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Is the CFPB Changing its Tune on Vendor Responsibility?

The agency's apparent change of tune signals its willingness to truly listen to banks and credit unions.

By Cindy Williams | Updated on November 27, 2015

The buck stops with you. Credit unions citing vendor-related hurdles to compliance have heard this from regulators for years. Yet, that sentiment may be changing.

Just last month, CFPB Director Richard Cordray told Mortgage Bankers Association conventioneers his agency may need to look more closely at vendors that are “creating obstacles” for mortgage lenders. He went on to say other financial regulators may need to join the CFPB in paying greater attention to these reports.

This may sound like music to the ears of credit unions such as the $59 million, DuBois, Penn.-based Timberland Federal Credit Union, the staff of which was forced to use a typewriter to manually process TRID applications because its software vendor was not yet ready for TILA/RESPA. Yet, if Cordray and his counterparts follow through, the credit union industry could shoulder an even larger burden. That’s because some of the vendor organizations credit unions rely on are actually owned by credit unions, either individually, in partnership or as part of a league or association. Poor findings for CUSOs are poor findings for credit unions.

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