DALLAS-The $268-million Southwest Airlines FCU is among those attempting to get its arms around new mortgage lending rules from the CFPB.
SVP mortgage Lending and Compliance Janice Sheppard said SAFCU, which lends in nine states and considers other states the airline serves on a case-by-case basis, is still gathering information.
"We are in different stages," she said. "Right now we are analyzing what is going to be affected, trying to set the timeline, set the calendar, trying to get our head around it all. We have a full-time compliance manager who is a very busy lady right now."
SAFCU services its own loans and has been a Fannie Mae seller-servicer [selling the loans to Fannie Mae but retaining the servicing] for several years. Sheppard said the most difficult issue with the CFPB's servicing rule is trying to figure out what applies and what does not.
"The exemption for fewer than 5,000 loans per year is a good thing for us, but it does not exempt us from other rules," she said. "We will be watching the CFPB's definitions of what is included in APR, and depending on what is tied to the definition, what other impacts it will have on high-cost home loans. The Truth In Lending-disclosed APR that goes to the consumer potentially will be driven up due to the new rules including more closing costs, which might push more loans into the high-cost category. It is cascading effect, potentially, but we just do not know."
To prepare, Sheppard said SAFCU is meeting with its local attorneys, reaching out to NCUA and its regional office, in addition to its peers. It uses a professional compliance vendor, but she said some of the answers are leading to more questions.
"We have a compliance calendar on our intranet so everybody can keep track of all the impacts," she said. "The majority of the folks I talk to at other credit unions are on the same lines. Some have had to do more already than we have because they service more than 5,000 loans. One of the biggest challenges is timing. There probably is no good time, but with the lowest interest rates in 50 years we have the perfect storm for a lot of demand. We already are doing a lot with loss mitigation and helping people stay in their homes, and now comes this third concern with all these new regulations."
SAFCU is ramping up on specifics of the regulations and how they will impact its business today and into 2014, which Sheppard said "is about as far out as we can go."No matter what, she insisted, the credit union will be ready to comply due to the importance of mortgages for its business model.
"We estimate that every mortgage we get we add four core products with that household," she said. "The mortgage is very important to us because we see it as an invaluable tool for getting new members, retaining current members and serving members."
