Regulatory Advocacy Update: Association Weighs in on Important Proposals

With the one-year Anniversary of the Dodd-Frank Act and the much-awaited Consumer Financial Protection Bureau (CFPB) coming online, the regulatory world continues to change rapidly.

The Northwest Credit Union Association (NWCUA) has been monitoring and weighing in on proposals with potential impact on the credit union industry, continuing to carry the message that the ever-increasing regulatory burden is harmful for the industry.

Qualified Residential Mortgages

The Association voiced concerns about a joint-agency proposal on Credit Risk Retention establishing strict Qualified Residential Mortgage (QRM) standards. If adopted the proposal could set a negative precedent and eliminate potential borrowers from the mortgage market. Just as the housing market is beginning to recover, restricting the flexibility of lenders to work with borrowers to find the best market solutions could exempt many potential borrowers from entering the housing market, cooling any burgeoning market recoveries.

While not directly impacting credit unions at this point, the QRM standard as drafted could negatively impact all arenas of mortgage lending in the future. The Association urged the Agencies to reconsider these restrictions.

The full letter can be found here.

International Remittance Transfers

The Association recommended the Federal Reserve Board remove “open network” remittance providers from consideration under a recent proposal. This proposal would require disclosures from providers of remittance transfers of specific information such as total funds to be received, taxes, and fees prior to the transfer of funds.

This regulation was tailored to changes needed within “closed network” transactions—those that are performed by providers such as Western Union and VIGO—where funds can be directed through private contractors and agents. The Association stated, “…an open network uses intermediary institutions to transfer funds. These intermediaries are not subject to U.S. law and the sending institution has no control over the routing of funds. The independent intermediaries may apply their own taxes, fees, or exchange rates…”

The NWCUA urged the CFPB, which will ultimately be implementing the regulation, to exempt open network providers from this rulemaking. If upon further review it finds additional regulations are required, we would recommend that further study and discussion be done around what is appropriate for open network transactions.

The full letter can be viewed here.

Regulation Z – Ability to Repay a Mortgage

The NWCUA urged caution on proposed changes to the Truth in Lending Act. Developed by the Federal Reserve board to be implemented by the CFPB, this proposal would put into place criteria that could constrict the ability of lenders to serve borrowers’ needs. Because most credit unions already approach compliance with these proposed regulations, the Association urged “caution in over-regulating and increasing the compliance burden for small lenders.”

The NWCUA urged regulators to ensure that requirements not become too rigid as “credit unions are often seen as more flexible lenders, willing to take a closer look at borrowers rather than simply passing their information through a one-size-fits-all process.”

The full letter can be viewed here.

Upcoming & Archived Proposals

The onslaught of new regulatory changes does not seem to be lifting soon, especially as the CFPB comes online and begins to crank out new proposals. To keep an eye on the latest proposals and offer your comments, visit the Association’s Current Comment Call page.

Visit the Association’s Comment Letter Archive where past letters and commentary can be found.


Questions? Contact Director of Regulatory Advocacy Jaycee Winn: 503.350.2209,

Posted in NWCUA.