ARLINGTON, Va.—CFPB rulemaking is reducing credit union revenue and taking money out of members’ pockets.
Among the findings in NAFCU’s January Economic & CU Monitor, the monthly survey of the trade association’s membership, the CFPB’s qualified mortgage rule is cutting back on CU mortgage originations, and the bureau’s remittance disclosure requirements are passing on costs to members.
With CFPB’s qualified mortgage rule in effect for one year now, survey respondents indicated that it is having a large impact on lending, with more than half either reducing their originations of non-QM mortgages (30.4%) or ceased to originate non-QM loans altogether (21.7%),
Many survey respondents (60%) indicated that the cost of providing remittance services had increased due to the CFPB’s disclosure requirements, indicating that those costs have been passed on to their credit union’s members.
CU’s that process fewer than 100 remittances per year are exempt from CFPB’s rule. Raising that threshold would encourage one in six survey respondents (16.7%) to either re-enter the market or process more remittances.
On the positive side of CFPB rulemaking, a majority of respondents (56.3%) said a new rule from CFPB allowing qualified financial institutions to post annual privacy notices online rather than delivering them individually will offer them substantial regulatory relief.
Other survey highlights:
- Based on survey data, credit union member growth in November remained at 3% year over year.
- Share growth fell to 3.6% year over year.
- CU aggregate net worth ratio declined by five basis points to 10.91% in November.
- Loan growth increased to 10.6% year over year.
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