“My thought is that credit unions are going to feel the greatest impact on the front end in making a determination if a loan is subject to HOEPA regulations,” said Capitini in a post-webinar interview. “You have to understand what a HOEPA loan is and isn't, and the triggers that will put you into high cost categories.”

HOEPA, enacted in 1994 as an amendment to the Truth in Lending Act, was designed to address abusive practices in refinances and closed-end home equity loans with high interest rates or high fees. Since HOEPA's enactment, such loans meeting any of HOEPA's high-cost coverage tests have been subject to special disclosure requirements and restrictions on loan terms, and consumers with high-cost mortgages have had enhanced remedies for violations of the law.

As of Jan. 10, some of those requirements will change under oversight from the Consumer Finance Protection Bureau. CFPB's emphasis on consumer protection, part of its mandate as result of the Dodd-Frank Act, has created more stringent requirements for HOEPA with which credit unions and other lenders need to comply, Capitini says.

“CFPB's goal is focusing on protecting the consumer, and the regs are not focused on benefitting the lender in any way,” she explained. “It's now more onerous for lenders to originate these loans, but credit unions do have choices and don't have to issue HOEPA loans.”