WASHINGTON–Credit unions and the bankers have found two areas of agreement.
In Washington, America’s Credit Unions and the Independent Community Bankers of America have jointly sent a letter to Congress expressing “significant concerns” over the Renewing Opportunity in the American Dream (ROAD) to Housing Act, although they said the support the legislation overall.
As America’s Credit Unions noted, the bill is designed to increase housing supply and improve affordability. The legislation was voted out of the Senate Banking Committee and July, and its text was added to the Senate version of the National Defense Authorization Act (NDAA) and is under consideration for the final NDAA package currently being negotiated between the House and Senate.
Section 705 of the ROAD to Housing Act would amend Truth in Lending Act and force lenders to develop and apply additional, highly prescriptive reconsideration of value (ROV) processes to mortgage loans held in portfolio. This could ultimately impose operational and compliance burdens on small lenders that keep mortgages in portfolio, America’s Credit Unions said.
Avoid ‘Disproportionate Burdens’
“Our organizations urge Congress to work with stakeholders to refine Section 705 so that it achieves its intended purpose without imposing disproportionate burdens on our member institutions,” the letter reads. “We believe this can be achieved by targeting the requirements to loans sold to Fannie Mae, Freddie Mac, or mortgage loans insured or guaranteed by the Federal government. This approach would help the small local lenders continue to serve their customers by offering tailored loans to their customers without unnecessarily prescriptive operational ROV requirements.”
CU Groups Joins With Bankers in Amicus Brief
Separately, in New York, America’s Credit Unions and the New York Credit Union Association have joined with the American Bankers Association, Bank Policy Institute, and the Clearing House Association in filing an amicus brief Monday in support of Citibank’s appeal in a lawsuit related to liability under the Electronic Fund Transfer Act (EFTA).
As the CU Daily reported earlier, Citibank is appealing the District Court’s decision denying their motion to dismiss the case brought by the New York Attorney General against Citibank.
According to America’s Credit Unions, the legal action supports Citibank’s position, arguing that the Uniform Commercial Code covers online wire transfers instead of the EFTA as asserted by the NYAG’s lawsuit.
Additional Points
In addition, the amicus brief filed with the Second Circuit reiterates an amicus brief filed by the group in the initial case, arguing that expanding the EFTA to include such transfers is contrary to decades of case law and regulatory guidance, America’s Credit Unions added.
According to the groups, such a change would force banks and credit unions “to scramble to determine their legal obligations and to expend a tremendous amount of time and resources to reorganize their operations that had been built on a decades-old doctrinal foundation.”
In a statement, America’s Credit Unions said a “seismic shift in the regulatory treatment of wire transfers could force some credit unions to stop offering wire transfers altogether, which would have a negative impact on consumers.”
