BOSTON — Consumer Financial Protection Bureau Director Richard Cordray told credit unions Thursday during his general session address at NAFCU’s Annual Conference that in some respects, they’d be worse off without the bureau.
“Congress provided that the new requirements of Title XIV of Dodd-Frank would have taken effect on their own terms in the absence of implementing rules issued by the deadline, which would have been in January 2013, six months ago,” he said.
“And the statutory provisions were much less responsive to the special circumstances of smaller creditors, such as credit unions, than our rules have turned out to be. So, in important ways, the Consumer Financial Protection Bureau has been a very positive force for credit unions on these issues,” the CFPB director said.
Also at NAFCU Annual Conference:
- 4 Big Things from Confab
- Becker Calls it a Wrap
- Dollar Says Let Golden Goose Live
- Matz Reveals New Risk Rule
- Thursday in Pictures
- Non-Interest Income Balance
- Berger Promises Training Boost
- Beantown Vox Populi
- Wednesday in Pictures
- Non-QMs Offer Opportunity
- Managing Outsourced Collections
- Losing Money at Loan Closings
- New Officers for 2013-2014
In his lunchtime address, the regulator reviewed recent mortgage rules issued by the CFPB and amendments to those rules that exempt small lenders. And, as he has done in past credit union industry speaking engagements, Cordray encouraged the financial cooperatives to make mortgages that don’t meet qualified mortgage standards.
“We have tried to ensure that the risk differential between those categories is not substantial, and we have conservatively estimated that the potential liability cost associated with making non-QM loans would add less than one-eighth of a point to the interest rate,” he said.
“We did this so that credit unions and other responsible lenders can continue to make traditional relationship loans regardless of how they are classified for purposes of the Ability-to-Repay rule.”
Cordray noted that credit unions continue to feel anxious about qualified mortgage standards, and offered assistance from the CFPB to discuss and analyze the issues in more detail.
He also announced he will he will participate with NAFCU in one or more conference calls to discuss non-QM loans and credit union reluctance to make them.
Cordray repeatedly praised credit unions and their high underwriting and service standards during his speech, and also told his audience that earlier in the day, he had toured the National Credit Union Museum in Manchester, N.H.
He said he was impressed by the origins of the credit union movement and the closeness of credit unions to underserved Americans who nonetheless needed comfort security and safety for their money.