The CFPB is expected to release its final rules on consumer disclosures under the Truth in Lending and Real Estate Settlement Procedures Act, which could address credit unions’ concerns over their mortgage operations.
Last year, the National Association of Federal Credit Unions sent a letter to the CFPB saying the proposed rule on loan disclosures imposes unreasonable compliance costs on credit unions and could force some institutions to stop serving long-term borrowers, Housing Wire reports.
Under the rules, servicers are required to correct errors found by borrowers, to provide certain information to borrowers, and changes the scope, timing and content of disclosures to consumers regarding interest rate adjustments.
Federal credit unions also expressed concerns that the electronic record-retention requirement would imposes unreasonable fees on the institutions and that the rule’s exemption for small credit unions should extend to institutions that issue five or fewer mortgages each year for credit unions with $175 million or less in assets.
The agency has completed all of its mortgage-related rules mandated by Dodd-Frank except for the TILA-RESPA rule.
“The final rule will make major changes in how credit unions must conduct their mortgage operations – including requiring new disclosures, and changing the timing of the mortgage underwriting process,” Tessema Tefferi, senior regulatory affairs counsel at NAFCU, said.