NAFCU Compliance Blog

NCUA Report: Q&A with Director of NCUA's Office of Consumer Protection; Free NAFCU Webcast

Written by Steve Van Beek

Last Friday, I blogged about the 2013 HMDA Getting it Right! Guide. The importance of accurate HMDA data was also emphasized in the April 2013 NCUA Report. The newsletter includes a Q&A with Gail Laster, Director of NCUA's Office of Consumer Protection - including these two Q&As:

"Q: What are some of the major fair lending compliance issues you are seeing?

A: One major fair lending compliance issue that we're seeing involves the quality of Home Mortgage Disclosure Act (HMDA) reports. HMDA data serves an important purpose for [NCUA's] fair lending examiners and the public. It lets us confirm that all Americans are getting equal access to credit to help them fulfill one of our fundamental rights - the right to own property.

To address the data quality issue, we hosted a webinar in January that explained the process for submitting HMDA data and reviewed some of the most common errors credit unions make when completing the HMDA reports. [The webinar is available here]. 

Q: Can these kinds of data errors raise red flags?

A: Although we find most data reporting errors are unintentional, there are cases where the errors are symptoms of other weaknesses in lending processes or internal controls. Poor HMDA reporting can raise concerns about compliance with disclosure requirements associated with mortgage loan applications. It also makes it difficult to evaluate whether a financial institution is complying with fair lending laws.

Poor HMDA data is also an indicator of a lack of due diligence or a need for more training on the collection of mortgage loan application data or reporting procedures."

You can view the full Q&A here.

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Free NAFCU Webcast.  On May 8th, NAFCU will be hosting a free webcast on NCUA's Office of Consumer Protection: Function, Role and Objectives. NCUA's Director of the Office of Consumer Protection, Gail Laster will be presenting alongside Tonya Sweat, Director of Consumer Compliance Policy & Outreach in NCUA's Office of Consumer Protection. By viewing the webcast, you'll:

• Learn about the OCP initiatives in consumer compliance and fair lending;
• Understand the office’s vision and objectives; and
• Get an analysis of the interagency activities designed to help credit unions implement the regulations issued by the CFPB.

And, best of all - the webcast is free to ALL CREDIT UNIONS.  You can sign up here.

2013 HMDA Getting it Right Guide; New NAFCU Calendar; Reg Alert on Escrow Proposal

Written by Steve Van Beek

2013 HMDA Guide. Yesterday, the Federal Financial Institution Examination Council (FFIEC) issued the 2013 HMDA Getting it Right! guide. According to the main page:

"The 2013 edition reflects the transfer of authority over Regulation C from the Federal Reserve Board to the Consumer Financial Protection Bureau. Appendix D, comment 1003.2 (Financial Institution)-2 is updated with the asset-size threshold exemption applicable to collection of 2013 data. There are also minor changes to the general text of the Guide, including updates to Sources of Geographic Information and Submitting the LAR."

You can find the full PDF of the 2013 Guide here.  

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Long Time Coming. Now, you may be wondering when the last version of the Guide was issued?  2010.  The 2011 version would have been the lame duck one when the Federal Reserve still had authority for Regulation C (HMDA). However, there was no guide issued. On July 21, 2011, the CFPB took over Regulation C and they failed to release a guide in 2012.  Fortunately, in year two, the CFPB found the time to update the Guide and provide guidance to HMDA-reporting institutions.

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Garbage In, Garbage Out? The CFPB is a self-described "data-driven" agency. If you doubt it, take a read through this Bloomberg.com story: U.S. Amasses Data on 10 Million Consumers as Banks Object. To me, if you want to be data-driven - the best first step is to make sure your regulatory requirements are clear and understandable so that the data you collect (whether it be consumer complaints, HMDA data, or anything else) is as reliable as possible. But, that's just me.  

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NAFCU Calendar.  NAFCU has a new calendar on our website that features:

• Compliance Deadlines;

• Important Regulatory Dates;

• Education & Conferences;

• CU Research Survey Deadlines; and

• Other Important Dates.

