A group of 26 U.S. senators wrote a letter to CFPB Director Richard Cordray urging him to delay new mortgage rules set to take effect in January 2014.
In the letter, Sen. Mark Begich (D-Alaska) and 25 Republicans said compliance with the rules before the deadline is a daunting task for credit unions and community banks.
“These proposed new rules and amendments present our nation's financial institutions with thousands of pages of new regulations with which they must comply by January 2014,” said the letter dated Nov. 21, just before the congressional Thanksgiving recess.
“Our constituents advise that this compliance task will prove daunting for the nation's community banks and credit unions with compliance officers,” the letter also said.
The senators said financial institutions have indicated to them that their software systems would not be ready for operation by the deadline.
“If financial institutions are unable to fully comply by the January 2014 deadline, it could lead to market distortions,” the letter said.
A group of six House Democrats and 112 House Republicans wrote a similar letter to Cordray at the beginning of November requesting a yearlong delay. The senators’ letter did not request a specific date.
NCUA Board Chairman Debbie Matz told Credit Union Times after the November board meeting that the NCUA would start to enforce the rules at the beginning of next year.
“NCUA, like the credit unions must follow the law and the law says that those regs, most of them will be going into effect in January of 2014 so of course, we will examine for them,” Matz said then.
NAFCU has asked the CFPB to delay the rules by at least 12 months.
“In January 2013, the CFPB issued seven significant mortgage-related rules, each with an effective date in January 2014. The rules directly affect or indirectly impact every aspect of a credit union's mortgage operations, including origination, servicing, loan originator compensation, escrow, insurance-related matters and appraisals,” NAFCU President/CEO Dan Berger said in a letter to Cordray.
“Largely due to concerns with vendor readiness – a one-year extension of January's compliance deadlines for CFPB's new mortgage rules would be optimal,” Bill Hampel, CUNA senior vice president and chief economist, said during a Senate Committee on Banking, Housing and Urban Affairs hearing on Nov. 5.