CUNA Mutual Group has been working to prepare credit unionexecutives for the latest round of changed regulations under theHome Ownership and Equity Protection Act of 1994.

Questions involving preparedness and other issues steming fromthe law's latest regulatory changes were the focal point of an Oct.16 webinar the insurer hosted.

Working under the title, “Avoiding HOEPA: Navigating the New Scope & Triggers,” more than 100online participants learned the ins and outs of the new law fromLauren Capitini, regulatory compliance manager, and Maureen Clark,regulatory compliance consultant, for CUNA Mutual's LOANLINERdivision.

Whether a credit union makes HOEPA loans or not is its ownbusiness decision, the pair stressed, but every credit union shouldbe aware of what qualifies as a HOEPA loan and train staff to watchfor triggers that could drive a loan into this category.

“My thought is that credit unions are going to feel the greatestimpact on the front end in making a determination if a loan issubject to HOEPA regulations,” said Capitini in a post-webinarinterview. “You have to understand what a HOEPA loan is and isn't,and the triggers that will put you into high cost categories.”

HOEPA, enacted in 1994 as an amendment to the Truth in LendingAct, was designed to address abusive practices in refinances andclosed-end home equity loans with high interest rates or high fees.Since HOEPA's enactment, such loans meeting any of HOEPA'shigh-cost coverage tests have been subject to special disclosurerequirements and restrictions on loan terms, and consumers withhigh-cost mortgages have had enhanced remedies for violations ofthe law.

As of Jan. 10, some of those requirements will change underoversight from the Consumer Finance Protection Bureau. CFPB'semphasis on consumer protection, part of its mandate as result ofthe Dodd-Frank Act, has created more stringent requirements forHOEPA with which credit unions and other lenders need to comply,Capitini says.

“CFPB's goal is focusing on protecting the consumer, and theregs are not focused on benefitting the lender in any way,” sheexplained. “It's now more onerous for lenders to originate theseloans, but credit unions do have choices and don't have to issueHOEPA loans.”