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Tuesday, the House of Representatives will consider bills important to credit unions: H.R. 1408, the Mortgage Servicing Asset Capital
Requirements Act, and H.R. 1529, the Community Institution Mortgage Relief Act. CUNA strongly supports both measures: each represents a small step in the right direction toward removing barriers that keep credit unions from more fully serving their members.
H.R. 1408 would direct
federal banking regulators to further study appropriate capital requirements
for mortgage service assets held by nonsystemic banking institutions. It would put a temporary delay on the
implementation of the mortgage servicing rights aspect of NCUA’s risk-based
capital proposal. In a letter
of support that we sent to the sponsors of the legislation, Representative
Ed Perlmutter (D-CO) and Blaine Luetkemeyer (R-MO), earlier this year, we said:
Many credit unions retain the
servicing rights of loans they originate, retaining and developing their member
relationships. Under the National Credit Union Administration’s Risk Based
Capital Proposal, higher risk weightings are placed on mortgage servicing assets.
CUNA strongly believes nothing should be done by regulation that would
negatively impact the relationship between a credit union and their
member-owners. Unnecessarily high risk weightings on mortgage servicing assets
could potentially make mortgages more costly to the consumer or disadvantageous
to the credit union to pursue these services.
1529, sponsored by Representatives Brad Sherman (D-CA) and Blaine Luetkemeyer
(R-MO) would make two changes to the Real Estate Settlements Procedures Act
(RESPA) to reduce the burden on small financial institutions. It would exempt
mortgage loans made by financial institutions under $10 billion in assets and
held in portfolio for three years from RESPA’s escrow requirements; and, it
would also exempt mortgage servicers that service fewer than 20,000 mortgages
annually from the requirements of Section 6 of RESPA. We think these changes are important to
encourage credit unions to continue to offer certain higher-priced mortgages.
unfortunate thing about H.R. 1529, as we noted in our support
letter earlier this year, we believe the CFPB had authority under law right
now to provide these accommodations.
They have been unwilling to do so, which is why it is necessary for
Congress to act.
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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