The calendar allows you to navigate month-by-month, click to find more information and add dates to your own calendar. For example, the "more information" link on the June 1st Escrow Changes Deadline includes this information:

CFPB Compliance Deadline: Escrow Requirement

Description:

Amended escrow requirements for higher-priced mortgage loans. Added a new small creditor exemption for credit unions that meet a four-part test.

Regulatory Text: 12 CFR 1026.35

NAFCU Compliance Blog: Mortgage Reform - Escrows

NAFCU Resources: www.nafcu.org/mortgagerules/#escrow

Download the latest full Compliance Calendar, including proposed regulations, past deadlines and more.

Date:Jun 01, 2013    

Add to Calendar                                             Back to Calendar

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NAFCU Members. The Mortgage Rules webpage includes NAFCU's Regulatory Alert on the CFPB's recent proposed rule. The proposal was published in the Federal Register yesterday and only provided 15-days for comments (comments to NAFCU on the Regulatory Alert are due on Wednesday, April 24).  

NCUA Fair Lending Webinar; Additional Research Tip - Internet Explorer

Written by Steve Van Beek

Note: NAFCU's compliance team will be out of the office the next two days at a training conference in DC. NAFCU members, if you have a compliance question - the best way to contact us via email: compliance@nafcu.org. Keep in mind our responses will be delayed a little longer than usual.

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NCUA Fair Lending Webinar. Today is NCUA's free Fair Lending Webinar. You can sign-up for the webinar here. The announcement is located here. The webinar is today at 1 p.m. - register here.

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Yesterday, I blogged about saving certain blog posts to your desktop. I used Chrome as my browser but the same process works for Mozilla Firefox. For Internet Explorer, the instructions are below along with screenshots.

Saving Important Blog Posts to Your Desktop - Internet Explorer.

1. Click on the Title of the blog post to be taken directly to the blog post site.

2. After clicking the Title, you'll be taken to the blog's main webpage - showing the blog post you clicked on. Your screen should look similar to below.

3. On this page, right click and choose "Create Shortcut" and choose Yes to the question of whether you want to create a "shortcut to this website on your desktop."

4. Go to your Desktop and look for the new shortcut. You should see something similar to below.  Double-click on this shortcut and you'll be taken directly to the blog post on the internet.

Using Internet Explorer, there is a direct shortcut created rather than the separate files stored locally on your desktop. Both work and should help ensure you have quick access to important blog posts to increase your efficiency when researching the new mortgage regulations.

NAFCU's Regulatory Compliance School Just Got Better - Regulatory Update Day

Written by Steve Van Beek

We've heard you!  For the past couple of years, we've received the following feedback about NAFCU's Regulatory Compliance School (paraphrased, of course):

"School is great and provided a solid foundation for understanding the regulatory requirements credit unions face on a daily basis.  BUT, the rules are changing so fast that it would be great to receive updates on what has just changed and what is changing next."

With this in mind, we've created Regulatory Update Day at NAFCU's 2013 Regulatory Compliance School (March 18-23 in National Harbor, Maryland).  

Regulatory Update Day (Thursday, March 21st) will provide:

• A clear understanding of what changes NCUA has in store for 2013 – including their Exam Focus

• An overview of the scope and applicability of the CFPB’s seven new mortgage regulations*

• A detailed look at the CFPB’s Qualified Mortgage/Ability-to-Repay requirements*

• Answers to Frequently Asked Questions on the mortgage rules from NAFCU’s compliance team*

• Insight from credit union attorneys and practitioners on how best to set up your implementation strategy

You can find more information on Regulatory Update Day here.  The three sessions with the "*" are sessions that are also part of NAFCU's Mortgage Reform Webcast Series.

The other 4 days of Compliance School will remain the same as will the opportunity to take the NAFCU Certified Compliance Officer (NCCO) exams.  Good luck!  

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And, all attendees at NAFCU's 2013 Regulatory Compliance School will receive NAFCU's 2013 GPS (coming soon!) as well as NAFCU's Scope & Applicability Charts.

Remember:  You do not need to be a NAFCU member credit union to attend NAFCU's conferences or webcasts.  In fact, you don't even need to work at a credit union.  Each School usually features a handful of consultants, vendors and other credit union "peeps" who support credit unions - in one way or another - on a daily basis.      

