Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Dodd-Frank could mean mortgage costs for CUs GAO
WASHINGTON (9/14/12)--While the majority of the Dodd-Frank Wall Street Reform Act's regulatory changes is aimed at large, complex financial institutions, portions of the act addressing mortgage reforms "may impose additional requirements and, thus, costs" on credit unions and other financial institutions, the U.S. Government Accountability Office (GAO) has said.

The impact of these mortgage reforms, though, depends on the results of future rulemakings, the GAO said. The GAO report, entitled "Community Banks and Credit Unions: Impact of the Dodd-Frank Act Depends Largely on Future Rule Makings," found that finance industry representatives are particularly concerned that Dodd-Frank regulatory changes imposed by the Consumer Financial Protection Bureau (CFPB) may force firms to exit certain lines of business.

The GAO report was compiled through data analysis, study reviews and interviews with credit unions, banks and state and federal regulators.

The additional time, resources, and effort it would take their institutions to address new regulatory requirements was a chief concern. Some also said the standardization of processes through CFPB regulations could reduce the ability of community banks and credit unions to offer differentiated products to better serve their communities.

The GAO noted that some regulators and industry representatives expected the potential cumulative effect of CFPB mortgage reforms to decrease lending practices. The mortgage reforms could also reduce community banks' and credit unions' advantages in rural communities and other niche markets.

However, some of these regulatory burdens could be relieved if the CFPB used its full exemption authority, the GAO said. In addition, several Dodd-Frank provisions, including deposit insurance reforms, Sarbanes-Oxley Act exemptions, and the CFPB's pending supervision of nonbanks, "could reduce costs and/or help level the playing field for community banks and credit unions," the GAO said.

Overall, the report noted, "it is too soon to determine the Dodd-Frank Act's overall impact on small business lending," as much of the work asked of the CFPB and other regulators has not been completed.

The CFPB and the National Credit Union Administration generally agreed with the report, the GAO said.

For more on the report, use the resource link.
Other Resources

RSS print
News Now LiveWire
Of $1.3B in payments through mobile devices, 90% occurred at @Starbucks stores http://t.co/MN49JR1NXK
10 hours ago
.@LoveBethpage 1st to launch mobile debit/credit card control from @COOPFS http://t.co/kuq7onGuai
11 hours ago
A booming W Okla county gets its first #creditunion @TheHEFCU See #NewsNow http://t.co/svTyMnms0X
13 hours ago
Mortgage interest rates continue slide in September @FHFA http://t.co/agU9RJW5Kq
16 hours ago
Reimagined branches shift to member, not #creditunion, needs: @cunacouncils white paper http://t.co/lN2mu0IVar
17 hours ago