Credit unions made a public plea to the CFPB last week urging the agency against any sudden changes to the reverse mortgage market. Substantial changes, the National Association of Federal Credit Unions (NAFCU) said in a letter to the CFPB, could deter participants from the market and place an unnecessary burden on those already participating.
NAFCU’s letter, written by Dillon Shea, regulatory affairs counsel, advises the CFPB that any drastic changes made to reverse mortgage regulation at this time could chase away responsible lenders by placing too much of a burden on them. Shea makes the case that any additional regulations the CFPB may tack on would weigh heavily on the industry’s small number of loan originators, and only cause more difficulty for lenders already facing regulatory compliance burdens.
Instead of focusing on already responsible lenders, NAFCU says, the CFPB should point its efforts toward the industry’s “unscrupulous lenders,” according to the letter. This, the NAFCU proposes, will help keep good players in the industry, and bad players out.
“Focusing on problem lenders without promulgating sweeping new regulations will likely provide the greatest benefits to consumers while ensuring that responsible lenders do not exit the market,” writes Shea in the letter.
The NAFCU also addresses the fact that any new reverse mortgage regulations could interfere with the industry’s acceptance of and adherence to the Dodd-Frank Act’s required new housing regulations.
“The lending industry is already facing a host of new regulations encompassing not only mortgages, but also, rules that are expected to create significant changes to other products and practices,” writes Shea. “Accordingly, the Bureau should wait until after those rules have been promulgated so that lenders can focus their resources on complying with those changes to the law.”
Written by Erin Hegarty