NAFCU Letter to CFPB Regarding Tomorrow’s Field Hearing

January 16, 2013

The Honorable Richard Cordray
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

RE: Mortgage-Related Rules – January 17, 2013 Field Hearing

Dear Director Cordray:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I would like to submit this letter for the record in connection with the Consumer Financial Protection Bureau (CFPB) January 17, 2013 field hearing, to be held in Atlanta, Georgia.

First and foremost, I want to thank you for your comment at the January 10, 2013 Field Hearing wherein you stated:

“While working on the Ability-to-Repay rule, we came to another important recognition.  Many have said, including myself, that community banks and credit unions did not cause the financial crisis.  Their traditional model of relationship lending has been beneficial for many people in rural areas and small towns across this country ….  They find ways to make loans that respond to personal situations and cannot be captured by any generic metrics.  They depend on keeping a good reputation in the community, and they often hold those loans in their own portfolio.  Accordingly, they have strong incentives to pay close attention to the borrower’s ability to repay.

So today we will also be proposing a further adjustment to the Ability-to-Repay rule to create a special category of Qualified Mortgage loans made by smaller lenders such as community banks and credit unions … We look forward to considering your feedback, which has been so helpful to us in resolving the many difficult challenges posed by the Ability-to-Repay rule.”

In keeping with your remarks, I request that you ensure that the CFPB uses any and all authority and power it has to ensure its various mortgage-related rules have as little impact on credit unions as possible.  Each of these rules will have tremendous unwanted impact on credit unions and their 95 million members, and will make mortgage lending unnecessarily far more strenuous and costly both for credit unions and their members.  In particular, I again urge you to consider carefully the CFPB’s obligations under the Small Business Regulatory Enforcement Fairness Act (SBREFA) in regards to the agencies’ rules’ impact on small entities.

We thank you for your time and the opportunity to submit this letter as part of the official record of the January 17, 2013 field hearing.  If you have any questions or concerns, please feel free to contact me at (703) 842-2215 or Tessema Tefferi, Senior Regulatory Affairs Counsel, at (703) 842-2268.


Fred R. Becker, Jr.
President and CEO

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