ATLANTIC CITY, N.J. — The Consumer Financial Protection Bureau is churning out regulations. The question, according to Rob Rutkowski who's a partner in the law firm of Weinberg & Reis Co. LPA, is whether credit unions are ready for compliance.
While only financial institutions over $10 billion in assets receive direct oversight from the CFPB, the rest are still required to comply with them.
The mortgage loans standards outlined in Dodd-Frank, which also established the CFPB, adds provisions to the Truth in Lending Act to ensure that mortgage loans reflect borrowers' ability to repay and that are understandable and not unfair, deceptive or abusive. Changes to TILA could see fees redefined as part of APR, which could push otherwise good rates at credit unions up around 30%, Rutkowski explained. However, federal credit unions are held by usury regs to a maximum of 18%. "Is it possible that January 1, you can't make mortgage loans? I don't know," he admitted, and neither does anyone else at this point.
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