ARLINGTON, Va.—Media coverage of the recently passed regulatory relief bill, S. 2155, has created confusion around some provisions that need clarification, according to NAFCU.
Among the issues around which there is confusion, says NAFCU:
- "Financial institution" definition under HMDA: NAFCU Vice President of Compliance Brandy Bruyere notes that S. 2155 does not change HMDA's definition of a financial institution, but rather adds a threshold for those that are required to collect and report certain HMDA data points added by Dodd-Frank. “Now, certain financial institutions – those that do not originate 500 closed-end mortgage loans or 500 open-end lines of credit – will not have to report as much data,” she said.
- MBL relief related to its cap, not maturity limits: Bruyere noted that S. 2155 removes certain loans – those that are fully secured by a lien on a one-to-four family dwelling that is not the primary residence of the member – from the statutory MBL cap. Bruyere added that the act does not raise the maturity limit for these loans. The NCUA has approved a rule to amend its member business lending rule to conform it to the law.
- New safe harbor category of qualified mortgages: S. 2155 adds another safe harbor category of qualified mortgages to the applicable section of the Truth in Lending Act (TILA). Bruyere explained that this new category applies to loans made by depository institutions with under $10 billion in assets when the loan meets certain conditions. Bruyere noted that regulatory clarification is possible related to required documentation.
- Foreclosure time period under the Servicemembers Civil Relief Act (SCRA): The change made to the SCRA by S. 2155 provides protection to servicemembers from foreclosure for a year (previously nine months) following active duty service, Bruyere explained.
- Elder abuse training required: S. 2155 carves out immunity from a civil or administrative proceeding for individuals who disclose suspected exploitation of a senior citizen to certain entities if specific conditions are met, including receiving training. It also provides content requirements for training, though Bruyere noted that regulatory guidance will likely be needed.
Bruyere writes that many of the changes made by S 2155 do not have clear effective dates "and will need to be implemented by regulators." She said NAFCU's compliance team will keep credit unions updated on these compliance deadlines.