ARLINGTON, Va.—NAFCU has sent a comment letter to the Consumer Financial Protection Bureau (CFPB) regarding proposed changes to the collection and reporting requirements under the Home Mortgage Disclosure Act that would amend Regulation C.
While saying it supports HMDA’s intention of promoting fair lending and ensuring that consumers receive equitable access to credit in the housing market, NAFCU said it also continues to “maintain that the tidal wave of the Bureau’s new regulations, taken individually, and more so in their cumulative effect, have significantly altered the lending market in unintended ways.”
“In particular, the ability-to-repay, qualified mortgage, and mortgage servicing rules have required credit unions of various sizes and complexities to make major investments, and incur significant expenses,” said NAFCU in its letter. “Taken all together, these regulations have made credit unions rework nearly every aspect of their mortgage origination and servicing operations. As proposed, the changes to HMDA collection and reporting would require even more reworking and additional expense.”
The trade group said it does not believe the CFPB has given adequate consideration to the burden that the proposed rule would have on small entities, and that it has “significant concerns” about the proposal because we believe it will disproportionately impact small financial institutions that were not responsible for the financial crisis.
The CFPB’s proposal would expand the scope of reportable transactions to include all closed-end loans, open-end lines of credit, and reverse mortgages secured by dwellings, regardless of the purpose of the loan or line of credit. This proposed coverage test would bring HELOCs within the scope of reportable transactions, thus making their reporting mandatory. Unsecured home improvement loans, however, would no longer be reported.
NAFCU said it strongly supports eliminating the requirement to report unsecured home improvement loans, but it has “concerns” with the inclusion of HELOCs within the scope of reportable transactions.
NAFCU raised concerns over a number of other issues, as well, including data collection and privacy.
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