MADISON, Wis.-Credit unions should be bracing themselves for a pending wave of new regulations.
That was the message during one session of CUNA Mutual's Online Discovery Conference during which. Lauren Calhoun, regulatory compliance manager, and Bill Klewin, director of regulatory compliance, reminded that "only" two mandatory compliance dates are coming in early 2013.
On Jan. 1, new address and website references must be implemented for many documents-including home equity brochures, list-based pricing notices and credit card disclosures-from the Federal Reserve to the Consumer Financial Protection Bureau.
On Feb. 7, 2013, all FIs that initiate more than 100 remittance transfers (defined as electronic transfers of funds of more than $15 sent from the U.S. to a designated recipient in a foreign country) in a calendar year must fill out disclosure forms.
'Mortgages, Mortgages, Mortgages'
"After those two dates, the next subject for credit unions to watch concerns mortgages, mortgages and mortgages," said Calhoun, who added the CFPB has released a breathtaking 3,500 pages of proposed mortgage regulations for seven proposed rules.
At issue are a number of topics, including expanding ability to repay requirements, escrow accounts for higher-priced mortgages, RESPA/TILA integrated disclosures, and changes to the definition of "finance charge."
Calhoun said credit unions also must be aware of SCRA, the Servicemembers Civil Relief Act.
"This brings increasing supervision and enforcement, so credit unions must ensure they are in compliance," she said. "It would be an absolute nightmare for a headline in a local paper to say a credit union is not protecting servicemembers."
Klewin said the next step is preparing for changes in the regulatory environment, and "realizing the complexity and depth of compliance changes will tax staff," he advised. "Compliance will be expensive, including monitoring, documents, IT costs, training and education, auditing and reporting."
The changes likely will have negative impact on member service, at least in the short run, Klewin said, because much of what was "convenient and familiar" will have to change.
"Credit unions will need to plan long term to deal with changes and uncertainty," he said.
Added Calhoun: "Credit unions need to focus on what they can control. They should comment on rules that are important to them, and they should spend the rest of this year and into 2013 preparing for the next changes."