WASHINGTON (6/11/15)--CUNA has joined forces with 18 other trade associations to emphasize to Congress the need for a temporary “safe harbor,” at least until the end of the year, for credit unions and other institutions making good-faith efforts while implementing mortgage loan transaction requirements of the Consumer Financial Protection Bureau’s (CFPB) Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures (TRID) regulation.
The trade associations support a bill, H.R. 2213, which would put in place a firm safe harbor to protect credit unions and other financial institutions from enforcement and liability for a set time as they adjust to one of the biggest changes to the mortgage market in recent memory. CUNA wants the safe harbor extended to at least the end of the year.
The 19 trades joining together to advocate a safe harbor represent credit unions, banks, mortgage insurers, other mortgage lenders, brokers, escrow, land title, appraisals, home builders, realtors and real estate service providers.
H.R. 2213 is one of 12 bills--including six regulatory relief bills supported by CUNA--under discussion today at a hearing of the House Committee on Financial Services. The subcommittee will hold the hearing, titled “Examining Legislative Proposals to Preserve Consumer Choice and Financial Independence,” at 2 p.m. (ET) today to discuss each bill’s merits.
CUNA and its partners in a letter Tuesday to House Financial Services Committee Chair Jeb Hensarling (R-Texas) and ranking member Rep. Maxine Waters (D-Calif.) urged passage of H.R. 2213. “A hold-harmless period helps ensure consumers’ real estate closings will not be disrupted after this complicated regulation’s Aug. 1 effective date,” said the trade associations.
The letter noted that 250 members of the House and 41 senators have written to CFPB urging the action that H.R. 2213 would mandate.
Both CFPB and the National Credit Union Administration have pledged leniency in enforcing the new regulation. However, CUNA and its partners’ letter said while they appreciated the sensitivity to the progress of good-faith efforts, the “industry needs more certainty that their good-faith efforts to comply while still meeting consumers’ expectations does not expose lenders and settlement service providers to litigation during the initial period after the regulation becomes effective. This certainty will reduce the likelihood that consumers will experience delays or disruptions in the months following the Aug. 1 implementation date.
“While the industry has been granted time to prepare for this new disclosure regime, there is no transition period for the regulation. A hold-harmless period allows the bureau to work with industry to gather data about implementation and provide written guidance to address common industry implementation hurdles that emerge after these new disclosures are put into use,” said the letter.
CUNA also expressed the need for the safe harbor period in a separate letter Tuesday to the subcommittee’s chair, Rep. Randy Neugebauer (R-Texas) and ranking member Rep. Lacy Clay (D-Mo.).
“Credit unions face a crisis of creeping complexity with respect to regulatory burden,” wrote CUNA President/CEO Jim Nussle. “The ever-increasing and ever-changing regulatory burden credit unions face means that credit and services are less available and more expensive for members. We appreciate the efforts of the committee to understand the burden small institutions face and the emphasis you placed on removing unnecessary barriers so that credit unions can more fully serve their members.”
He outlined CUNA’s support for H.R. 2213 and a safe harbor or hold-harmless period through Dec. 31. He also addressed CUNA’s support of five other bills: