WASHINGTON (7/31/14)--With an eye toward reducing regulatory burden on credit unions, the Credit Union National Association has sent a letter to the Consumer Financial Protection Bureau (CFPB) outlining several concerns with the bureau's proposed changes to Home Mortgage Disclosure Act (HDMA) rules. The letter is a preliminary statement from CUNA, a more detailed comment letter will be filed during the official comment period.
CUNA urged the bureau to exempt community financial institutions, including all credit unions covered under Regulation C (which implements the HMDA), from the proposed requirement for reporting Home Equity Lines of Credit (HELOCs), which is currently optional.
The letter questions the justification for the HELOC reporting requirement, noting the difficulties many credit unions will face in order to meet the requirements.
"Many credit unions treat HELOCs more like consumer loans than mortgage loans; credit union HELOCs are frequently managed on computer operating systems and platforms that are outside of the traditional mortgage loan origination systems and are separate from their first mortgage counterparts," 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."
The letter explains that since the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the CFPB to implement new data requirements, CUNA would like to work with the bureau to implement the requirements in a way that will accomplish the objectives without adding more regulatory burden.
Dodd-Frank mandates an additional 17 data fields for HDMA reporting, but the CFPB's proposal would require 37 new data fields. CUNA Associate General Counsel Jared Ihrig called the addition of so many new data fields "unwieldy and unnecessarily burdensome." (News Now July 25).
The comment period for the proposed rule is open until Oct. 22.