One would think that those focusing on assisting credit unions with regulatory compliance would have nothing to complain about. An umbrella salesman cannot curse the rain, right? Not necessarily. We have a front row seat to witness the hurdles faced by credit unions in trying to do the right thing and comply. For instance, there was an enormous amount of work done by credit unions to comply with three rounds of the CARD Act provisions. Much of the past year was spent deciphering the new credit card rules and implementing a multitude of measures to comply. After all of that, word comes that the Consumer Financial Protection Bureau's first order of business will be to revamp credit card disclosures.

Another example is the Real Estate Settlement Procedures Act and Regulation Z. Credit unions are now using new good faith estimate and HUD-1 lending forms for real estate loans pursuant to substantial RESPA changes. There have been at least 16 amendments and proposed amendments to Regulation Z since January 2010, many impacting real estate lending disclosures. In the midst of all of this, the CFPB intends to combine Regulation Z and RESPA disclosures for certain real estate loans so that consumers receive one disclosure instead of two. Given the ridiculous number of documents provided to borrowers to sign in order to obtain a mortgage, less paperwork is a good thing. However, how does combining Regulation Z and RESPA disclosures relate to all of the amendments enacted and proposed? Will credit unions have to start over again and again in terms of adopting new disclosures and terminology as the rules change?

While the intentions are good, it would be nice to at least know that we are heading toward simpler documentation and less of it. Unfortunately, there are too many signs indicating otherwise. The Dodd-Frank Act requires over a dozen new pieces of information to be collected and reported as part of your Home Mortgage Disclosure Act Loan Application Register. Credit unions will be collecting and reporting new information such as borrower credit scores and collateral property value. Although you might be in a better position to defend your loan decisions against claims of fair lending violations, reporting the additional information will necessitate additional training, new forms, and the possibility of technical data collection violations.

It is difficult for a credit union to not shrink from the compliance burden. Faced with the overwhelming number of regulatory compliance changes, I know of too many credit unions that are considering offering less products and services to members. At what point does the risk of violating consumer protection requirements become too much? For some, that point has been passed.

For others, the focus has not been solely on the seemingly insurmountable compliance challenges. Instead, these credit unions keep almost a running list of everything they have done to bring their products and services into compliance with the changes. They want to show their examiners they are making a good faith effort at regulatory compliance. Gone are the days when a credit union could ever feel absolutely comfortable with regulatory compliance. Instead, it comes down to effectively assessing the compliance risk to your credit union and deciding on a path that best mitigates those risks.

John Zasada is principal, financial institutions at Larson Allen. He can be reached at 218-790-1086 or [email protected]