FREDERICK, Md.-The biggest compliance issues credit unions will face in the next 12 months relate to every step of the mortgage process, and one person says it's going to have an impact on more than just the mortgage department.
"These rule changes are not just affecting one part of the mortgage process," explained Jane Pannier, SVP and in-house counsel at NeighborBench LLC. "They start with the mortgage-origination process, the underwriting process, the servicing process. So for the average credit union, that means that it's going to affect multiple departments within the credit union. It also means that it's going to affect at least one-if not more-outside vendors that they utilize."
Pannier noted that because many CUs rely on outside vendors and CUSOs for mortgage servicing and origination, due-diligence will be needed to ensure everyone is complying with the rules.
Pannier offered several tips for CUs to better face these threats.
"First they've got to be sure they've got good written policies and procedures in place so they have all of these changes they have to make well documented-not only for examiners to see, but for staff to rely on," advised Pannier. "They have to make sure they get all their current lending policies and procedures updated."
Pannier added that training across multiple departments may be necessary. "This isn't going to be a one-day seminar when you've got changes as complex as these," she said. "They're going to need multiple training sessions in advance of all this."
'So Many Moving Parts'
Beyond just having policies and procedures in place, however, Pannier advised that CUs "do ongoing monitoring and review within the organization to make sure internally that even though they've gone through training processes with staff, that they are staying in compliance. There are so many moving parts and so many opportunities for something to fall through the cracks or make a mistake, you have to have an effective monitoring program to make sure they stay in compliance."
Whether that's all done internally or through outside partners, Pannier added that steps like that are particularly crucial. "We know that NCUA has already made it very clear that risk management is going to be their focus I their examinations, and certainly one of those key parts to risk management is compliance risk management."
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