FOR IMMEDIATE RELEASE
Contact: Zan McKelway CUNA Communications 202 508 6701
WASHINGTON, D.C. (March 22, 2016) -- The Credit Union National Association (CUNA) applauds the Consumer Financial Protection Bureau (CFPB) and Director Richard Cordray for today's action to expand the ability for credit unions and other small creditors to provide much-needed services in rural communities and other underserved areas.
"This is an important win for credit unions and consumers alike," CUNA President/CEO Jim Nussle declared Tuesday. "The rule reduces the burden of recent CFPB mortgage lending rules on more credit unions, and these member-owned, community-based financial institutions will be able to provide more credit to consumers in rural and underserved areas. Our thanks to Director Cordray for getting this needed change into the rulebook quickly."
The approved statutory change, which takes effect March 31, implements the Helping Expand Lending Practices in Rural Communities (HELP) Act, which was passed by Congress and signed into law by President Obama last year with the Fixing America's Surface Transportation Act.
Both before and after Congress passed the HELP Act, CUNA strongly urged the CFPB to strike the word “predominately” from its discretionary exemption authority in Regulation Z regarding mortgage rules for lenders operating in rural and underserved areas.
The interim final rule, which is still subject to a 30-day comment period after the CFPB publishes it in the Federal Register, will benefit consumers and encourage lending in rural and underserved areas. But the CFPB should go even further.
Allowing any mortgage loan held on a credit union's balance sheet, regardless of any other threshold, to qualify as a QM loan would provide even more relief. CUNA maintains that treating loans that remain on a financial institution's balance sheet as QM loans is appropriate, as the lender assumes the entirety of the risk, and is subject to all applicable safety and soundness supervisions from regulators.