Credit union compliance staff will spend most of next year onnew, proposed and final rules issued by the CFPB, CUNA Mutual Group's Lauren Calhoun and Bill Klewin toldtheir Online Discovery Conference audience late Tuesday.

“This has been the most challenging regulatory environment wehave ever had in my 30 years of experience with lending compliance.And it will continue to be one of the most challenging as we moveforward,” said Klewin, director of regulatory compliance.

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The complexity and depth of compliance changes will tax creditunion staff, create additional expense and could have a negativeimpact on member service, Klewin added.

“The CFPB has issued 3,365 pages of proposed rules in just onesix-week period this summer. That is on top of the hundreds ofpages of rules already issued this year. Some of the changeswill be technical in nature, while others, such as the proposedmortgage rules, will require a complete overhaul of credit unions'mortgage lending portfolio,” said Calhoun, regulatory compliancemanager.

The CFPB has issued seven proposed mortgage rules, each with comment period closing dates inOctober or November. The CFPB will analyze comments and issuefinal rules in January 2013 and throughout the year, dependent onthe rule.

A more immediate rule that has been clarified for credit unionsis the Remittance Transfer Rules, which has a mandatory compliancedate of Feb. 7, 2013. A credit union must comply with the newrules if it initiates more than 100 remittance transfers in acalendar year.

The required disclosures –a pre-payment disclosure and a receipt— are pretty simple, the compliance experts said. However, theexecution of completing the forms will be difficult. It willadditionally require training new employees as well as developingnew processes to be sure the new disclosures are distributed in atimely fashion, they added.

Klewin also outlined options for credit unions in light of theNCUA's recent letters regarding open-end lending. He feelsmost credit unions that are still using multi-featured open-end lending will likely move to acombination of open-end and closed-end lending.

“There isn't just one cure-all or an easy solution that willstill allow you to do MFOEL. But today, most MFOEL convenience canbe replaced in a compliant manner with technology such aselectronic disclosures and signatures,” Klewin said.

A key to managing all of the complex regulatory changes will befinding competent compliance staff and giving them the tools andresources to upgrade their skills and influence, the twosaid.

Although more than one department may be working on compliance,there needs to be one person on staff who has the overallaccountability and can report at an appropriate level to influenceand coordinate across departments.

CUNA Mutual Group said it attracted more than 1,800 credit unionand league employees Tuesday for the free, online event.