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Separate CU scrutiny needed for TILA-RESPA form CUNA
WASHINGTON (5/6/11)--The Credit Union National Association (CUNA) underscored the credit union difference in a recent comment letter submitted to the Office of Management and Budget (OMB) and the Consumer Financial Protection Bureau (CFPB). The CFPB transition team is seeking OMB approval to conduct a study to gain consumer and mortgage industry perspectives on a draft form that combines mortgage disclosures under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The combined form is required under the Dodd-Frank Actand and is intended to reduce mortgage lender regulatory burden and make mortgage disclosures less confusing to consumers. CFPB has proposed to conduct one-on-one interviews regarding its draft version of the combined TILA-RESPA form with consumers and representatives of mortgage lenders and mortgage brokers. CUNA urged, however, that the CFPB outreach include a separate interview panel comprised solely of credit union lending professional. CUNA wrote that credit unions--as not-for-profit cooperatives organized to promote thrift and make loans to members at reasonable rates of interest--are different from for-profit banks and non-depository mortgage lenders, as well as different from mortgage brokers. CUNA also recommended that once the proposed impact study is completed and changes are made to the draft form, a revised draft of the mortgage disclosure form should be subject to additional CFPB outreach to credit unions and other small financial institutions. This subsequent review should be conducted under provisions of Dodd-Frank that made the CFPB subject to the Small Business Regulatory Enforcement Fairness Act (SBREFA) panel outreach process. A SBREFA panel, comprised of one representative each from CFPB, OMB, and the U.S. Small Business Administration’s Office of Advocacy, is required by Dodd-Frank to solicit input from small entity stakeholders prior to the issuance of a CFPB proposed rule that would impact a significant number of credit unions and community banks. The panel is charged with making recommendation to CFPB on how to reduce regulatory burden on small entities. See the resource link below for the Comment Letter.

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