The reality of scrambling to meet deadlines and constantly changing regulations is beginning to hit home for many compliance professionals, and is likely here to stay.
The good news is both of these regulations have established effective dates and compliance requirements to follow.
The bigger challenge in 2017 will be dealing with regulations without effective dates or stipulated requirements, such as those identified as Unfair, Deceptive and Abusive Acts or Practices (UDAAP), especially as the future of the Consumer Financial Protection Bureau (CFPB) and its supervisory power continues to be hotly debated.
For now, the CFPB still exists. That means credit unions must continue to analyze and comply with CFPB enforcement orders and determine the risk that may exist with regulatory ambiguity, particularly with what constitutes an unfair, deceptive or abusive act or practice.
UDAAP has the least clear roadmap for determining what qualifies as unfair, deceptive or abusive, yet it carries the most risk for credit unions, even those not being examined by the CFPB.
The bureau’s most recent enforcement actions give us some insight as to what it may identify as unfair, abusive or deceptive acts or practices.
Let’s look at what we learned from the CFPB’s most recent enforcement actions:
• MasterCard and UniRush. Make funds available to consumers as expected, and notify consumers when access and/or availability are disrupted.
Do not deny consumers access to their funds. Provide consumers with accurate information, in a timely manner, and with sufficient customer service availability.
• Prospect Mortgage LLC. Do not give kickbacks for mortgage business referrals, and do not try to disguise any such kickbacks as “marketing service agreements.” Both may violate the Real Estate Settlement Procedures Act and UDAAP.
• CitiMortgage Inc. and CitiFinancial Servicing. Consider requests for foreclosure relief as required under mortgage servicing regulations, and disclose the impact of deferred interest and postponing a payment due date to the consumer.
Do not send inaccurate information to credit reporting agencies or fail to investigate disputes.
• TCF National Bank. Do not trick customers into believing optional overdrafts are mandatory, and clearly disclose related fees.
These enforcement actions provide general guidance for UDAAP, such as:
1. Do what you say, say what you do.
2. Members should have access to their funds unless you tell them otherwise.
3. It is not about what you call something; it is about what you do and the actions you take.
There are plenty more lessons buried in these consent orders and enforcement actions, such as what not to name your boat (see the TCF National Bank order).
The critical task facing credit unions is taking time to analyze, determine risk, and comply even in the face of regulatory ambiguity.
CUNA Mutual Group will be holding a Regulatory Roadmap webinar on March 22. Click here for more information.