Compliance Center: NCUA Releases Final Rule Amendments on Appraisals Involving Existing Loans
December 15, 2014
December 15, 2014
As part of the Regulatory Modernization Initiative, the National Credit Union Administration (NCUA) released final rule amendments to the NCUA’s appraisal rules.
The first change eliminates the now duplicative requirement that Federal Credit Unions (FCUs) provide any requesting member with a copy of the appraisal used in connection with the member’s application for a loan secured by a first lien on a dwelling. This provision is now covered by the CFPB’s Regulation B rules. The NCUA’s left provisions in 701.31(c)(5) that would still require FCUs to provide copies of appraisals upon request for member’s whose loan application was for a subordinate lien item.
The second revised provision will allow Federally Insured Credit Unions (FICUs) to refinance or modify an existing real estate-related loan without obtaining an appraisal if (1) there is no advancement of new monies; or (2) in transactions where there is an advancement of new monies, if there is no obvious and material change in market conditions or physical aspects of the property. In addition to achieving parity with banking regulations, the amendment gives FICUs more latitude to modify or refinance existing real estate loans for distressed borrowers without having to obtain a new appraisal.
Finally, the NCUA made minor technical changes to the definition of the term “application”.
Compliance Question of the Week
What can we do if a member has declared bankruptcy and the member only wants to reaffirm on one, but not all, of the loans the member has with us?
Reaffirmation is completely voluntary for both the member and the credit union. While the member does not have to reaffirm, the credit union can refuse to accept a reaffirmation that it does not like. If a member wants to reaffirm on the car loan so that she can keep her car, but the credit union wants her to reaffirm on both the car loan and the Visa, the credit union can reject the member’s offer to reaffirm on only the car loan. This is risky because the member might decide to reject this offer, and then the credit union will not have any reaffirmation. Of course, if the member does not reaffirm, the credit union can repossess the car. Using this tactic is a business decision on the credit union’s part.
National Credit Union Administration (NCUA)
The NCUA released its December 11, 2014 Board Action Bulletin which details the outcome of its most recent board meeting.
The NCUA has released the December 2014 issue of The NCUA Report.
NCUA Chairman Matz issued a statement stating that retailers and other third parties should be held accountable for data breaches that are caused by them. Matz noted that financial institutions are covering the actual costs of the data breaches and are not receiving reimbursement from the retailers that allowed the breach.
The NCUA released its Quarterly U.S. Map Review which shows that credit unions are experiencing accelerated loan growth.
Consumer Financial Protection Bureau (CFPB)
The CFPB announced that they have started a research pilot to analyze practices used to encourage savings habits.
The CFPB released a study it conducted on medical debt. The report shows that medical debt has a significant impact on consumer credit, prompting the CFPB to require the three major credit reporting agencies to provide reports to the CFPB on how consumer disputes are being handled.
National Automated Clearing House Association (NACHA)
NACHA issued a proposal and requested comment on a rule that would enable same-day processing of almost any ACH payment. Comments are due on February 6, 2015.
Federal Deposit Insurance Corporation (FDIC)
The FDIC has released the agenda for its December 16th Board Meeting.
Financial Crimes Enforcement Network (FinCEN)
FinCEN announced that it has again extended the timeline for Report of Foreign Bank and Financial Accounts (FBAR) filings.
Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of November 26, 2014. The last update prior to this was November 19, 2014.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.