Some credit union trade groups are claiming a victory in the ongoing battle against the Consumer Financial Protection Bureau, but not everyone is pleased with the result.
On Monday, CFPB Director Richard Cordray pledged the bureau would issue a new proposal raising the home equity line of credit reporting threshold to exempt institutions that originate fewer that 500 HELOCs in either of the last two years from reporting requirements, a five-fold increase over the current threshold.
The proposal is set to be issued within the next two weeks and will apply to reporting for 2018 and 2019, according to a letter Cordray sent to several senators.
Credit union trade groups have pushed the bureau to raise the threshold required under the Home Mortgage Disclosure Act. According to Credit Union National Association, 23 percent of credit unions currently offering HELOCs indicated they planned either to curtail their HELOC offerings or stop offering them entirely as a result of burdensome compliance requirements.
In his letter, Cordray wrote that “Temporarily increasing the HELOC threshold in this way will give small institutions additional relief and provide the Consumer Bureau ample opportunity reconsider the HELOC threshold contained in the final rule and decide where it should be beginning in 2020.”
Among those praising the bureau for its move was the Cooperative Credit Union Association, which serves credit unions in Delaware, New Hampshire, Rhode Island and Massachusetts, and which has
“I commend the CFPB for recognizing the burden the low 100 HELOC threshold would have on smaller institutions,” CCUA President and CEO Paul Gentile told CU Journal. “This is a step in the right direction for reasonable regulatory relief. Many smaller credit unions would have to change loan systems or add systems simply to comply with the HELOC reporting requirement. The CFPB has recognized this burden on smaller institutions.”
CCUA had previously recommended the bureau raise the threshold from 100 loans to as high as 2,000 loans, but said in a statement that “any relief in this area is supported.” Gentile urged Cordray and the CFPB to establish a second comment period for the final rule due to the number of issues that remain unaddressed.
Not all groups, however, were as effusive as CUNA and CCUA.
"While we support increasing the threshold for HELOCs, this does not go nearly far enough," said Brandy Bruyere, VP of regulatory compliance at the National Association of Federally Insured Credit Unions. "Credit unions need more time to comply, especially since the bureau has yet to finalize the technical amendments it proposed in April. This leaves credit unions in limbo by delaying systems upgrades that are critical for training and preparation. Overall, an implementation deadline extension of at least one year is needed."
Updated at 9:15 a.m. on July 12, 2017
