ARLINGTON, Va.—Credit union respondents to NAFCU's latest Economic & CU Monitor survey are "hopeful" that new CFPB leadership will provide an opportunity for much-needed regulatory reform and relief.
According to respondents, the areas most in need of reform by the CFPB include:
- The Home Mortgage Disclosure Act (HMDA) rulemaking
- Unfair, deceptive, or abusive acts and practices (UDAAP) enforcement
- The qualified mortgage (QM) rule
While most credit unions are ready for HMDA implementation, according to NAFCU’s SeptemberEconomic & CU Monitor report, concerns about unnecessary reporting burdens still exist among survey respondents, NAFCU said.
Regarding UDAAP, two-thirds of survey respondents indicated that additional guidance is needed to articulate the CFPB's supervisory expectations. Furthermore, nearly 20% of survey respondents noted that the CFPB's use of its UDAAP authority in recent years has had a "chilling effect on their product and service offerings."
When asked about the CFPB's QM rulemaking, more than half of survey respondents said they have generally reduced their origination of non-QM loans and an additional 10% of credit union respondents have stopped originating non-QM loans altogether, NAFCU said.
Also included in the Economic & CU Monitor are the results from the January Credit Union Sentiment Index (CUSI), an index based on NAFCU member responses to eight questions on growth and earnings outlook, lending conditions and regulatory burden.
The CUSI declined slightly in January – primarily driven by a drop in growth outlook. The regulatory component of the index also saw a modest decline as respondents saw an increase in regulatory burden over the past year. However, the ratings gap between respondents' assessment of the regulatory environment over the past year versus their expectations for the next 12 months grew in January, showing optimism regarding the easing of regulatory burden. Respondents' scores in both the earnings and lending components of the index improved, NAFCU reported.