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The May issue of NAFCU's Compliance Monitor analyzes how the Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure (TRID) rule applies to construction loans, as well as how credit unions can effectively manage vendors.

NAFCU Regulatory Compliance Counsel Shereefat Balogun noted that many creditors are confused about TRID's disclosure requirements for construction-to-permanent loans.

"Many creditors have criticized the CFPB for its lack of clear guidance on TRID's application to construction loans, and have specifically cited the absence of sample forms and only minimal reference to construction loans in the commentary," Balogun wrote. "Notwithstanding this lack of guidance, creditors should note the TRID disclosure requirements and existing guidance do generally apply to covered construction loans, except where otherwise mentioned.

"This is the case even if the guidance or rule provision does not directly reference construction loans," she continued.

Regulatory Compliance Counsel Benjamin Litchfield outlined guidance for how credit unions can create a safe and sound vendor management program.

"Strategic relationships with third-party vendors can allow a credit union to offer diverse products and services to members and achieve cost savings by outsourcing routine back office functions," Litchfield wrote. "However, if not properly managed, these relationships can also expose a credit union to unnecessary credit, compliance and reputation risks."

The Monitor also addresses questions about the Military Lending Act, scholarship programs and flood insurance. The Compliance Monitor is available online (member log-in required).