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Remittances Webinar; Fair Lending Webinar; Archived Nonaccrual/TDR Webinar

Written by Steve Van Beek

Remittances.  The CFPB recently opened their Remittances Webinar to everyone - without the need to register (the webinar is free).  The webinar will be available on this page beginning at 2:30 p.m. Eastern.  The webinar will last 90 minutes.

That is TODAY at 2:30 p.m. Eastern.  Be sure to tune in.    

NOTE - The CFPB issued their small entity compliance guide yesterday.  

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Fair Lending.  The Philadelphia Federal Reserve's Consumer Compliance Outlook will be hosting a Fair Lending Webinar tomorrow - October 17th from 2:00 - 3:30 p.m. Eastern.  You can register here.   

The presentation slides are already available here.  Topics to be discussed are:

• Recent Fair Lending Enforcement Actions
• Risk Assessments
• Fair Lending Compliance Management
• Data Reporting and Analysis
• FHA LGBT Rule, Disability Discrimination, Maternity Leave Discrimination
• Loss Mitigation and Loan Modification
• Redlining

Remember - TOMORROW at 2:00 p.m. Eastern.  Register here.   

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Nonaccrual and TDR Webinar.  NCUA's webinar on Workouts, Nonaccrual and TDRs is now archived and available.  The webinar can be watched here.  A transcript is also available inside the webinar (or at this link).       

Upcoming Webinars and Webcasts; NAFCU's October Compliance Monitor

Written by Steve Van Beek

Webinars and Webcasts.  There are quite a few free webinars to keep on your radar:

• October 4 at 3:00 p.m. EDT - Town Hall with Chairman Matz - Registration is Still Open

• October 16 at 2:30 p.m. EDT - New Requirements for Remittance Transfer Providers - Sign-Up by sending an email to CFPB_RemittanceRule@cfpb.gov by October 9.  If you have a question you'd like answered during the webinar - send it to CFPB_RemittanceRule@cfpb.gov by October 5.  

• October 17 at 2:00 p.m. EDT - Fair Lending Hot Topics by the Philadelphia Federal Reserve's Consumer Compliance Outlook

• Archived:  Servicemember Financial Protection (Compliance with the SCRA) - Slides are here.

NAFCU also has a couple of upcoming webcasts that might be of interest:

• October 10 - BSA/OFAC for Directors and Supervisory Committee  - Keep in mind that you can watch the archived webcast for up to one year - making this perfect for a future Board meeting or training event.  Sign up by October 3 and Save $100.  

• October 24 - Social Media and Website Compliance - This webcast will also be viewed live by all Regulatory Compliance Seminar attendees.  Sign up by October 17 and Save $100.  

• November 7 - CFPB's Latest Mortgage Proposals - NAFCU's Compliance team will overview the mortgage loan originator proposal, interagency higher-risk appraisal proposal and the Regulation B appraisal proposal.  Sign up by October 31 and Save $100.    

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NAFCU's October Compliance Monitor.  NAFCU Members: Our October Compliance Monitor is now available for download.  This issue includes lengthy articles on the "high-cost" mortgage proposal (including a discussion of the potential change to the definition of "finance charge") and the CFPB's mortgage servicing proposals.  We've also attached a six-page chart which helps organize the 20 new notices included in the mortgage servicing proposals.  Happy reading!

CFPB Releases Semiannual Regulatory Agenda - Spring 2012; Seminar in Seattle

Written by Steve Van Beek

CFPB Regulatory Agenda.  Yesterday, the CFPB posted its Semiannual Regulatory Agenda - for spring 2012.  The previous Semiannual Regulatory Agenda was released in February 2012.  The latest release follows the same format and includes a listing of regulations in the various rulemaking stages: prerule stage, proposed rule stage, final rule stage, long-term actions and completed actions.  

Below is a listing of the various future regulations - organized by rulemaking stage.  Keep in mind the agenda is current as of April 13, 2012 and the CFPB has taken numerous actions since putting this agenda together.    

