Credit Unions headed for heavy compliance hit in January

NAFCU’s Compliance Monitor highlights important 2014 compliance deadlines credit unions need to be prepared for, including the new CFPB mortgage reform rules and the recent NCUA final rule on liquidity.

Starting Jan. 1, credit unions will be busy meeting new compliance standards on CFPB’s loan originator rules and escrow requirements, as well as NCUA’s mandate to file quarterly call reports and profile data electronically.

Yet to be issued are CFPB’s final rules for initial and final disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act. In the meantime, here are CFPB rules credit unions must comply with by Jan. 10:

  • ability-to-repay requirements for mortgage loans and qualified mortgage rule (NAFCU has urged a delay of this rule);
  • Regulation X and Regulation Z amended with nine new mortgage servicing requirements;
  • restrictions on loan originator compensation and new training, certification and disclosure requirements for mortgage loan originators;
  • new requirements for the Home Ownership and Equity Protection Act of 1994 for high-cost mortgage loans; and
  • prohibition on financing of single-premium credit insurance on closed-end credit secured by a member’s dwelling.

As of Jan. 18, credit unions must comply with:

  • CFPB’s appraisal requirements for higher-priced mortgage loans; and
  • the bureau’s Regulation B disclosure requirement to inform applicants of the right to receive a free copy of any appraisals or other valuations performed in connection with their mortgage application.

IRS’s final rule on interest and dividend reporting and NCUA’s final rule on contingent liquidity also take effect next year.

As of March 15, credit unions must report to IRS dividend payments of $10 or more to all nonresident aliens made on or after Jan. 1, 2013. Under the NCUA liquidity rule, credit unions with $250 million or more in assets have until March 31 to apply to join the Central Liquidity Facility, seek access to the Federal Reserve’s Discount Window or both. Credit unions with less than $50 million in assets must have a written policy in place for managing liquidity, plus a list of contingent liquidity sources by this date.

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