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 Oct. 21, the majority of them are not ready to comply.
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, CUNA said.
“These survey results are troubling for consumers,” 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 comply with the regs is a major concern. Eighty-six percent of respondents said they are using third-party vendors to help reconfigure their systems, 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. Forty-one percent of credit unions indicate their vendor has not yet promised a delivery date,” CUNA said.
The credit unions said those challenges could cause them to miss IRS deadlines and/or CFPB compliance dates.