Prerule Stage:

• Registration of Certain Nonbank Covered Persons
• Supervision of Larger Depository Institutions and Affiliates
• Home Mortgage Disclosure Act (Regulation C)
• Requirements for Prepaid Cards (Regulation E) 

Proposed Stage:

• Amendments to TILA and FIRREA Concerning Appraisals
• Disclosure Rules and Substantive Protection for Certain High Cost Mortgage Loans (Regulation Z)** (proposed on July 9th)
• Mortgage Originator Standards (Regulation Z)
• Mortgage Servicing (Regulation X; Regulation Z)
• TILA/RESPA Mortgage Disclosure Integration (Regulation X; Regulation Z)** (proposed on July 9th)
• Credit Card Pre-Opening Account Fees (Regulation Z)
• Procedural Rule To Establish Supervisory Authority Over Certain Nonbank Covered Persons Based on Risk Determination
• Supervision of Certain Nonbank Covered Persons—Defining Larger Participants in Certain Consumer Financial Product and Service Markets (LP 2) 
• Copies of Appraisals or Other Valuations To Be Furnished by Creditor (Regulation B)

Final Rule Stage:

• Supervision of Certain Nonbank Covered Persons—Defining Larger Participants in Certain Consumer Financial Product and Service Markets (LP 1)** (finalized on July 16th)
• Disclosure of Records and Information
• State Official Notification Rule
• Rules Relating to Investigations
• Rules of Practice for Adjudication Proceedings
• Restatement of Federal Consumer Financial Law Regulations
• Requirements for Escrow Accounts (Regulation Z)
• TILA Ability to Repay (Regulation Z)
• Confidential Treatment of Privileged Information
• Disclosure Rules for Remittance Transactions (Regulation E)

Long-Term Actions:

• Alternative Mortgage Transaction Parity (Regulation D)
• Business Lending Data (Regulation B)
• TILA Mortgage Amendments (Regulation Z) 

Completed Actions: 

• Disclosure Rules for Remittance Transactions (Regulation E)

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Only 27 potential rulemakings!!  The Regulatory Agenda also includes a short summary of each rulemaking that is useful for providing a quick overview of what will be covered by the rulemaking.  However, as last Monday's proposed rules show - a short summary doesn't do much when the proposals are 1099 pages and 293 pages.  

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NAFCU's 2012 Regulatory Compliance Seminar.  Luckily, you don't have to read and understand all 27 potential rulemakings on your own.  We'll be covering quite a few of them at our 2012 Regulatory Compliance Seminar in Seattle, Washington - October 23-26.

The program-at-a-glance is available here (and we'll be including additional sessions as the proposals continue to flow).  We already have a session on the TILA/RESPA mortgage disclosures, the upcoming mortgage servicing proposal (including the periodic statement requirement) as well as a session on the remittances final rule.  Detailed session descriptions can be found here.

Remember - you do not need to be a NAFCU member to attend.  And, Save $100 if you Register by August 31st!

Consumer Compliance Resources; NAFCU’s Comment Deadline for NCUA’s 2012 Review

Written By JiJi Bahhur, Regulatory Compliance Counsel

I don’t know about you all, but the break in the middle of the week for Independence Day just made me want the weekend to come even faster!  And so here we are…it’s finally Friday.  Let’s keep it simple but informative today. 

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Consumer Compliance Resources.  As Steve mentioned in a blog post earlier this week, the Federal Reserve's 2nd Quarter Consumer Compliance Outlook is now available.  There are some really great articles in this issue, but I wanted to point you to the very handy section called Consumer Compliance Resources.  This particular page of the Consumer Compliance Outlook gives you the ability to link to very valuable consumer compliance resources – a Compliance Officer’s dream come true! 

Give it a try!  The page provides updated links to an array of resources, including but not limited to:

• CFPB’s Official Website (plus 7 other related links)
• Dodd-Frank Act (plus 3 other related links)
• Federal Reserve’s Consumer Compliance Handbook
• FFIEC Guidance on Electronic Banking
• Payment Cards Center
• Regulation B (plus 13 other Fair Lending-related links)
• Reg C/HMDA (plus 5 other related links)
• Reg E/EFTA (plus 2 other related links)
• SCRA (plus 6 other related links)

And it goes on and on.  It wouldn't be a bad idea to save that resource page in your favorites. 

