President Trump. Credit: The White House via Wikimedia Commons
President Donald Trump signed a sweeping executive order Friday directing federal financial regulators, including the NCUA, to review and revise a wide range of mortgage regulations in an effort to expand access to home loans and reduce compliance burdens on smaller lenders.
The order focuses heavily on regulatory changes enacted after the 2008 financial crisis, particularly rules tied to the Dodd-Frank Act. The White House said the directive is intended to improve mortgage availability, lower costs for borrowers and increase participation from community-based lenders.
While much of the language centers on community banks, the order also directs the NCUA and other regulators to review several housing finance policies.
Among the potential changes are revisions to Ability-to-Repay and Qualified Mortgage (ATR/QM) rules, adjustments to capital requirements for mortgage-related assets, and modernization of appraisal standards. Regulators were also instructed to consider broader use of alternative valuation models and artificial intelligence in the appraisal process.
The order calls on the CFPB to explore simplifying mortgage disclosure requirements and easing certain Home Mortgage Disclosure Act reporting rules for smaller institutions.
While the Executive Order made explicit references to banks and community banks, it did not reference credit unions even though it did mention NCUA along with other federal financial regulators. With that in mind, the Defense Credit Union Council's President/CEO Anthony Hernandez released a statement late Friday afternoon saying DCUC will be working to make sure credit unions are, in fact, included in this order from President Trump.
"Credit unions are essential partners in expanding access to affordable homeownership, particularly for underserved communities, and servicemembers and veterans navigating programs like the VA loan," Hernandez said. "As Treasury and federal regulators move forward with implementing this Executive Order, credit unions must be included in the conversation. DCUC stands ready to work with policymakers to ensure credit unions receive the same fair consideration as other community lenders."
For credit unions, the directive could translate into reduced compliance burdens, expanded liquidity access through the Federal Home Loan Bank system, and greater flexibility in portfolio mortgage lending.
Federal agencies have been given up to 120 days to review housing finance regulations and recommend potential changes or legislative actions.
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