December 19, 2012
The Honorable Richard Cordray
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552
RE: Effective Dates of Mortgage-Related Rules
Dear Director Cordray:
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 much-anticipated upcoming final rules on various mortgage-related issues. In particular, I am writing to respectfully request that the Consumer Financial Protection Bureau (CFPB) provide credit unions adequate time to implement each of these rules.
As NAFCU has discussed in our comment letters to the CFPB regarding qualified mortgages, mortgage servicing, high-cost mortgage loans, loan originator compensation and appraisal reforms, it is pivotal that the CFPB’s final rules in each of the respective rulemakings provide credit unions ample time to implement the regulations. Each of these rules is very likely to be burdensome independently; however, with all five expected to be issued before January 21, 2013, credit unions will face unprecedented challenges to digest, understand and implement the regulations.
NAFCU believes that the CFPB does have the discretionary authority to provide much longer than the publically stated 12 months for one or more of the final rules. While we understand that Title XIV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provides a set effective date for the agency’s “qualified mortgages,” the CFPB can assert its greater discretionary rulemaking, examination and supervisory authorities to determine that 12 months is an inadequate period for financial institutions to effectively implement the regulations. In fact, NAFCU believes that this short period could lead many financial institutions to improperly implement the regulations, thus diminishing the statutory purposes underlying the regulations.
Alternatively, the CFPB could use its broad authority to consider the regulatory burden on small entities and provide an extended effective date for all credit unions. As we have stated on numerous occasions, Congress granted the CFPB this authority with the understanding that small entities will be disproportionately affected by the agency’s extensive regulations issued pursuant to the Dodd-Frank Act. NAFCU believes that the issue of the effective dates of these rules is well within the scope of the agency’s discretionary authority related to small entities.
As you consider our request, we also ask that you contemplate the interplay between the various mortgage rules that the agency will be finalizing next month and the mortgage disclosure rules integrating the Truth-in-Lending Act and Real Estate Settlement Procedures Act (RESPA) disclosure forms. The agency has indicated that it will likely issue a final rule on the combined mortgage disclosures in the summer of 2013. Thus, it would be helpful to credit unions, and ultimately their 94 million members, if the CFPB delays the determination of the effective dates of the mortgage rules due in January until it finalizes the combined mortgage disclosure rules.
NAFCU appreciates your attention to this matter. We would be happy to discuss this further with you or appropriate CFPB staff at your convenience. If you have any questions or concerns, please feel free to contact me at (703) 842-2234 or Tessema Tefferi at (703) 842-2268.
Sincerely,
Carrie Hunt
General Counsel and Vice President of Regulatory Affairs