By Vicki Needham

Financial institutions are pressing Congress and federal regulators to scale back sweeping new mortgage rules for fear they could impede the housing market’s recovery.

Credit unions in particular are seeking an exemption from the regulations and have asked Congress to protect them from punishment while they work to comply with the more than 5,000 pages of rules.

They say their low delinquency and default rates should be all the evidence that the Consumer Financial Protection Bureau (CFPB) needs to carve them out of the qualified mortgage rules.

The Credit Union National Association (CUNA) on Monday suggested that Congress take a closer look at any legal liabilities that could arise as financial institutions put the new rules into practice.

Many credit unions have indicated they would not be able to comply with the regulations on time.

To that end, the CFPB has said it is taking a light-handed approach by issuing warnings rather than penalties as the industry adjusts.

In remarks last year to the American Bankers Association, CFPB Director Richard Cordray noted that the agency had published detailed examination procedures for the rules six months before they were to take effect so that no one would be caught by surprise.

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