FFIEC Guidance on Reverse Mortgages
Almost lost in the shuffle on Monday was the FFIEC's publication of guidance concerning reverse mortgages.  The guidance is 50 pages in length.  NCUA signed off on the document, which will become effective 60 days after publication in the Federal Register.  Here's how the FFIEC described the guidance:
The guidance also addresses the general features of reverse mortgage products and relevant legal requirements and consumer protection concerns raised by reverse mortgages. It focuses on the need for banks, thrifts, and credit unions to provide clear and balanced information to consumers about the risks and benefits of these products.
Now, here's a possible shortcut. The guidance provides a ton of background. Â A ton. Â If you want to start reading what the guidance recommends, start your reading on page 32. Â The guidance ends by page 46. Â 14 pages or so. Â If your credit union does reverse mortgages, or is considering it, please forward the guidance to the person in charge of that product. Â If you are in compliance, I'd read it as well. Â But start with those 14 pages.Such information should be provided while consumers are making decisions about these products and should address the specific matters listed in the guidance, including informing consumers of available alternatives to reverse mortgages. The guidance also states that institutions should take steps to avoid any appearance of a conflict of interest and requires that consumers receive qualified independent counseling. The guidance addresses related policies, procedures, internal controls, and third-party risk management.