KENNEWICK, Wash. —Endangered Small Credit Union Defense , formed to represent the interests of smaller credit unions, is urging the Consumer Financial Protection Bureau to provide regulatory relief tailored specifically to small credit unions, arguing that current mortgage lending requirements disproportionately burden smaller institutions.
In a comment letter dated July 10 responding to the CFPB’s request for information on promoting access to mortgage credit, ESCUD called for a series of changes it said would reduce compliance costs while preserving consumer protections.
The Recommendations
According to ESCUD, which is led by Doug Wadsworth, CEO of Tri-CU in Washington, its recommendations include:
- Explicitly including credit unions with less than $500 million in assets in any exemptions or tailored requirements under the TILA-RESPA Integrated Disclosure (TRID) rule.
- Replacing existing TRID timing requirements and fee tolerances with materiality-based standards that focus on actual consumer harm.
- Modernizing the mortgage right of rescission by creating exemptions or greater flexibility for portfolio rate-and-term refinancings and second mortgages, while expanding the use of electronic signatures and remote notarization.
- Simplifying fee tolerance requirements for low-balance mortgage loans.
- Raising the Home Mortgage Disclosure Act reporting threshold to 100 mortgage loans annually or exempting institutions with less than $250 million in assets, while excluding small home-equity loans from the reporting trigger.
- Expanding the Qualified Mortgage safe harbor for portfolio loans.
- Exempting credit unions with less than $500 million in assets from certain escrow requirements.
- Providing relief from Nationwide Multistate Licensing System requirements, including mandatory employee fingerprinting and placement of unique identifiers on all mortgage documents.
Supported by Data
ESCUD said its recommendations are supported by cost data and operational examples provided by small credit unions that endorsed the filing. The organization said it also distributed the comment letter to state credit union leagues and national trade associations, asking them to support the proposals.
In the letter, ESCUD said it is focused exclusively on advocating for the interests of small credit unions and encouraged additional institutions to endorse its efforts. The organization also urged state leagues to make the survival of small credit unions a higher advocacy priority, while thanking America’s Credit Unions, Defense Credit Union Council and the National Association of State Credit Union Supervisors for their communication and partnership over the past year.
Growing Membership
According to ESCUD, the organization now has 35 officially endorsing small credit unions representing approximately 200,000 members and more than $1.5 billion in combined assets, with additional endorsements being added each month.
One Response
There is not one thing on this list that shouldn’t apply to credit unions of all sizes. The case for and efficacy of consumer protection laws usbt based on a lender’s ability to absorb the cost of doing it. Either the reg makes sense and prevents harm or it doesn’t. Then, and association, with which you’d have to round up generously to say it is endorses 1% of the industry, says it “exclusively” represents small credit unions devds the memo the associations more or less an FYI. Maybe these 35 CU’s should try to convince the leagues and ACU these charges makes for everyone and get them to lobby for it and write letters. How does it help the industry to have a small (although admittedly very irrelevant) group basically just go donuts own thing?