Compliance Center: DCU Guidance on State Mandated Disclosure Summary

The Washington State Department of Financial Institutions (DFI) has issued Division of Credit Unions Interpretive Letter I-14-05 because some state chartered financial institutions may still be using an unnecessary separate “disclosure summary” for family residential home loan applications.

The “disclosure summary” was originally required when RCW 19.144.020 was enacted in 2008.  During the 2012 state legislative session, the legislature reasoned that this separate disclosure summary was no longer necessary if mortgage lenders were in compliance with the Federal disclosures under TILA and RESPA.

Accordingly, the Washington State Legislature amended RCW 19.144.020 as follows:

(4) Disclosure in compliance with the real estate settlement procedures act, 12 U.S.C. Sec. 2601 [sic], and Regulation X, 24 C.F.R. Sec. [sic] 3500, as it exists on the effective date of this section, shall be deemed to comply with the disclosure requirements of this section. If needed, the director may adopt rules to implement and incorporate other changes in the disclosure summary as necessary due to federal law. 

With the combined TILA/RESPA disclosure requirements going into effect in August of this year, the DFI has concluded that:

Therefore, the Director of the Division of Credit Unions determines that the separate “disclosure summary” described in subsections (1) and (2) of RCW 19.144.020 is no longer required if the proper CFPB TILA/RESPA disclosures are made. This interpretive statement has general applicability for all Washington State-chartered banks, savings banks, credit unions, and for any third-party forms vendors, or any parties similarly situated.

Compliance Question of the Week

What are the requirements in Oregon and Washington to maintain your exempt status from certain parts of the Foreclosure bills?

In Washington, in order to be exempt from the mediation and/or fee requirements under the Foreclosure Fairness Act, a credit union must certify that they completed less than 250 foreclosures in the preceding calendar year and/or sent 250 or less notices of default. If the credit union does fall into one or both of these categories, they can fill out the applicable form(s) (available in InfoSight) and send them to the program manager at:

Foreclosure Fairness Program Manager
Washington State Department of Commerce
CSHD/Public Safety Unit
P.O. Box 42525
Olympia, WA 98504-2525

The forms must be received no later than January 31st of the following year.

Example: To certify that your credit union did not complete over 250 mortgages from January 1, 2013 through December 31, 2013, the form must be filled out and sent to the program manager no later than January 31, 2014.

In Oregon, in order to be exempted from the mediation requirements, a credit union will need to certify that they completed less than 175 foreclosures in the previous calendar year. The model forms for this exemption are available in InfoSight.

Once the form is completed, it should be sent to:

Oregon Foreclosure Avoidance Program
Oregon Department of Justice
1162 Court Street NE
Salem, OR 97301-4096

The form should be received no later than January 31st of the following year.

In Idaho, credit unions are exempt from the Consumer Foreclosure Protection Act

Related Links:

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced the release of a new video that focuses on field of membership options and strategies.

Consumer Financial Protection Bureau (CFPB)

The CFPB released a report on the Military Lending Act and the deficiencies discovered by the CFPB. The report highlights the high interest rates charged by some lenders.

Federal Reserve Bank (FRB)

The FRB has released its 4th quarter Consumer Compliance Outlook.

Federal Financial Institutions Examination Council (FFIEC)

The FFIEC has released the HMDA data entry software for 2015.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of January 2, 2015. The last update prior to this was December 23, 2014.

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, Federal.