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CUNA Mutual Group Anticipates Broader Regulatory Focus in 2014
Wednesday, October 2, 2013 6:50 AM

Credit union compliance staff need to be mindful of the Consumer Financial Protection Bureau’s (CFPB) quickly approaching deadlines as 2013 concludes, attendees of CUNA Mutual Group’s fourth annual Online Discovery Conference were told by the company’s Lauren Capitini and Jon Bundy.

“A look at the CFPB’s semiannual regulatory agenda indicates the agency is moving full speed ahead on additional rulemaking,” said Bundy, regulatory compliance manager. “From this report, we’re able to predict what credit union compliance officers can expect to hit their desks over the next six months.”

“Right now, credit unions should be focused on implementing changes to comply with the CFPB’s six new mortgage rules issued in January,” said Capitini, regulatory compliance manager, during her “Mortgage Myth Busters” session, which tackled myths about new mortgage regulations. “The mandatory compliance dates for most of these new rules are in January, so credit unions really need to be putting the pedal to the metal,” Capitini added.

The CFPB continuously made updates to the six new mortgage rules over the summer, and only recently finalized the rules. Final updates to the rules include:

  • Clarifying the flexibility available to credit unions when dealing with delinquent borrowers;
  • Finalizing the rule prohibiting the financing of credit insurance premiums for some types of mortgage loans; and
  • Changing the effective date for the loan originator compensation rule to Jan. 1, 2014.

Capitini reminded audience members that other rules outside of the mortgage arena are also quickly approaching, including new remittance transfer rules which go into effect Oct. 28.

In addition, Capitini said a seventh mortgage rule to combine the mortgage disclosures under Regulation Z (TILA) and Regulation X (RESPA) is expected to be handed down by the CFPB later this month.

“This seventh mortgage rule will completely revamp the disclosure requirements connected to the loan event, making the end of 2013 a busy time for mortgage lenders,” said Capitini.

Bundy’s session “Lending Compliance Pipeline: What May Be Coming” focused on the CFPB’s radar and looking ahead to 2014.

“We anticipate the CFPB will modernize deposit regulations by the end of 2013,” said Bundy. “Members may not see much of a practical change from the new rules; however, credit unions will likely have to learn new time periods for funds availability and new model disclosures.”

Bundy explained the CFPB will do so by finalizing revisions to Regulation CC, the Expedited Funds Availability Act’s implementing regulation, to accommodate an all-electronic interbank check collection and return process by the end of 2013.

“Looking ahead to 2014, credit unions can expect to see the CFPB expand its fair lending focus,” said Bundy. “The CFPB’s regulatory agenda unmistakably signals that fair lending will be a focal point of new rule making starting in 2014.”

The start of this effort will be a hard look at the data-gathering requirements under the Home Mortgage Disclosure Act (HMDA), and will later expand into possible rules mandating the collection of credit application data for credit unions involved with business lending, Bundy said.

Other potential regulatory changes on the CFPB’s radar include:

  • Possible Revised Disclosures for Student Loans and Credit Cards
  • Payday Lending and Payday Alternative Loans
  • Overdraft Protection

Bundy told audience members the key to managing all of the complex regulatory changes is to stay on top of the mandatory compliance deadlines by finding competent compliance staff, and then giving them the tools and resources they need to be successful.

“Make compliance a reason your members rely on you. Plan for it. Budget for it. And embrace the fact that continuous change is the new normal,” said Bundy. 

Helpful resources:

BSA/CIP/OFAC Compliance Reviews: from Credit Union Resources’ Financial & Technology Resources: Annual review of procedures and documentation relating to requirements of the Bank Secrecy Act (BSA), Customer Identification Programs (CIP) and Office of Foreign Assets Control (OFAC). BSA/CIP/OFAC Compliance Reviews are required annually as outlined in the Office of Foreign Asset Control and Section 326 of the USA Patriot Act regulations.

Website Compliance Reviews: from Credit Union Resources’ Financial & Technology Resources: Credit unions can select from a limited scope or expanded full scope website reviews. Limited scope conducts a review of the credit union’s website for compliance related items only. The expanded full scope option reviews the website for regulatory requirements, as well as a review of web host vendor, regulatory review of third party vendors, credit union due diligence and site compliance with applicable Federal Reserve and NCUA applicable rules and regulations.

Shared Compliance Resources: Credit unions can share a compliance expert with other credit unions. Throughout the year, the compliance expert will divide or share their time among assigned credit unions. While working at a credit union services provided include the development, management and maintenance of an effective compliance program; providing a risk assessment of existing compliance system; monitoring and analyzing new and revised laws and regulations, and training staff and management on current and crucial regulatory issues.

Cornerstone Credit Union League’s Compliance Council: The council addresses regulatory issues, both state and federal, and may even issue letters, opinions, and interpretations basic to the application of the statute being reviewed. Professionals from credit unions across the regions we serve have joined forces and are sharing best practices through the Compliance Council.

The Cornerstone Credit Union League’s Compliance Review Seminar Nov. 6, at the League’s headquarters in Farmers Branch, Texas. Featuring Deborah Crawford, the one-day program focuses on Texas share accounts; specifically documentation and compliance, as well as a regulatory update on Texas accounts. If you open and document accounts in Texas, Crawford says you don’t want to miss this seminar, which offers an “A to Z” on all the Texas law, documentation requirements plus the federal Bank Secrecy requirements to open accounts.