NAFCU Voices Support for Proposed Legislation

first_img March 13, 2015 507 Views in Daily Dose, Servicing CFPB Community Lending Enhancement and Regulatory Relief Act of 2015 House Financial Services Committee NAFCU NCUA 2015-03-13 Samantha Guzman NAFCU Voices Support for Proposed Legislationcenter_img The National Association of Federal Credit Unions (NAFCU) released a letter to the House Financial Services Committee voicing their support for the “Community Lending Enhancement and Regulatory Relief Act of 2015,” Friday. The bill, which would provide the National Credit Union Association with more time to access the impact of the revised risk-based capital proposal on mortgage servicing assets, was introduced by Rep. Blaine Luetkemeyer (R-Missouri) earlier this month.“We thank Representative Luetkemeyer and his staff for their leadership and commitment to provide credit unions parity in many key aspects of regulatory relief for community financial institutions found in this bill,” the NAFCU said in the letter.The bill includes a report provision, which will delay the implementation of the NCUA’s proposed risk-based capital regulation as it relates to mortgage servicing assets until an impact study is conducted. The NAFCU says this will promote transparency, require a thorough analysis of the proposal’s impact on mortgage servicing assets, and encourage the NCUA to take more time to consider the full impact of its proposed capital rule. The NAFCU also says they are pleased to see this legislation would waive escrow mandates for loans held in portfolio and increase the “small servicer” exemption threshold to 20,000 mortgages annually.“This important exemption recognizes the strong history of small institutions providing high-quality mortgage servicing. Given their track record, small servicers should be incentivized to continue to service mortgage loans,” they said. “The existing escrow rules drive small creditors from the mortgage market because it is difficult to provide cost effective escrow services.”The bill would also exempt higher-risk mortgages of $250,000 or less from appraisal requirement provisions under the Truth in Lending Act if the lender holds the loan in portfolio for at least 3 years.  This bill would also provide important legal safeguards for lenders acting in good faith throughout the appraisal process. The NAFCU recommends raising the $250,000 threshold to a higher level, once the committee reviews the bill for improvement.According to the letter, the NAFCU believes credit unions and other financial institutions should be given a safe harbor if they assume the risks associated with making a mortgage loan available to consumers, when necessary and appropriate. They say they are happy the legislation would ensure residential mortgage loans held in portfolio by originators, such as credit unions, automatically attain the qualified mortgage (QM) safe harbor under the Consumer Financial Protection Bureau’s (CFPB) rules.“An important part of the providing regulatory relief to community financial institutions is to ensure credit unions have parity and balance with relief offered to other types of institutions,” they said. “As the committee continues its work on regulatory relief, we would urge you to support and act on this legislation as it would provide meaningful relief to our nation’s credit unions.” Sharelast_img read more