Compliance Blog

Otto Van Bismarck is widely reported to have said the following:

"Laws are like sausages.  It is better not to see them being made."

That quote is not always accurate.  Especially if you watch Brad Thaler and the rest of NAFCU's lobbyist team.  The world of compliance starts on Capitol Hill, in my opinion.  Lawmakers attempt to create legislation to fix problems.  But lawmakers paint with broad brushes, and unintentional consequences do arise.

That's where lobbyists, like Brad Thaler come in.  Recently, the U.S. House Judiciary Committee began work on a bill that would, among other things, give bankruptcy judges the ability to amend the terms of certain mortgages in Chapter 13 bankruptcies.   In NAFCU's opinion, the original scope of the bill was too far-reaching.  Thaler, along with others, managed to broker a compromise between consumer groups and members of Congress to scale the bill's reach back a bit.

Now the bill, if passed into law, would expire in 7 years, and it is limited to subprime and nontraditional mortgages that are in foreclosure or are more than 60 days past-due.  Thaler has indicated that he'll continue to work to have interest-only loans included as well.  Here's a NAFCU Today article about this, which includes a fetching photo of Brad.  Here's a CU Times article on the issue.

Why do I raise this in a compliance blog?  First, Brad is my next-door neighbor at NAFCU, and his thermostat actually controls the heat in my office.  Secondly, and more importantly, lobbying and compliance are joined at the hip.  Congress passes laws that directly affect credit unions or are turned into regulation.  Once a law is on the books, for the most part, the horse is out of the barn.  Brad and the rest of our team tries to make the horse coming out of the barn be friendly to credit unions.  Or when necessary, he jams it back in and shuts the door.

Here's a link to the amended bill.