It is almost a holiday weekend. I know that all of you compliance folks are tired from the CFPB’s onslaught of final and proposed rules. You have been going full speed since January. And, the CFPB is going to be issuing a lot more “stuff” in June. So, I thought I would take a minute to provide a little comic (and compliance) relief from the Daily Show’s Jon Stewart.
Enjoy the Daily Show’s Residential Evil clip and have a great holiday weekend!
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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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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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On Friday April 12th the CFPB issued proposed clarifications to the escrow rule. Last friday, they issued proposed clarifications to the Ability to Repay / QM Rule and the Mortgage Servicing Rule.
You are probably thinking “oh no! It’s the remittance transfer rule all over again! Why can’t they get it right the first time!” Given how many times the CFPB revisited the remittance transfer rule, such thoughts are certainly warranted. On the first read, however, the ‘clarifications’ issued on the escrow, ability to repay, and mortgage servicing rules appear to actually be clarifications, and not substantive changes to the rule. In my mind, the more commentary and explanatory examples the better. Furthermore, after a rule is issued, and even after the rule is effective, there is no reason to cease providing such commentary as issues not currently addressed in the commentary arise. Thus far, the CFPB seems to share these thoughts. In following the CFPB’s rulemaking process, you should pay attention not only to the actual rule and guidance, but also to the CFPB’s approach. The CFPB is very different from other regulators. By noting how they handle these rule-makings you can better plan the implementation of future rulemakings.
If you want a summary of the CFPB’s ‘clarifications’ click on the links provided above. Those links will also take you to the actual proposal. If you want to comment on the proposals, keep in mind that the comment period is very short – 15 days for the escrow rule and 30 days for the ATR and Servicing – so plan accordingly.
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If you’ve had a question recently about calculating fees or premiums for credit insurance products connected with a residential mortgage loan or HELOC secured by the consumer’s principal dwelling, you are not alone. The Dodd Frank Act prohibits a creditor from financing directly or indirectly credit insurance for these types of loans except when the premiums or fees are calculated and paid in full on a monthly basis. However, this change will only affect qualifying loans where the credit union received an application on or after June 1, 2013. This change does not apply to current loans.
While you are discussing these changes with your data processor and insurance provider, check out CUNA’s blog for additional information and to learn more about industry advocacy efforts regarding this change.
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We have good news! The CFPB has released the first of several tools to help financial institutions comply with the new mortgage rules. Yesterday the CFPB released the Small Entity Compliance Guide for the Ability to Repay/Qualified Mortgage rule.
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As of October 1, 2012, each federally insured credit union had to adopt written policies addressing loan workouts. A credit unions loan workout policy and practices should be commensurate with the credit union’s size and complexity and coincide with the credit union’s risk mitigation strategies. Seems simple enough; however, questions were still lingering for both the credit unions and the Examiners on this new rule.
After soliciting feedback from credit union officials and accounting professionals, NCUA prepared and released new loan workout, nonaccrual and TDR guidance for the Examiners to follow (Letter 13-CU-03). Although this guidance is directed at field staff, it provides credit unions with valuable insight on what to expect when your Examiner inquires about your loan workout policies and procedures.
If you haven’t had a chance to review the letter yet, I would strongly encourage you to take some time in the coming days to review to ensure your loan workout program will meet examiner expectations. A little due diligence now can save you time later dealing with unwanted Examiner Finding or Document of Resolution items related to this area.
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