Compliance Blog

On Thursday, the U.S. House of Representatives passed a bill that would overhaul how mortgages are originated - thereby greatly increasing compliance burdens for any federal credit union that does mortgage lending.  Read a House Financial Services press release about H.R. 3915 here.   Find a page that provide access to the legislation text, summaries, and more here.  Read a NAFCU Today article about the legislation here.  Here's another.  Of note: this is not law yet.  It has yet to navigate the U.S. Senate and cross President Bush's desk.  (Of note, the White House weighs in with its thoughts here, clearly indicating that it does not support the legislation's provisions that it sees as unduly restrictive.)

Of note, the legislation in its current form would:

• Lower HOEPA triggers
• Mandate the registration of mortgage originators at financial institutions, including credit unions
• Establish a "suitability" standard, whereby mortgage originators would face increased liability for making loans that ultimately are shown to be unsuitable for a particular borrower.
• Increase right of rescission powers for borrowers

This is where compliance officers can play a major role.  At times, legislators may not be aware of unintended consequences of legislation.  That is why it is important for citizens to contact their representatives to give "constructive feedback."  This NAFCU web page allows you to quickly find the names and addresses of your representatives.  (At the bottom of the page, simply enter your zip code.) If you register on the page, it even allows you to send feedback directly to your representatives. 

I urge you to review H.R. 3915, and let your Senators know whether it makes sense for your credit union.   Also, NAFCU members are free to contact NAFCU’s Legislative Affairs division at 703-522-4770 with any questions or comments.