Compliance Blog

Written by JiJi Bahhur, Director of Regulatory Compliance

NCUA December Board Meeting Results.  This past Thursday, the NCUA Board held its December Board meeting.  The agenda for the open meeting included the following action items:

1. Board Briefing, Supplemental Interagency Rule, Appraisals for Higher-Priced Mortgage Loans;
2. 2014 Temporary Corporate Credit Union Stabilization Fund Oversight Budget;
3. Final Rule, Part 700, 701, and 704, Technical Amendments, Corporate Credit Union Rating System;
4. Proposed Rule, Part 701, Requirements for Federal Credit Union Examination Sites; and
5. Final Rule, Parts 703 and 721, Charitable Donation Accounts.

All actions were approved.  I won’t go into detail on each of these actions in this blog post, but you can find the details here in NCUA’s Board Action Bulletin.   

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HPML Appraisal Supplementary Rule Finalized.  During NCUA’s December Board Meeting, the last of the lingering mortgage rule amendments finalized.  More specifically, the Interagency Proposed Supplemental Rule on the HPML Appraisal Requirements finalized.  This supplements the HPML Final Rule that was issued in January, 2013, and goes into effect at the same time as the original final rule on January 18, 2014.

As background, under the January 2013 final rule, credit unions extending higher-priced mortgage loans must obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals and give applicants a copy of the written appraisals used for certain mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage. 

The supplemental final rule provides exemptions from the requirements to:  (1) transactions secured by existing manufactured homes and not land; (2) certain streamlined refinancings; and (3) transactions of $25,000 or less. 

Also, the rule requires credit unions to provide notice to the borrower within three business days after receiving application that states, generally, that the credit union may order an appraisal for which the borrower may be charged.  The proposal defined “business day” to only exclude Sundays and legal holidays, but NCUA heeded the advice of NAFCU and finalized the supplemental rule to also exclude Saturdays from the “business day” definition for the purpose of providing the notice required after receiving an application.  NAFCU is appreciative of this outcome as it will provide added flexibility to those credit unions whose back office operations are not open on Saturdays.

You can view the final HPML Appraisal Interagency Supplemental Rule here.

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NAFCU Webcast – Managing Third Party Fair Lending Risk.  You may be following the fair lending regulations “to the letter,” but what about your vendors?  If you utilize vendors for indirect lending, mortgage services, marketing or other services, you won’t want to miss NAFCU’s webcast – Managing Third Party Fair Lending Risk: Don’t Let Your Vendors Let You Down.  The webcast will take place on January 13, 2013 at 2:00pm Eastern time.  Register by January 6, 2014 and receive $100 off.  For details on this webcast, click here.