Many Know The Bill, Not The Details

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DALLAS-Everyone's heard of Dodd-Frank. But few are as familiar with all it entails as they should be. And that could make for a challenge in 2012, observed one person.

Linda Clampitt, senior vice president for CU Members Mortgage, a division of Colonial Savings, said she does not believe most credit unions realize just how much the many regulations stemming from Dodd-Frank affect them-not to mention the additional regulations that will continue to go into effect in coming months and the new year.

"Management needs to drill down to daily operations to make sure everything is addressed," she advised. "The SAFE Act went into effect [July 29], and we had credit unions calling us as late as [mid-July] saying they never heard of it."

Credit unions that have gotten more aggressive in mortgage lending have learned the compliance that comes with it can be as big as a house, too, and then there is learning to work with Fannie and Freddie. Clampitt noted that one processor that used to handle 60 files at a time is now processing 30 or 35 files because mortgages have become more complicated. That isn't just an issue for the credit union, but an issue to be planned for in communicating with mortgage borrowers in 2012.

Possible solutions? Some CUs are looking at taking on a partner, she said, while others are expanding into FHA loans, "which many credit unions want to do because there are a lot of good reasons, but it is getting harder to do so."

Still other credit unions are weighing how much to put into portfolio versus selling on the secondary market.

"If credit unions have a secondary market strategy, managing their loan-to-asset ratio is a challenge with interest rates remaining so low. A lot of credit unions will not put loans on their books less than 4.5%."

Education is "key more than ever," especially when offering first mortgage loans, she continued.

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