WASHINGTON (8/7/14)--The Credit Union National Association is seeking comment on additional reporting requirements proposed by the Consumer Financial Protection Bureau (CFPB), which would increase the burden on credit unions making home equity lines of credit (HELOCs).
The rule change would implement amendments made to the Home Mortgage Disclosure Act (HMDA) by the Dodd-Frank Act, as well as additional revisions proposed by the CFPB. The comment period is now open for the Regulation C changes.
In a recent letter to the CFPB, CUNA urged the bureau to exempt credit unions, as well as other community financial institutions, from the new additional proposed requirements in the proposed rule.
CUNA is most concerned with the proposed mandatory reporting of HELOCs, saying that "such reporting is currently optional and not required by statute."
The proposal requires credit unions to report more information on mortgage loan applications and originations, mandated by the Dodd-Frank Act--information that includes age, credit score, property value, occupancy type and more. The CFPB has also proposed to require additional reporting, including the first draw amount at account opening for HELOCs and other open-end lines of credit secured by a dwelling.
Many credit unions treat HELOCs more like consumer loans than mortgage loans, and therefore are often managed on different operating systems and platforms than traditional mortgage loan origination systems. CUNA believes this will lead many credit unions to have "extreme difficulties" providing the required HELOC data.
"The current rule already provides an option of reporting HELOC information for those institutions that have the capacity to do so," the letter reads. "To mandate reporting of all HELOCs for credit unions would be unwarranted and costly. Most important, this would be yet another requirement that would divert credit unions from actual lending or providing other needed member services."
CUNA is seeking comments on the proposed rule and will be filing a formal, detailed comment letter on the proposal before the comment period closes.
Use the first resource link below to access the CUNA letter letter. The Comment Call will be available through the second link once it is posted to the CUNA website.