. While mortgages must be regulated for the protection of American consumers, financial institutions, and the housing sector, regulators must give serious consideration to the costs and burdens of these requirements for credit unions of all sizes. Wherever possible, regulators should make regulatory exceptions for credit unions and smaller mortgage lenders to strike an appropriate regulatory balance that ensures even small credit unions are able to offer affordable mortgage products to their membership.