If you remember last summer, NCUA’s Office of Consumer Protection notified over 1000 federal credit unions across the country of their eligibility for low income designation. NCUA’s initiative was in part due to President Obama’s relief and recovery package to help drought stricken states across the country. Many of you accepted the designation; however, do you truly understand the grant opportunities available as a low income designated credit union?
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The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to purchase only qualified mortgages as of January 10, 2014.
For those of us that follow the secondary mortgage market and compliance regulations, this shouldn’t be much of a surprise. The new CFPB rule allows for loans to be underwritten as either a qualified mortgage, or using the ability-to-repay factors, however it is clear that the secondary mortgage market is leaning towards the qualified mortgage option. This is likely due to future rulemakings which I won’t go into at this time… just be aware that this isn’t the last we will hear of this rule. The rule will guide the mortgage markets going forward, as additional rules build upon this recent one.
Need an example of the implied preference for qualified mortgages? The new rule provides an exception to the qualified mortgage requirements for loans which are eligible for purchase through Fannie Mae or Freddie Mac. I’ll bet a soda (pop to us in Iowa) that Fannie Mae and Freddie Mac release revised guidelines in the near future that match up very closely with those of the qualified mortgage rule. This will essentially create a secondary mortgage market for qualified mortgages only. There are some future reserve requirements which are the true motivating factor behind this change.
I would recommend that credit unions which are involved in the secondary mortgage market begin to ensure that their mortgage products meet the qualified mortgage rules. Underwriting a loan using the ability-to-repay factors is still a great option for these lenders, however loans which are underwritten in this manner will likely be held in the credit union’s portfolio, going forward.
This rule may seem to be a big deal on its own, but, don’t assume that we are finished with it on January 10, 2014. This may be just the beginning of changes to the secondary mortgage market.
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It’s here! Last week the CFPB issued the new final version of the remittance transfer rule. The final rule, which was originally supposed to be effective in February, has now been re-issued. The CFPB has given financial institutions additional time to comply with the rule so the new effective date is October 28, 2013.
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FinCEN released its 18th issue of its SAR Activity Review: “By The Numbers” and its 23rd Issue of SARs: “Trends, Tips &Issues” today. The documents are full of useful information with respect to filing suspicious activity reports.
Here are just a couple examples of what you will find:
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This blog post is a follow up to the mortgage compliance sessions at the CUNA Update School in New Orleans.
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We are excited to announce a new addition to the PolicyWorks team as well as introduce our new Director of Compliance Solutions!
We welcome Chris Haner to the PolicyWorks team as a Compliance Officer. Chris works with individual credit unions to develop, update, and administer their compliance programs. Chris’s work includes developing and reviewing compliance procedures, performing policy reviews, evaluating and recommending changes, implementing new laws and regulations, and developing and conducting training. You can learn more about Chris and his compliance background here.
We also welcome Jason Skemp into his new role as Director of Compliance Solutions. In this new role, Jason leads PolicyWorks’ compliance review services, including the full-scale review services offered in our new product ComplyRight. You can learn more about Jason and the compliance solutions here.
Finally, congratulations to our Senior Compliance Officer Brian Godwin who earned his CUCE certification last week!
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Last week we released our quarterly update to PolicyAid, our online policy solution. We included a new Fair Lending Policy to assist both federal and state chartered credit unions with their fair lending program. This new policy was developed in light of NCUA’s recently published Fair Lending Guide. In addition, we’ve updated a few of our existing policies based on final rules. Our April updates include the following:
- Fair Lending Policy (New)
- Electronic Funds Transfer Policy (Updated)
- Investment Policy (Updated)
- Servicemembers Civil Relief Act and Permanent Change of Station Policy (Updated)
- Real Estate Lending Policy (Updated)
If you aren’t already a subscriber…. check us out. We offer an annual subscription to a library of over 70 policies and counting for a mere $299. If you are tired of spending countless hours just staring at a blank piece of paper trying to get started, subscribe today and let us help you save time and energy. Our policies are in word document format and can easily be downloaded and customized to fit your credit union’s needs. For questions please contact us at policyadmin@policyworksllc.com or 1-855-341-4643.
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