LAKE MARY, Fla.-The confirmation of Richard Cordray to director of the Consumer Financial Protection Bureau adds some certainty to the compliance picture ahead, including that the clock is ticking on a host of new mortgage compliance rules taking effect in January.

"This adds more clarity going forward," said Tammy Campbell, senior compliance officer for Harland Financial Solutions. "Cordray's confirmation assures the CFPB will remain in its current structure for the foreseeable future and rules will stay in place."

That includes five of the CFPB's seven new mortgage compliance rules taking effect January 2014: Ability-to-Repay, High-Cost Loans and Homeownership Counseling, Mortgage Loan Originator Compensation, Mortgage Servicing and Reg B Appraisals, and Higher-Priced Mortgage Loan Appraisals. Campbell reminds that these rules are complicated and vast. "And we also get clarifying rules after the fact."

Campbell recognizes that small credit unions are often challenged to decipher the rules and determine their application, such as small creditor exemptions and where the CU fits within those exemptions. "At Harland we have a staff of several full-time attorneys going through these rules. With small credit unions it's often just the CEO, who is already wearing several hats. They often can't even afford to have one full-time compliance person, and sometimes that is not enough."


Lean On Partners

Campbell urged small credit unions to lean on partners and compliance services they can trust to help them dig through the new rules' "mumbo jumbo and get down to what they need to do."

What's coming next year will impact more than staffing needs. The new rules affect systems-a lot of time and money, insisted Campbell. "For example, the new periodic mortgage statement has been completely reformatted. Very specific information has to appear on the monthly statement. Most credit unions were probably not even providing these statements, and probably combining them with other statements."

Based on anecdotal evidence, Campbell thinks many smaller credit unions are not completely prepared for all the rules hitting in January.

"In talking to small credit unions about the depth and breadth of these new rules I often get surprised looks. Even the nitty-gritty details they often find surprising."

Larger CUs, Campbell, said, have more bandwidth to handle the new rules. "Plus they know they are often too big for the small creditor exemptions."


Fun! More New Regs

Besides mortgage lending rule requirements coming soon, CUs have to stay ahead of the new regs related to international funds transfers hitting in October 2013, insisted Campbell, who is also worried all the new regs could take credit unions' eyes off of some important things, especially mobile banking fraud.

"With all this regulatory churn going on along with the rush into the mobile space, it could be easy to not give mobile banking fraud enough attention," she observed.

"This is a growing area that many credit unions are moving quickly to get into due to their neighbor coming out with new apps. I am not saying credit unions are overlooking this area, but mobile fraud is expanding and with all that the credit union has to cope with in the way of compliance they could take their eye off the ball here."

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