The Consumer Financial Protection Bureau (CFPB) changed the fundamental nature of how credit unions go about their day-to-day lending activities, CUNA Mutual Group’s Regulatory Compliance Manager Jon Bundy told a Discovery Session audience Wednesday.
“Credit unions have spent the past six months adjusting to the CFPB’s new mortgage rules, and they’re not done, yet,” said Bundy.
Credit unions have implemented six new mortgage rules in 2014 with a seventh mortgage rule compliance deadline looming in 2015. In total, the CFPB issued more than 6,400 pages of new regulations for credit unions to comply with.
Bundy reminded the audience that each new mortgage rule has a different scope, and that many of the new rules apply to both open-end and closed-end loans. Almost all of the new mortgage rules impact dwelling-secured transactions, including motor homes, RVs, trailers, and boats, Bundy added.
“If you do any lending secured by a dwelling, you will be impacted,” said Bundy. “And that includes small credit unions, too.”
There are very few exceptions for small creditors and small servicers, which can be confusing because there are different definitions for small creditor relief in different rules. Bundy recommended credit unions take time to read each rule carefully to ensure compliance.
“Stay focused, take time to understand the changes, and make adjustments where necessary,” he said. “Doing these things, combined with a positive outlook and understanding what you can control, will do more for your credit union than focusing on the pains of change.”
“And keep in mind, the CFPB is not done, yet,” Bundy said. “Looking at what the CFPB plans to accomplish in the next couple of years is daunting, but you have the tools to succeed as long as you start adapting now.”
Bundy advised attendees to invest time, money, and energy into developing a strategic plan and budget to navigate compliance risk and continue to implement the CFPB’s changes.
“Be an active participant with the CFPB by taking part in the comment process,” he said. “Provide real examples of the cost of compliance and impact for members, and be sure to take the long view of educating the CFPB on the value of the credit union movement. In the end it will all be worth it.”
For credit unions, the Electronic Signatures in Global and National Commerce Act of 2000 means information required to be made available can be delivered electronically, as long as the credit union complies with its requirements.
While the DOD has affirmed the Military Lending Act’s effective date for credit card accounts of Oct. 3, CUNA is engaged with legislators to build support for efforts to exempt credit unions from the rule.