What I Learned at Compliance School
October 11, 2012
October 12, 2012
By David Curtis, Director of Compliance Services, NWCUA
After spending a week in September at “The Happiest Place on Earth” for Compliance School, it is time to reflect on what I learned during the sessions. While there was a lot of good information, some particular items stood out for me. Some of the ideas covered were new to me, but others just reinforced what I already know.
A lot of time was spent talking about the CFPB, and here were some of my takeaways:
- The CFPB currently has 40 lawyers whose jobs are to write the regulations required by the Dodd-Frank Act. Once they have completed that task, the CFPB still has 40 lawyers whose job is to write consumer protection regulation. The regulatory burden and pace of changes is not going to slow down anytime soon.
- While the CFPB has repeatedly stated that they would consider safe harbors that help credit unions, it is going to be more important than ever for credit unions to comment on proposed regulations. The comments need to provide real life examples of how the proposed regulation will affect the credit unions operations. For example, “Due to the regulatory burden of the remittance transfer rules, we will need to discontinue the program due to costs.”
In addition, we reviewed the remittance transfer rules.
- Since the remittance transfer rules are part of regulation E, the rules apply to any remittance transfer provided for a consumer. The rules do not apply to business member transactions. Credit unions need to only count consumer remittance transfers to see if they fall under the 100 remittance transfers per year safe harbor.
- Under the remittance transfer rules, the only person who has a right to file a complaint with the credit union regarding the transfer is the sender. The receiver does not have the right to complain.
- Remittance transfer disclosures must be in at least 8-point font.
- Because of the 30-minute cancelation provision, credit unions should establish a cut off time for remittance transfers—say, 1 hour prior to closing. This allows enough time to cover the 30-minute cancelation window and still be able to stop the transfer from going out.
And we talked about all of the currently proposed rules from the CFPB. If I went into detail, this article would be extremely lengthy, but here are a couple of highlights.
- The mortgage servicing rules with the new periodic statement requirement will probably mean the end of credit unions providing mortgage information on the combined statement. The timing requirement will probably trip you up.
- Start working early with your statement processors. There are major changes, including some dynamic fields, and yes, tables that will need to be on the new statements. We all remember how difficult it was to get a box with month and year to date NSF and OD fees on our account statements. Everyone is going to be going to their vendors to get these changes made. Having that discussion sooner is much better than later.
- There are new contact requirements for delinquent borrowers. Your collections department should be brought into the loop about the changes that will most likely be dropped on them.
- Keeping HOEPA, HPML, and HRML straight in your head is not easy.
Other topics included a discussion about identity theft and fraud. After that class, I’ve come to the realization that I’m not paranoid enough.
All in all, it was a good week of learning and meeting with our peers who have the wonderfully sexy duty of compliance in their job descriptions.
Questions? Contact the Compliance Hotline: 1.800.546.4465, email@example.com.