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NAFCU Regulatory Affairs Counsel Celina Stewart on Monday urged CFPB to exempt all credit unions from its rulemakings by including them in its ‘small creditor' definition.

"We firmly believe that all credit unions are small by nature of their structure and organization as not-for-profit, member-owned institutions," Stewart wrote in a comment letter on CFPB's proposed amendments to its definitions of "small" creditor and rural and underserved areas in its mortgage rules under Truth in Lending Act.

Stewart thanked CFPB for its efforts to adjust previous definitions in order to give regulatory relief to small creditors, and particularly for its use of "small creditor" and "small institution" thresholds. However, she noted that all credit unions are structured differently from large for-profit institutions, and accordingly are more in need of regulatory relief.

"Since the introduction of the 2012 mortgage rules, NAFCU has consistently maintained that the current 500 origination threshold is disadvantageous to small creditors," Stewart wrote. "The vast majority of credit unions of the $2 billion asset size, and even those significantly smaller, typically originate more than 500 mortgages a year. NAFCU's research indicates that a large number of credit unions with less than $2 billion in assets that have small mortgage operations would not qualify for the exemption."

Stewart pushed for the origination threshold to be increased to 2,000 first mortgages per year but said loans held in portfolio should be excluded from the total.

Further, Stewart advocated the clarification of how to calculate asset thresholds in the case of a credit union service organization owned by multiple credit unions. She also recommended either maintaining a three-year look back period for assessing whether a lender has serviced rural or underserved areas, or extending the proposed amendment's effective date to Jan. 1, 2017 in order to give credit unions time to adjust their strategic plans accordingly.