Are we sprinting to the finish line or running for the hills?

The stopwatch is ticking away. There’s only about two and a half months left before the implementation date on the new CFPB rules. There’s lots of uncertainty and the most remains around the Ability to Pay and the Qualified Mortgage Rule. As I talk with Credit Unions, they still have lots to do and decisions to make. All of us seem to be waiting on our software providers to update their systems. And we’re all waiting on the GSEs to see how the underwriting engines work going forward. We should be, and many are, sprinting towards the compliance finish line. But are we sprinting or just running for the hills?

CUNA recently did a survey to see how ready Credit Unions are for the new regulations and it doesn’t look like we’re near the finish line. Three in five of responding credit unions have determined they will be forced to discontinue, delay or reduce their mortgage loan product offerings because of the regulatory changes.

That’s 60%! It sounds like these Credit Unions aren’t in a sprint to the finish line, but instead running for the hills to seek shelter. And that certainly ain’t memberlicious.

In addition, about half of credit unions still have not made a decision as to whether they will offer non-QM loans, write only QM loans – or reduce the number of non-QM loans being made to members.

So I’m making an assumption that most of these are smaller or mid-size Credit Unions and maybe that’s unfair. I’m not going to pretend I fully understand what’s it’s like to work for one of these cooperatives as it was a long time ago that I worked for a $100 million Credit Union. But I do know that at smaller shops, leaders were lots of hats. My current Credit Union is big and we’ve got lots of people and resources to tackle compliance challenges. We’re sprinting and will cross the finish line as long as the software is ready.

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