New mortgage lending rules from the Consumer Financial Protection Bureau could affect the willingness of credit unions to offer new mortgage loans, a new CUNA survey showed.
While many of the credit unions polled in the survey have been working throughout the year to meet the compliance deadline for the CFPB rules, the trade group said Monday, the majority of them are not ready to comply with the new regulations.
Three in five or 60% have “determined they will be forced to discontinue, delay or reduce their mortgage loan product offerings because of the regulatory changes,” CUNA said in a press release.
“As a result consumers could be left with fewer options for home mortgage loans, at a time when America’s housing recovery finally seems to be gaining traction,” the release said.
Approximately 136 credit unions replied to the survey, the trade group said.
“These survey results are troubling for consumers,” CUNA President/CEO Bill Cheney said. “CUNA has urged the CFPB to allow more time for compliance, since seven rules will hit within a two-week period, which poses a monumental compliance challenge. This is a particularly daunting task for smaller credit unions, given their small staffing resources.”
Re-designing computer systems to meet the CFPB requirements remains a major concern for credit unions. The majority of the credit unions participating in the survey – 86% – are using third-party vendors to help reconfigure their systems while 69% of that 86% are using multiple vendors, CUNA said.
“Overall, 48% of vendors indicate they will complete programming changes to comply between November and December, and an additional 10% say they won’t be able to develop programming until after January 2014. 41% of credit unions indicate their vendor has not yet promised a delivery date,” CUNA said.
Responding credit unions said they were worried those challenges could cause them to miss IRS deadlines and/or CFPB compliance dates.
In the meantime, Cheney said CUNA is working to help credit unions minimize the impact.
“We are aware that the CFPB has talked with prudential regulators such as NCUA and that examiners should allow several months after the effective date before institutions that are seeking to comply are cited for violations. We are also concerned about protecting credit unions from litigation, and we will continue to pursue that issue as well,” the CUNA CEO said.