May 23, 2013
Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street, N.W.
Washington, D.C. 20220
RE: Docket No. CFPB-2013-0013; RIN 3170-AA37; Delay of Effective Date for
Credit Insurance Provision in Loan Originator Compensation Rule
Dear Ms. Jackson:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I write to you regarding the Consumer Financial Protection Bureau’s (CFPB) proposed rule regarding the delay of the effective date of a recently prescribed provision in Regulation Z, 12 CFR § 1026.36(i), concerning the prohibition on financing credit insurance premium in connection with certain transactions secured by a dwelling. See 78 Fed. Reg. 27308 (May 10, 2013).
The proposed rule would delay the effective date of a provision in the CFPB’s recently-issued rule on loan originator compensation. The provision addresses the prohibition on financing credit insurance premiums or fees in connection with residential mortgage loans and open-end credit secured by a principal dwelling. The prohibition applies to most insurance products issued in connection with such mortgage transaction; however, it does not apply to (1) credit insurance for which premiums or fees are paid in full on a monthly basis, or (2) credit unemployment insurance for which premiums or fees are reasonable.
NAFCU supports the delay of the effective date of Section 1026.36(i). We strongly urge the CFPB to delay the effective date of the section to at least January 10, 2014. Delaying the effective date to January 10, 2014 will provide the CFPB time to provide clarity on the issues and credit unions with additional time to work with partners and third party providers to ensure that payments for any affected products in connection with their mortgages do not violate the regulation. Delaying the provision to January 10, 2014 will also make it consistent with the effective date of all but one provision of the CFPB’s loan originator compensation rule.
NAFCU appreciates the opportunity to comment on this proposed rule. If you have any questions or concerns, please feel free to contact me at (703) 842-2268 or ttefferi@nafcu.org.
Sincerely,
Tessema Tefferi
Senior Regulatory Affairs Counsel