Jared Ihrig, Chief Compliance Officer and CUNA Attorney Explored NCUA Exam ‘Hot Spots’ During 2020 CUNA Membership Operations and Experience Board Virtual Conference and CUNA Technology Board.
The NCUA is focused on error resolution requirements, timelines and issues regarding Regulation E, as well as overdraft opt-in disclosures for one-off ATM and debit transactions, he said. declared.
Some credit unions continue to miss the loan application registry (LAR) filing deadlines as required by the Home Mortgage Disclosure Act, and some are not updated on a quarterly basis.
Additionally, in some cases, data fields are not properly aggregated or captured in credit union loan origination systems, Ihrig says.
The reviewers also note that in some instances, credit unions fail to provide borrowers with sufficient specificity of the reasons for adverse action notices related to Settlement B, resulting in certain review findings for credit unions. .
Fair loan reviews will likely increase in 2020 and 2021, he notes.
Under the Servicemembers Civil Relief Act, the annual percentage rate reduction must occur on the effective date of active service orders, not necessarily on the date the member notifies the credit union.
Additionally, Reserve and National Guard members are covered by the Military Lending Act and the Servicemembers Civil Relief Act, says Ihrig. Some credit unions do not understand what constitutes a “covered borrower” under the Military Loans Act.
During CUNA’s discussions with the NCUA, the agency reports the second highest number of complaints about the Fair Credit Reporting Act, he said.
“It’s important to remember that if we contract with third-party vendors and there are mistakes made by our third-party vendors, it does not relieve the credit union of its responsibility in this area,” says Ihrig.
When it comes to fair loans, credit unions need to review all of their systems, including debt collection and credit scoring, to make sure they are being applied fairly.
Mortgages are another review hot spot for regulators, Ihrig says. Specific concerns include misrepresentation of credit terms and annual percentage rate, rates and payments misleadingly advertised as fixed, misrepresentation of “the existence, nature or amount of money or credit available. “For the consumer, the misrepresentation of” the existence or amount of fees or costs to the consumer “, and the number of payment periods during the entire term of the loan.
Mortgage management is also an important issue, with loss mitigation timing and disclosure requirements, notices and communications to delinquent borrowers, private mortgage insurance release requirements, calculations and disclosures. escrow account, assigns, periodic reporting requirements and borrowers in bankruptcy disclosures under scrutiny, says Ihrig.
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