Compliance Blog

Written by Steve Van Beek

This week we've been discussing the possibility of sending electronic mortgage periodic statements.  There are also quite a few other issues related to mortgage statements that credit unions need to be ready for.  One, in particular, is whether or not combined statements are a viable option after the mortgage servicing proposals are finalized.

The issue with combined statements comes down to timing.  In fact, this issue was brought up by credit unions prior to the proposed rule and the CFPB solicited comments:

"Based on industry outreach, the Bureau understands that some institutions provide a combined statement for mortgage loans and other financial products. For example if a consumer has both a checking account and a mortgage with a credit union, the consumer may receive a single combined statement. The Bureau seeks comment on how servicers would actually combine statements. In particular, the Bureau notes that difficulties may arise when different disclosures have different timing requirements, and when multiple disclosures have requirements that information be presented on the first page of the statement. For example, if both mortgage loan disclosures and credit card disclosures are required to be on the first page of a statement, how would these statements be combined?"

Of course, NAFCU addressed this issue in our comment letter and asked the CFPB for flexibility so that credit unions would not be required to drastically change their current business practice given the fact that the benefit to members was not proven.

"The timing requirements of the proposed periodic statements will pose tremendous problems for both credit unions and their members. For example, many credit unions service mortgages with due dates throughout the month, and would have to mail statements each day in order to comply with the proposed requirement that a statement be sent within 4 days after the close of the grace period of the previous cycle.

Many credit unions currently provide combined statements at the beginning of each month. The combined statements contain a vast majority of the information that the proposed periodic statement contains. Borrowers are not only used to this format, but prefer it because they are not receiving multiple statements from their credit union throughout the month, but rather, a single combined statement that contains information about their loan, checking, share (savings) and other appropriate accounts. The proposed timing requirements would make this tried and true credit union practice virtually impossible to continue. Accordingly, NAFCU strongly urges the agency to carve out exceptions from the proposed timing and other requirements that would allow credit unions to provide combined statements, and provide a sample form of such combined statement. As the CFPB finalizes the rule, it should reach out to credit unions that currently provide combined statements to construct its final rule and NAFCU would be pleased to assist the agency in this endeavor."

If your credit union currently provides mortgage information on your other statements, be sure to keep an eye on this issue when the final rule comes out.  

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Member Call-In.  NAFCU’s last member-only call-in of the year will take place December 6, 2012 at 3:30 p.m. (EST). Join NAFCU President and CEO Fred Becker and senior staff for an important briefing on current legislative developments and regulatory challenges affecting credit unions.