CFPB 'Makes Healthcare Look Insignificant'

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SPOKANE, Wash.-If credit unions think the compliance burden is bad now, said Dave Chiappe, just wait-it's only going to get worse.

Chiappe is COO of Sharper Lending, which offers its Appraisal Firewall as a tool for credit unions offering mortgage lending products, and he stressed that the creation of the Consumer Financial Protection Bureau "will overshadow the FTC and all other regulatory groups. They don't even go to Congress for their funding-they go to the Fed for funding, so they've got a blank check. Outside of some spectacular organization of credit unions and their lobbies, I see regulation getting heavier and more difficult to comply with."

One of the problems with the Consumer Protection Act, said Chiappe, is that it has "injected all kinds of confusion and expense into the credit union market." For example, because most CUs have not sold loans to Fannie Mae, they weren't covered by the requirements issued by Fannie. But CUs must now comply with a number of regs that haven't affected them in the past.

One of the ways the CU community can protect itself is by working closely with vendors, he said. "They're going to need to partner with them in a way that they haven't done in the past to make sure they can navigate these new waters."

Part of what will make the CFPB so onerous, he continued, is that the act of Congress which created it "makes healthcare look insignificant; it's the single largest act that has ever been passed by Congress, and it was done with a manner that didn't get any scrutiny from the media or anybody else," according to Chiappe. "Most consumers haven't felt [this] yet, and it might be so ingrained by the time anybody does look at it that it might be too late, because Wells Fargo may be the only one left to get a loan from."

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