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NAFCU’s Comment Deadline for NCUA’s 2012 Review.  Today is the deadline for submitting comments to NAFCU on our Regulatory Alert regarding NCUA’s 2012 review of its regulations.  Comments can be submitted by answering the questions in the Regulatory Alert (accessible to members only) or you can send an email to Tessema Tefferi, Regulatory Affairs Counsel, at tttefferi@nafcu.org.

Fair Lending FAQs - Future HMDA Changes; NAFCU Member Call-In

Written by Michael Coleman, Regulatory Compliance Counsel

The Federal Reserve’s Consumer Compliance Outlook for the First Quarter 2012 contained a section on the most frequently asked questions from the Federal Reserve Board’s November 2, 2011, webinar entitled “Fair Lending Issues and Hot Topics.” Question #7 focused on how Dodd-Frank changed HMDA requirements and indicated that Section 1094 of Dodd-Frank amended HMDA to require financial institutions to collect and report new data for mortgage loans in the future.  The new data will include:

• Origination channel (retail, broker, or other)
• Applicant's age
• Applicant's credit score
• Property value
• Loan term
• Term (in months) of any introductory interest rate period
• Rate spread for all loans
• Total points and fees payable at origination
• Term (in months) of any prepayment penalty
• Negative amortization
• Loan originator unique identifier, universal loan identifier, and parcel loan number (as the CFPB may determine appropriate)

Dodd-Frank transferred authority over HMDA and Regulation C to the CFPB. The CFPB has not yet issued rules to implement the changes to HMDA and revise Regulation C, nor did it specifically mention the rule revising Regulation C in its "Semi-Annual Regulatory Agenda." However, the CFPB's Agency Rule List indicates that revisions to Regulation C are in the “prerule” stage.

Note: Dodd-Frank did not mandate a deadline for a final rule, but keep this issue on your radar, as we'll see amendments to HMDA at some point in the future.

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Free Member Call-In.  On Thursday, June 14 at 3:30 p.m. EDT, NAFCU will hold its mid-year Member Call-In.  The call is open to all NAFCU members but registration is required.  The call will feature NAFCU President and CEO Fred Becker and the association's government affairs team discussing latest developments in Washington affecting credit unions, including MBL, overdrafts, interchange, housing finance reform, CFPB, NCUA and more.  As always, you will have the ability to ask questions directly to NAFCU staff during the call.  

Don't miss out - register now for the June 14th NAFCU Member Call-In.  If you can't make the live call, the archived version is usually made available within a short period of time.  

Qualified Mortgages; Flood; Compliance Monitor; Fair Lending Webinars

Written by Steve Van Beek

Below are just a few quick items for your Friday - have a great weekend!

Qualified Mortgages.  The Consumer Financial Protection Bureau has reopened the comment period for their Qualified Mortgage rule (also known as the Ability-to-Repay rule).  The new comment period ends on July 9, 2012.  It had been expected that the CFPB would finalize this rule in early 2012 but it kept getting pushed back - with good reason as this rule has the potential to significantly alter the mortgage market - and now looks like it will be late 2012 before a final rule.  Dodd-Frank requires the rule in place by January 2013.  The CFPB's notice regarding the extended comment period is here. 

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Flood.  A 2-month extension was passed and then signed by President Obama.  This extends the National Flood Insurance Program (NFIP) through July.

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NAFCU's Compliance Monitor.  Our June 2012 issue of NAFCU's Compliance Monitor is now available for download by NAFCU members.  This month the articles focus on Reporting Interest Payments to Nonresident Aliens as well as the increased Focus on Fair Lending.

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Fair Lending Webinars.  The Federal Reserve's Consumer Outlook Live series is hosting a June 21st webinar on 2010 Census Data - What it Means for CRA, HMDA and Fair Lending Compliance.  The webinar is free and follows on the heels of their November 2, 2011 - Fair Lending Issues and Hot Topics webinar (archived version available).