Compliance Blog

Written by Steve Van Beek

You've probably heard the rumors that the first of the CFPB's mortgage regulations are expected to be released today. In anticipation of this, NAFCU sent another comment letter to the CFPB encouraging flexibility with regard to effective dates: 

"NAFCU believes that the CFPB does have the discretionary authority to provide much longer than the publically stated 12 months for one or more of the final rules. While we understand that Title XIV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provides a set effective date for the agency’s “qualified mortgages,” the CFPB can assert its greater discretionary rulemaking, examination and supervisory authorities to determine that 12 months is an inadequate period for financial institutions to effectively implement the regulations. In fact, NAFCU believes that this short period could lead many financial institutions to improperly implement the regulations, thus diminishing the statutory purposes underlying the regulations.

Alternatively, the CFPB could use its broad authority to consider the regulatory burden on small entities and provide an extended effective date for all credit unions. As we have stated on numerous occasions, Congress granted the CFPB this authority with the understanding that small entities will be disproportionately affected by the agency’s extensive regulations issued pursuant to the Dodd-Frank Act. NAFCU believes that the issue of the effective dates of these rules is well within the scope of the agency’s discretionary authority related to small entities."

We hope the CFPB will seriously consider the differences between the big banks and nonbank mortgage lenders on one hand and credit unions and community banks on the other.  Both in terms of whose actions lead to Dodd-Frank and which should have the obligation to restructure their entire mortgage operations within a short period of time.  

***

Field Hearings.  Today marks the first of two planned Field Hearings on mortgages that were announced by the CFPB.  Today's hearing will be at 11 a.m. in Baltimore, Maryland (at Westminster Hall and Burying Ground).  The second will be January 17th in Atlanta, Georgia (hopefully at a less foreboding location).  According to the announcements, each field hearing will feature remarks from CFPB Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.   

Additionally, if the past is any indicator - the CFPB will be announcing their final rules either prior to the field hearings or directly following the hearings.  Stay tuned.

*** Update ***

Qualified Mortgage Final Rule - (Updated at 7:00 a.m. on 01/10/13).  Early this morning (12:01 a.m.), the CFPB announced it has finalized the qualified mortgages regulation.  This is also known as the ability-to-repay mortgage rule.  You can find information on the final rule below.

• Summary of the Ability-To-Repay Rule (and Concurrent Proposal)
• Fact Sheet on the Ability-To-Repay Rule (Full Title is:  Protecting Consumers from Irresponsible Mortgage Lending)
• Press Release on Ability-To-Repay
• CFPB Director Cordray's Prepared Remarks

In true CFPB fashion, the actual regulation isn't available yet - but will be posted on their regulations page later today.  An interesting way to control the news reporting, isn't it?  Give out just the highlights from the CFPB's perspective and don't release the details.  By the time the details (and the associated burdens) come out, the CFPB's message is already out and through the news cycle.  

For more, check out the NAFCU Today.  Of course, NAFCU's Regulatory Affairs team will be preparing a Final Regulation for NAFCU memebers. 

***

NAFCU's Regulatory Compliance School.  Just a reminder that the early bird deadline for registering for NAFCU's 2013 Regulatory Compliance School ends tomorrow - January 11th.  Register by COB tomorrow and Save $100.  

Don't Forget:  Use promo code "NEWYEAR" when you register for School, Seminar or any of NAFCU's 2013 Conferences and save an additional $100.  Register by January 31st to Save.