The Federal Reserve and several other regulatory agencies, NOT including the NCUA, released a proposed rule on “QRM” yesterday (not to be confused with the QM rule). You can read more about the rule here. The rule raises a lot of questions for credit unions because although not directly subject to the rule, there is concern that the rule will affect credit unions indirectly through the secondary market. We will all take some time to digest the rule and provide more information in the near future.
I also wanted to raise some additional questions that have come up during the implementation of some other rules.
1. For the remittance transfer rule, in implementing the new rule, have you considered your cut-off time for wires and making sure the cut-off time required for your credit union to submit the wire takes the 30-minute wait period into consideration? For example, if you need to provide wire information to your corporate credit union by 2:00 pm in order for the corporate credit union to send the wire that day, does your cut-off time include at least an additional 30 minutes for the wait period under the remittance transfer rule. So, you probably want your cut-off time to be 1:00 at the latest so you have time to complete the paperwork and provide the 30-minute wait period and still get the wire information to your corporate credit union before the corporate’s cu- off time.
2. If you are a credit union that has decided with the new mortgage rules that you are not going to do higher-priced mortgages, have you considered how you are actually going to do that operationally without violating any fair lending laws? So, if you decide you are not going to do higher-priced mortgages and you get an application, do the underwriting, and the pricing ends up causing the mortgage to be a higher-priced mortgage, what will you do at the point? Will you decline the loan? Will you lower the pricing? If you decline the loan or lower the pricing, you need to consider how you ensure you do not have a fair lending issue. Also, with lowering the pricing, is that then an exception to your loan policy? How do you document it?
So, I know I have more questions than answers today, but I wanted to give you a few things to think about in case all these new rules have been boring to implement. If you are looking for answers, join us in Tempe for answers on marketing compliance. We’ll be conducting a workshop for CUNA to discuss the rules for advertisements, websites and other collateral materials.