Cordray: CFPB Boosted Credit Union Mortgage Lending – NMP Skip to main content

Cordray: CFPB Boosted Credit Union Mortgage Lending

Phil Hall
Sep 21, 2016
The Consumer Financial Protection Bureau (CFPB) has levied a $1.75 million civil penalty against Coppell, Texas-based Nationstar Mortgage LLC

Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), has engaged in some self-congratulatory accolades in a speech highlighting the credit union industry’s recent increase in mortgage originations.

Speaking today before a Washington, D.C., conference hosted by the National Association of Federal Credit Unions, Cordray insisted that the CFPB’s rules and guidelines to prevent a reprise of the 2008 crisis proved to be beneficial for credit union mortgage origination.

“Our first set of mortgage rules have been in place for over two and a half years, and we are seeing great progress,” Cordray said. “In 2014, the first year of our Ability-to-Repay rule on mortgage origination, owner-occupied home purchase mortgages increased by 4 percent, according to HMDA data, and growth was even stronger last year: home purchase mortgages increased by an estimated 13 percent to 14 percent. And it is notable that credit unions are thriving, with their share of mortgage lending actually growing. In fact, credit unions originated 39 percent more home purchase mortgages in the first nine months of 2015 than they did for the same period of 2014, according to recent data.”

Although Cordray repeated previous assurances that he did not hold credit unions responsible for the 2008 financial meltdown, he nonetheless insisted that these institutions should be grateful for the regulatory burden that the CFPB placed upon them.

“Many credit unions have focused on the compliance burdens of the new rules,” he continued. “But they have overlooked the positive benefits of the rules. A safer mortgage market that does not allow ‘no-doc’ loans, or loans that can be underwritten over misleading teaser rates, is a market that presents more favorable ground for responsible lenders like credit unions. When bad practices are rooted out, good practices are able to thrive, freed from the unfair competition of a race to the bottom. That is exactly what has happened for credit unions over the past two years. In addition, as the Consumer Bureau is building out a vigorous supervision program over non-bank mortgage lenders and mortgage servicers, you are being put on a level playing field with your competitors for the first time ever.”

Cordray also acknowledged the input from credit unions for encouraging the CFPB to redefine “small creditor” and “rural area,” which he insisted was also good news for credit unions.

“We raised the loan origination limit for small-creditor status for first-lien mortgage loans from 500 to 2,000 per year, and we stopped counting loans held in portfolio by smaller creditors and their affiliates toward the limit,” he said. “Under the new rule, our small creditor provisions now cover all but about 150 of the very largest credit unions.”

Published
Sep 21, 2016
CFPB Seeks Insight On Creating A Fairer Mortgage Market

The Consumer Financial Protection Bureau has been actively looking to create a fairer mortgage market, free of discriminatory engagements. To do so, it issued a Request for Information to seek input on rules implementing the Home Mortgage Disclosure Act.

Regulation and Compliance
Nov 17, 2021
Regulators Renew Effort to Protect Against Foreclosures

CFPB, The Fed, FDIC and other agencies will watch for compliance with COVID-19 protections

Regulation and Compliance
Nov 10, 2021
Fed To Begin Tapering Asset Purchases by 14.3% This Month

Also sets target range for the federal funds rate at 0 to 1/4%.

Regulation and Compliance
Nov 03, 2021
CFPB Cracks Down On Discriminatory Credit Reporting For Black And Hispanic Consumers

Consumers in majority Black and Hispanic neighborhoods are far more likely to have disputes appear on their credit reports. 

Regulation and Compliance
Nov 03, 2021
CFPB Names 2 New Assistant Directors

Former Obama Administration officials will lead Supervision Policy, Enforcement divisions.

Regulation and Compliance
Oct 29, 2021
FHFA Proposes Extra Disclosure Rules For Fannie, Freddie

The proposed rule for the Enterprise Regulatory Capital Framework seeks to put Enterprises on a "level playing field" with U.S. banking requirements.

Regulation and Compliance
Oct 28, 2021