Tallahassee-Leon Federal Credit Union CEO Lisa Brown represented CUNA and credit unions at a Consumer Financial Protection Bureau (CFPB) hearing on the Small Business Regulatory Enforcement Fairness Act (SBREFA) at the U.S. Treasury. The Tallahassee based credit union was joined on the panel discussion with CUNA Senior Assistant General Counsel Jared Ihrig, Ronald Lauren, CEO of SIR FCU, Negaunee, Michigan, as well as representatives from community banks, mortgage bankers, and mortgage brokers.
Brown told the CFPB panel that credit unions should not be subjected to new regulatory requirements that could be created by pending mortgage origination regulation changes. Brown said that credit unions are impacted not only by the number of regulations, but the rewriting of them.
“Right now there are about 130 rules from 15 agencies. Credit unions are trying to keep up with them and then many get re-written. Each agency seems to have a contradictory opinion on the rule. It’s never just about the rule and the impact,” said Brown.
The CFPB is considering imposing certain restrictions on the charging of up-front points and fees, proposals for new rules regulating mortgage originator standards and compensation, and rules that would address mortgage loan originators' qualifications and compensation.
Brown represented credit unions under $175 million in assets at the hearing. However, she said she was asked about credit unions in general. She says she talked about their core philosophies and how these regulations impact the way credit unions serve their membership.
“I felt like once again we wore the white hat. The panel seemed to have a good understanding of the credit union difference. I was pleasantly surprised at how they understood there would be an impact,” said Brown.
The CFPB is also considering setting qualification and screening standards for loan originators, and Brown warned that these additional potential requirements could prove costly for credit unions.
A full slate of mortgage rules is expected to be proposed by the CFPB this summer and finalized by January 2013. The agency said it could provide an implementation period of up to one year, but has not decided how long of a transition period is necessary yet.
The CFPB is required to hold SBREFA panels to gauge the potential impact that upcoming regulations could have on small businesses. This was only the third SBREFA panel held by the CFPB.