HELP implementation a victory for CUs, underserved

April 21, 2016

The Credit Union National Association (CUNA) applauds the Consumer Financial Protection Bureau (CFPB) for moving quickly to implement the Helping Expand Lending Practices in Rural Communities (HELP) Act. The rule, which became effective March 31, represents a victory for credit unions, and as mentioned in a letter sent to the CFPB Thursday, will help credit unions provide more credit to consumers in rural and underserved areas.

“Thank you for making these changes to the Regulation Z mortgage rules, which will allow more consumers to achieve the American dream of home ownership,” reads CUNA’s letter. “CUNA believes this interim final rule is an excellent example of how exemptions to regulatory requirements can be provided for responsible lenders such as credit unions, and we look forward to future efforts by the CFPB to focus its rulemakings on the problem actors in the industry.”

CUNA’s 360-degree advocacy was deployed through a number of channels to inform the CFPB of the credit union perspective and the need for reduced regulatory burden. CUNA’s legislative advocacy efforts led to the highway funding bill that includes the HELP Act being signed into law, and once passed, CUNA’s regulatory advocacy informed the CFPB of needed changes.

Specific CUNA-advocated changes include:

  • Credit unions only need one covered transaction originated in a rural or underserved area to qualify for the small creditor exemption. CUNA pushed for this threshold specifically, and though the CFPB could have chosen any numbers up to 49% of covered transactions, it chose CUNA’s advocated position;
  • More credit unions are allowed to originate high-cost mortgages with balloon payments under the CFPB’s Home Ownership and Equity Protection Act regulations;
  • Credit unions are no longer required to establish escrow accounts for higher-priced mortgages if they satisfy the other exemption criteria.

More details are available at CUNA’s Removing Barriers Blog.

In its comment letter, CUNA also suggested that the CFPB give serious consideration to making all loans held in portfolio count as Qualified Mortgages. CUNA has also backed legislation to this end, both the Financial Regulatory Improvement Act of 2015 (S. 1484) and the Portfolio Lending and Mortgage Access Act (H.R. 1210).