An increased regulatory burden has not dissuaded credit unions from originating and servicing mortgages at least as much as they have in the past, the Government Accountability Office said in a report released Monday.

“Like community banks, credit unions generally do not appear to be shifting their portfolios away from mortgage lending,” the GAO concluded.

The total share of all residential mortgages serviced by credit unions increased from about 3.1% in the first quarter of 2008 to about 5.7% in the third quarter of 2015. However, the largest credit unions accounted for most of that increase, the GAO said.

Between the first quarter of 2002 and the third quarter of 2015, larger credit unions were more likely to have residential mortgages than smaller credit unions. And the larger credit unions typically had more residential mortgages as a percentage of assets than smaller institutions.

The GAO pointed out that mortgage servicing rights and capital standards rules are relatively new, but financial institutions and trade groups had expressed concern that the servicing rights requirements would hurt community lenders' efforts to provide and service mortgages to their customers and members.

“Although new regulations related to mortgage lending and servicing may increase compliance costs for community banks, our analysis suggests that these lenders generally appear to be participating in residential mortgage lending much as they have in the past,” the GAO said.

The GAO cited comments from officials at one credit union, who said servicing allowed the credit union to stay in touch with members and market additional services.

The CFPB said its exemption for small servicers is a way to help keep compliance costs low. The bureau estimated 99% of banks and credit unions with less than $1 billion in assets would be eligible for a small servicer exemption that would eliminate the requirement to comply with many parts of the servicing rules.

The small servicer exemption is available to institutions that service fewer than 5,000 mortgages.

The GAO report also criticized the CFPB for not having done significant work in developing a plan on how to evaluate the new mortgage rules. That review is required under Dodd-Frank and is due in January 2019.

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Reg Burden Not Slowing CU Mortgage Business: GAO

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