Credit unions should expect new Consumer Financial Protection Bureau rules on mortgage closings and credit reports this year, a panel at CUNA's Governmental Affairs Conference warned attendees Tuesday.
CUNA Associate General Counsel for Regulatory Advocacy Jared Ihrig said the regulator is likely to come up with a framework in 2015 for the mortgage-closing process, which can require cumbersome documents for members to sign, and if they are unusually diligent, to review.
The CUNA regulatory attorney is also predicting new CFPB rules on overdraft fees.
"A lot of credit unions rely heavily on overdraft income and a lot of members rely on overdrafts so they are not embarrassed at the grocery checkout line," he noted, adding the agency is concerned about credit unions automatically enrolling credit card holders in overdraft programs.
An introduction of mortgage appraisal guidelines is another CFPB mandate Ihrig predicted will be forthcoming.
He said the agency's mortgage rules are certain to be subject to continuous revisions, an opinion that was amplified by the compliance head of a Midwest-based credit union consulting operation.
"If you ever hears the words 'final rule' from the CFPB on lending, don't believe it," said PolicyWorks Vice President of Regulatory Compliance Andrea Stritzke.
Stritzke said she assumes the CFPB will come out with rules limiting or restricting mandatory arbitration clauses in credit card agreements. She noted that the CFPB has indicated that it would do something about reward programs and online disclosures. So Stritzke is advising her clients to carefully spell out the benefits and terms of these offerings.
She is also anticipating some guidance in the near future from the agency on accuracy in credit reports. She said when collecting debt from members, credit unions should be clear to them how that information will appear on their credit reports.
Ihrig said he is looking for the CFPB to eventually release rules on indirect auto loans where the dealer writes the loans and credit unions buy the paper.
"A lot of credit unions had exposure in indirect auto lending. It's a good way to gain additional members and to grow auto lending," he said.
