Special Report: America's CU Conference

Get the Lending Lowdown

Deluge of lending regulations takes its toll on CUs.

June 22, 2011

Regulations for lenders are seemingly endless, making it challenging for credit unions to stay on top of the continuous changes. During a Discovery breakout session Tuesday at the America’s Credit Union Conference, Bill Klewin told credit union leaders how they can prepare themselves and their employees for the next wave of regulations.

“Regulatory compliance is a major issue for credit unions to manage, especially when the rules keep changing,” says Klewin, CUNA Mutual Group’s director of regulatory compliance. “Because the rules are complex and lengthy, credit unions must plan effectively for the risks.”

Klewin reminded the audience of “the deluge of laws” hitting financial institutions during the past few years, including:

  • SAFE Act of 2008;
  • Credit Card Accountability, Responsibility, and Disclosure Act of 2009;
  • Mortgage Disclosure Improvement Act;
  • Dodd-Frank Wall Street Reform and Consumer Protection Act;
  • Unfair and Deceptive Acts and Practice Rules;
  • Real Estate Settlement Procedures Act;
  • Department of Defense Rules;
  • Servicemembers’ Civil Relief Act; and
  • Private Student Loans.

In addition to the plethora of new laws, credit unions are also subject to regulations regarding truth-in-lending (Regulation Z), consumer leasing (Reg M), equal credit opportunity (Reg B) and the Fair Credit Reporting Act.

“Reg Z was once a relatively stable regulation,” Klewin notes. “Not anymore. It’s become a catch-all for anything remotely related to lending, making compliance a challenge for every lender.”

Klewin took the audience through the many changes and additions to Reg Z that directly affect lending regulations, reminding them that putting their heads in the sand isn’t a good strategy.

“The complexity and depth of the compliance changes will tax your staff and will be expensive, so the news isn’t good,” he says. “You need to plan long-term to deal with all the changes and uncertainty. But because compliance is a priority, you must understand the risks.”