ATLANTIC CITY, N.J.—The Consumer Financial Protection Bureau isready for action, attendees at the New Jersey Credit Union Leaguemeeting this week were told.

The question, according to Rob Rutkowski who's a partner in thelaw firm of Weinberg & Reis Co. in Cleveland, is whether creditunions are really ready for it.

The mortgage loans standards outlined in Dodd-Frank, which also established the CFPB, adds provisions to the Truth in Lending Act to ensurethat mortgage loans reflect borrowers' ability to repay and thatare understandable and not unfair, deceptive or abusive.

Changes to TILA could see fees redefined as part of APR, whichcould push otherwise good rates at credit unions up around 30%,Rutkowski explained in a session on Monday. However, federal creditunions are held by usury regs to a maximum of 18%.

“Is it possible that January 1, you can't make mortgage loans? Idon't know,” he admitted, and said neither does anyone else at thispoint.

Among other things, it also requires that mortgage loanoriginators must be “qualified” and if required, licensed orregistered in accordance with the SAFE Act.

Rutkowski explained that the rules implementing these are stillcoming out and no one's quite sure who will have control over whodetermines what qualified is—whether it will be the institution orthe Federal Reserve, which is charged with writing that particularregulation.

While mortgages are key on the NCUA front as well, the recentmurmur among credit union executives has been concerns regardingmulti-featured open-end lending as put forth in the NCUA's Letterto Federal Credit Unions (12-FCU-03). Rutkowski recommended thatcredit unions have policies and procedures in place todifferentiate open-end lending from closed-end lending, includingspecific processes for opening MFOEL plans, performingverification, issuing advances within open-end policies, andestablishing specific credit limits for each feature within theplan.

Also make sure your data processor can support these policiesand procedures as well as ensuring your member servicerepresentatives and call center personnel are properly trained onthese, he said.

It is appropriate to verify collateral value when secured assuch and to complete periodic portfolio credit scoring across theportfolio but not in conjunction with a member's advance, Rutkowskisaid.