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May 15, 2013 – NAFCU member credit unions responding to a survey for the May Economic and CU Monitor newsletter are getting a head start on compliance with the CFPB's ability-to-repay/qualified mortgage rule, and 44 percent say they already plan to cease offering non-QM loans.

The May ECUM survey asked member credit unions about a range of impacts under rules implemented under the Dodd-Frank Act. A stark majority – 92.9 percent – of respondents said they have seen regulatory burdens rise under the statute, and 88.1 percent cite increased compliance costs.

In the absence of Dodd-Frank Act regulatory and compliance burdens, 71.1 percent of respondents said they would be able to offer lower fees to members; 57.9 percent said they could offer more services or enhance existing ones.

As for the ability-to-repay/QM rule alone:

• 44 percent of respondents said they will reduce their originations of loans that don't meet the CFPB's QM standard.
• Another 44 percent plan to stop non-QM originations.
• 37.5 percent said they originated loans in 2012 that would not meet the rule's criteria.
• 76.2 percent of survey respondents service mortgages.
• 51.4 percent will have to revise their periodic billing statements under the rule.
• For 18.2 percent, the 120-day waiting period for loss mitigation actions conflicts with a state rule.

Of those credit unions that service mortgages, most said their set-up costs under the CFPB rule will come in under $10,000; however, 11.5 percent say they expect initial set-up to cost more than $50,000, and 7.1 percent expect ongoing costs to exceed $50,000.