Sept. 10, 2012 – NAFCU General Counsel and Vice President of Regulatory Affairs Counsel Carrie Hunt on Friday urged the Consumer Financial Protection Bureau to reconsider certain aspects of its proposed changes to rules implementing the Home Ownership and Equity Protection Act.
The CFPB is proposing several changes to the HOEPA rules, including revising and expanding the triggers for loans covered under the law, as well as imposing new restrictions, such as a pre-loan counseling requirement. It also proposes changes to the definition of “finance charge,” which is also reflected is in the CFPB’s proposal combining disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act. The change would bring more loans under HOEPA.
Hunt said the proposed changes will place credit unions under “tremendous strain” as they attempt to comprehend the rules, update systems and processes, train staff and ultimately comply. In light of that burden, the CFPB should “reconsider the aspects of this proposal that are not specifically required by the Dodd-Frank Act,” she said.
More specifically, Hunt said “there is no pressing need” to make changes to either the finance charge calculation or corresponding changes to the transaction coverage rate. Those specific proposed changes would “add unnecessary complexity to an already complicated process,” she said.
NAFCU’s position, Hunt added, “is part of a broader policy that the CFPB should not, at this time, add to the regulatory burden for mortgage lenders by promulgating rules that are outside the scope of the requirements of the Dodd-Frank Act.”
Hunt also recommended that the CFPB:
- seek to provide “as much time as possible” for regulations that do not have a statutorily required effective date (for example, he said the effective date for HOEPA rule changes should be no earlier than January 2014);
- consider permitting the proposed counseling requirement to be fulfilled over the phone or online; and
- provide additional guidance on counseling requirement disclosures with respect to cases where five counselors are not located in the borrower’s zip code or neighboring zip codes.
NAFCU will continue to work with the CFPB to mitigate regulatory burden on credit unions as much as possible.