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EFFECTIVE DATE OF MORTGAGE DISCLOSURE RULE
SHOULD BE NO EARLIER THAN OCT. 3
ARLINGTON, Va. — The effective date of the CFPB’s Integrated Mortgage Disclosure Rule should be delayed to no earlier than Oct. 3, NASCUS stated in a comment letter to the agency today, and added that a “minor additional delay” until Jan. 1, 2016 is warranted.
In the letter, NASCUS noted that state credit union regulators continue to be concerned about the readiness of small financial institutions to switch to the new integrated disclosure, and believe the additional time is necessary to ensure a smooth transition.
“Although many credit unions are prepared to comply with the new rule, the depth and breadth of changes to technology, third-party contracts, and internal policies and procedures presents major challenges for even the most diligent and well-prepared institutions,” wrote Sabrina Bergan, NASCUS Regulatory & Public Policy Counsel. “Given the significant operational and compliance risks involved, NASCUS feels all credit unions could benefit from additional time to train their staff and test their systems,” she stated.
NASCUS further believes that a minor additional delay until Jan. 1, 2016 is warranted and would be beneficial to both creditors and consumers, Bergen wrote. “A January implementation date would provide for a first-of-the-month weekend implementation, and would minimize risk by moving the transition to a period of traditionally lower-volume lending. The additional time for training and testing should also minimize errors, which would reduce complications for borrowers, as well as potential liability for creditors,” she stated.
However, if the Bureau proceeds with an Oct. 3, effective date, the NASCUS letter states, the Bureau should adopt a “safe-harbor” period from legal liability, which would recognize the magnitude of the operational changes that will accompany the rule, and give financial institutions a good-faith opportunity to manage their risk without disrupting their service to members.