Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
Closed-end mortgage disclosure rule excessive--CUNA
WASHINGTON (12/28/09)--Commenting on the Federal Reserve Board’s proposed revisions to Regulation Z requirements for closed-end mortgage loans, the Credit Union National Association (CUNA) said it “generally supports disclosures that are helpful for consumers,” but added the disclosure requirements under this proposal are excessive and “would be overwhelming for consumers.” CUNA noted that providing more streamlined information “may actually be preferable if it is carefully targeted to the needs of consumers who apply for mortgage loans.” Portions of the new Fed rule would require changes in the format and timing of the required disclosures and would prohibit certain payments to mortgage brokers and loan officers that are based on the loan’s terms or conditions. However, CUNA argued, these rules should not apply to credit unions because “compensation systems for credit union employees have worked well, without abuse, and credit union employees were not the cause of the problems that these provisions are intended to address.” The Fed rules would seek to address many questionable lending practices, including instances where lenders have provided high-cost and abusive loans to unsuspecting borrowers. CUNA is also concerned about provisions that would require more finance charges and fees to be included within the annual percentage rate (APR) calculation. This would increase the overall annual percentage rate (APR) attached to a loan and may cause consumers to believe that the increase is due to a change in credit union business practices, rather than a change in how the APR of a given loan must be disclosed. “The preferable approach would be to require disclosure of the interest rate and disclosure of the finance charge in dollar terms, which will be easier for borrowers to understand and easier for lenders for purposes of complying with these requirements,” CUNA added. “Based on their relationships with their members, credit unions strongly believe these additional and enhanced disclosures are for the most part unnecessary, and the resulting confusion will actually thwart the goal of this proposal, which is to provide useful information for consumers,” the comment letter added. CUNA urged the Fed to “substantially revise the proposal” and “conduct additional consumer research as part of this process prior to issuing a rewritten proposal.” For the full comment letter, use the resource link.


RSS





print
News Now LiveWire
.@CFPB Director Richard Cordray's testimony that he will deliver before the #HFSC this afternoon. http://t.co/NA1aEOPAeh
1 hour ago
Consumer spending flatlines, savings ramp up #Market #NewsNow http://t.co/94kPuBpMRK
2 hours ago
.@Cornerstone_CUL in 2014: $9K in savings per member #NewsNow #CUSystem http://t.co/7LnsV876cs
4 hours ago
RT @CUNA: Bill to codify #creditunion Advisory Council, is introduced by @reppittenger @RepDennyHeck HT @newsnowlivewire http://t.co/0zviXx…
4 hours ago
Construction spending drops in January, according to @CommerceGov http://t.co/W9J1mDyF8X #Market #NewsNow
21 hours ago