CUs Need To Get Up To QRM Speed PDQ

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DALLAS-Ever tried drinking from a fire hose? That's what it's like for credit unions trying to ensure compliance with the rapid-fire regulation that has been coming out as Congress and regulators try to prevent another financial crisis.

That is the message from David Motley, president of CU Members Mortgage, which is a division of Colonial Savings, a federally chartered thrift. He said dealing with the repercussions of the Dodd-Frank Act is a "big deal." "Dodd-Frank led to 250 rulemaking opportunities, which has resulted in a fire hose of new regulations," he said.

Motley said one of the most potentially burdensome regs to come out of Dodd-Frank is QRM, or qualified residential mortgage rule. Although the rule is still in comment period until Aug. 1, he said implementation in its present form "would have the unintended consequence of raising the cost of credit for first-time homebuyers, minorities and those who are not wealthy."

"There are lots of draconian, prescriptive rules in QRM as it is currently written," he said. "Credit unions should be commenting on what they feel will be the impact to their members if the QRM rule is adopted as prescribed by the legislators. The rulemaking process did not include NCUA or other members of the credit union world. Credit unions should file their comments with the Fed."

Motley said his compliance manager told him something he did not know: a provision in the unfair, deceptive and abusive practices portion of Dodd-Frank will fall under the Consumer Financial Protection Bureau. "This could become another big headache for managers of financial institutions. There are no definitions yet, but Dodd-Frank authorized a rule and will leave it up to the CFPB."

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