Written by JiJi Bahhur, Director of Regulatory Compliance
With several of the new mortgage rules set to go into effect tomorrow, including ability-to-repay and qualified mortgages, the NAFCU compliance team wanted to take a moment to reach out to those that have been tirelessly involved in implementing compliance programs to address the numerously burdensome changes. It has been a long, hard (and of course expensive) journey, and unfortunately, it’s not over.
We have heard that there are credit unions (or really, in many cases, their vendors) that aren’t going to be ready by tomorrow. As scary as this can be, the credit union still has a leg to stand on: the CFPB and NCUA have both assured credit unions that good faith efforts of compliance will be acceptable in the early months after the new rules become effective.
More specifically, CFPB Director Richard Cordray has said that the agency is seeking “good faith efforts of substantial compliance” in the first few months. Echoing the same sentiment, NCUA wrote, in Letter to Credit Unions 14-CU-01, that “[a]s with any new requirement in its early stages after becoming effective, NCUA field staff will take into account a credit union’s good-faith efforts to comply with the new rule.”
Having this leg to stand on is indeed comforting, but only time will tell how this will pan out with the examiners of each agency. As many credit unions have encountered in the past, examiners from different agencies, or even individual examiners within the same agency, are not always on the same page, especially where there isn’t a detailed definition of “good faith efforts of substantial compliance” available.
NAFCU has been here to assist you with these upcoming rules and will continue to do so, both through our advocacy with the agencies and through numerous compliance resources that NAFCU has authored. To help with complying with these mortgage changes, all of NAFCU’s resources on the new mortgage rules, including Scope & Applicability Charts, articles, blog posts, webcasts and consolidated regulatory text can be found on our special mortgage resources webpage. And, here are links to articles on various aspects of the mortgage rules that appeared in the Compliance Monitor in the last several months (available with NAFCU login):
- Qualified Mortgages Without the 43 Percent Debt-to-Income Ratio Requirement
- Mortgage Servicing: Error Resolution& Information Request Processing,
- Small Creditor Portfolio Exemption for QMs Explained,
- Understanding the Qualified Mortgage Quagmire,
- New Appraisal Requirements: Regulation B and Higher-Priced Mortgage Loans,
- Mortgage Loan Originator Requirements,
- New Homeownership Counseling Disclosure Requirement, and
- Escrow Requirements for Higher-Priced Mortgage Loans.
Also, to help make researching on the blog a little easier, we created blog categories for mortgage reform posts. The categories are:
- Mortgage Reform – Appraisals,
- Mortgage Reform – Escrow,
- Mortgage Reform – HOEPA/High-Cost,
- Mortgage Reform – Loan Originator,
- Mortgage Reform – Qualified Mortgages; and
- Mortgage Reform – Servicing.
Other NAFCU resources available to assist with the mortgage rules include:
- NAFCU’s Regulatory Compliance School
- NAFCU’s Regulatory Compliance Seminar
- NAFCU’s Online Learning options, including its unlimited webcast subscription.
The CFPB also has numerous resources for complying with the mortgage rules, including a central page for their mortgage rule implementation resources. This page includes compliance guides, videos and other resources. Additionally, NCUA issued a regulatory alert and supervisory letter to examiners that both provide general guidance for credit unions to comply with the CFPB’s ability-to-repay/qualified mortgage rule for all loan applications received on or after Jan. 10. NCUA also issued a regulatory alert on mortgage servicing and a regulatory alert on homeownership counseling requirements.
NAFCU’s Compliance Team. You may have noticed some new names on the blog. NAFCU’s compliance team has made some additions in an effort to continue to provide our members with valuable, timely compliance information. We’d like to take this opportunity to say thank you for being dedicated readers of our blog. We aspire to provide you with materials that will assist you with your day-to-day needs.