CHARLOTTE, N.C.-The CFPB's new and forthcoming mortgage rules represent what one person called "the poster child for change" that FIs can expect in the coming year.
"You've got to continue to monitor the horse's mouth and then look for opinions," said Andy Barksdale, managing director at TruPoint Partners. "The CFPB, despite the volume of rules, has done a pretty good job of offering up some pretty decent summaries on the definitions of ability-to-pay and other key elements that are coming down the pike. I think the best way to handle it is to take those summaries and foster executive communication, and attempt to develop a strategy as to what side of QM and ability-to-pay that the credit union believes it wants to follow."
Barksdale noted that there is no shortage of opinions on how FIs should respond to new rules coming from the CFPB, and Barksdale noted that regulators are even waffling a bit on their own interpretations-at least for now.
'Adopt A New Mindset'
"Until there's actual execution and examples and ruling and real live exams, the struggle you have is if you're listening to anybody but the horse's mouth, you're subject to individual interpretations," he said. "Even through your examiners you have to be careful, because until there's a cycle of exams and coaching for those examiners-even the examiners and those that are going to be asked to review and interpret and help ensure execution around these laws-they're still concerned with that change. Everybody's struggling, just because of the volume."
Changes from the CFPB and other regulators, said Barksdale, mean that CUs also need to change.
"You have to adopt a new mindset," he advised. "With so much regulation, you have to believe that compliance is not a department, but that it is a corporate culture. ... You can't have the old-school belief that you have one police officer and the rest of the organization is just doing their thing."
