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The Lending World According to the CFPB

Jul 2, 2014 by Lewis Wood

The Consumer Financial Protection Bureau (CFPB) changed the fundamental nature of how credit unions go about their day-to-day lending activities, CUNA Mutual Group’s Regulatory Compliance Manager Jon Bundy told an America’s Credit Union Conference Discovery breakout session audience today.

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CUNA Mutual Group Speaker Tells ACUC Audience Compliance Change Must Be Part of Strategic Plan and Budget 

SAN FRANCISCO - The Consumer Financial Protection Bureau (CFPB) changed the fundamental nature of how credit unions go about their day-to-day lending activities, CUNA Mutual Group’s Regulatory Compliance Manager Jon Bundy told an America’s Credit Union Conference Discovery breakout session audience today.

“Credit unions have spent the past six months adjusting to the CFPB’s new mortgage rules, and they’re not done, yet,” said Bundy.

Credit unions have implemented six new mortgage rules in 2014 with a seventh mortgage rule compliance deadline looming in 2015. In total, the CFPB issued more than 6,400 pages of new regulations for credit unions to comply with.

Bundy reminded the audience that each new mortgage rule has a different scope, and that many of the new rules apply to both open-end and closed-end loans. Almost all of the new mortgage rules impact dwelling-secured transactions, including motor homes, RVs, trailers, and boats, Bundy added.

“If you do any lending secured by a dwelling, you will be impacted,” said Bundy. “And that includes small credit unions, too.”

There are very few exceptions for small creditors and small servicers, which can be confusing because there are different definitions for small creditor relief in different rules. Bundy recommended credit unions take time to read each rule carefully to ensure compliance.

Bundy continued his session by engaging ACUC session attendees in a discussion about each new mortgage rule, and the pain point’s credit unions have experienced while implementing the rules as well as how to avoid these pains.

“Stay focused, take time to understand the changes, and make adjustments where necessary,” Bundy encouraged attendees. “Doing these things combined with a positive outlook and understanding what you can control will do more for your credit union than focusing on the pains of change.”

Bundy continued the session by giving attendees a glimpse of what’s on his radar for regulatory compliance, including the expedited funds availability act (Regulation CC), business lending data act (Regulation B), and home mortgage disclosure act (Regulation C), as well as educating audience members on the CFPB’s enforcement activities, including student lending and indirect auto lending, and consumer education efforts, too.

“Keep in mind, the CFPB is not done, yet,” Bundy said. “Looking at what the CFPB plans to accomplish in the next couple of years is daunting, but you have the tools to succeed as long as you start adapting now.”

Wrapping-up his ACUC presentation, Bundy recommended credit unions prepare for a fast pace of compliance change by investing time, money, and energy into developing a strategic plan and budget to navigate compliance risk and continue to implement the CFPB’s changes.

“Be an active participant with the CFPB by taking part in the comment process,” said Bundy.  “Provide real examples of the cost of compliance and impact for members, and be sure to take the long view of educating the CFPB on the value of the credit union movement. In the end it will all be worth it,” he added.

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CUNA Mutual Group was founded in 1935 by credit union pioneers, and our commitment to their vision continues today. We offer insurance and protection for credit unions, employees and members; lending solutions and marketing programs; TruStage® consumer insurance products; and investment and retirement services to help our customers succeed. More information is available on the company’s website at www.cunamutual.com

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Life, accident, health and annuity insurance products are issued by CMFG Life Insurance Company. Property and casualty insurance products are issued by CUMIS Insurance Society, Inc. Each insurer is solely responsible for the financial obligations under the policies and contracts it issues. Corporate headquarters are located in Madison, Wis.

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