Compliance Outlook2012 Fourth Quarter2013 First Quarter

Program OverviewFourth Quarter 2012• Troubled Debt Restructuring• S.A.F.E. ACT• Unlimited Share Insurance Coverage

First Quarter 2013• CFPB• NCUA

Troubled Debt Restructures• Eliminates dual tracking• Calculate delinquency based on modified loan terms• Nonaccrual on loans > 90 days past due• Policies & Procedures

http://www.ncua.gov/about/Documents/Agenda%20Items/AG20120524Item3b.pdf

S.A.F.E. ACT• Registration Renewal• Annual Audit• Federally Insured CUs – no CE

Training• CU not Federally Insures – required

CE Traininghttp://www.ncua.gov/Resources/CUs/Pages/SAFE.aspx

NCUA Share InsuranceUnlimited Share Insurance ENDS

Recommendations:• Determine affected

accounts• Communicate change• Update disclosures

December 31, 2012

http://www.ncua.gov/Resources/CUs/Pages/SAFE.aspx

Looking Ahead to 2013CFPB NCUA

• High Cost Mortgages• Escrow Requirements• Ability to Repay• Servicing

• Small Credit Union Rule

• Low Income Designation

• CU Troubled Condition

CFPB – High Cost MortgagesCovered Loans:• Secured by principal

dwelling• Purchase money

mortgages• Refinances• Close-end home

equity loans• Open-end credit

plans

Rule effect:• Ban balloons and prepayment

penalties;• No loan modification and

payoff fees;• Late fee capped at 4%; and• Prohibits lenders from rolling

closing costs into the loan amount.

http://www.consumerfinance.gov/regulations/high-cost-mortgage-and-homeownership-counseling-amendments-to-regulation-z-and-homeownership-counseling-amendments-to-regulation-x/

CFPB – Escrow Accounts

Exemption:• Serve rural & underserved areas• Assets < $2 billion• Originate < 500 first lien mortgages

AND• Not escrow currently

Escrow accounts must be established on Higher-priced mortgage loans and maintained for at least 5 years.

http://www.consumerfinance.gov/regulations/escrow-requirements-under-the-truth-in-lending-act-regulation-z/

CFPB – Ability-to-RepayCredit Unions must consider 8 underwriting factors:

1. Current income or assets2. Current employment status3. Monthly payment on loan4. Monthly payment on other loans5. Payments on related obligations6. Current debt obligations7. Monthly debt-to-income ratio / Residual income8. Credit History

http://www.consumerfinance.gov/regulations/ability-to-repay-and-qualified-mortgage-standards-under-the-truth-in-lending-act-regulation-z/

CFPB – Servicing RulesFinal Rules Cover Nine Topics:

1. Periodic billing statements2. Interest-rate adjustment notices for ARMs3. Prompt payment crediting and payoff statements4. Force-placed insurance5. Error resolution and information requests6. Servicing policies, procedures, and requirements7. Early delinquency intervention8. Continued contact with delinquent members9. Loss mitigation procedures

http://www.consumerfinance.gov/regulations/2013-real-estate-settlement-procedures-act-regulation-x-and-truth-in-lending-act-regulation-z-mortgage-servicing-final-rules/

NCUA – New RulesFinal Rules Cover Nine Topics:

1. Small Credit Unions• $50 million in assets• Streamlined exams – NO change + $10

million2. Low income designation acceptance now

90 days3. Troubled Condition Credit Unions

Thank you for joining me for this overview of the Compliance Outlook.

Stay Tuned……..