Mandate Relief And Much Much More…

March 24, 2016 at 10:00 am Leave a comment

I have some good news this morning.

First, Alex Rodríguez announced yesterday that he would be retiring in two years when his 10 year gazillion dollar contract comes to an end. What a guy!  I’m counting down the days, although I’m already bracing myself for announcers speculating with every home run he hits whether he will catch Barry Bonds, who holds the record for the most home runs by a steroid-using cheater.  By the way, who do you think has a bigger ego Alex or Donald Trump?

Secondly, Congress actually functioned well enough last December to give some important mandate relief to financial institutions that provide mortgages in rural and underserved areas. A few days ago,   the CFPB promulgated regulations putting this mandate relief in effect starting March 31st. The system worked, what a concept!

Financial institutions must establish escrow accounts for high priced mortgage loans but there is an exception for institutions with $2 billion or less in assets that “predominantly” provide mortgages in rural and underserved areas  in a year, don’t sell 2,000  or more of these mortgages  and   that don’t otherwise provide escrows. (for the exact criteria see 12 C.F.R. § 1026.35.  Similarly, credit unions providing mortgages in these areas can also make mortgage loans with balloon payments that qualify as Qualified Mortgages.  In the HELP Act, Congress eliminated the requirement that credit unions predominantly offer mortgage loans in the area to qualify for the escrow exemption.  The changes made by the Bureau mean that small credit unions will be eligible for both exemptions so long as they make a loan in an underserved or rural area in the preceding calendar year.

Another change mandated by HELP, which the Bureau finalized earlier this month, is the creation of a process for persons to apply for an area to be designated as rural even though it falls outside of the CFPB’s criteria.(

Foreclosure Relief Extended

In the “better a little late than never” category, the House of Representatives passed legislation this week extending until 2017 foreclosure protections for active duty members of the armed forces. Specifically, the Congressional Research service explains that S.2393 keeps in place  “the one-year period after a service member’s military service during which: (1) a court may stay proceedings to enforce an obligation on real or personal property owned by the service member before such military service; and (2) any sale, foreclosure, or seizure of such  property shall be invalid without a court order or waiver agreement signed by the service member. ” (Currently, the extended one-year period is scheduled to expire on December 31, 2015, and return to a nine-month period under the Servicemembers Civil Relief Act.)  I’m assuming that if the President signs the bill its provisions would be applied retroactively but that is just my assumption.

I Sure Hope You Guys Know What You are Doing

Keith Leggett reported in his Credit Union Watch blog yesterday that there are 251 credit unions with Money Service Business Accounts. According to Keith, “[t]he number of accounts for Dealers in Foreign Exchange fell by 40 over the year to 17 at the end of 2015. Federally insured credit unions reported a drop of 30,620 accounts for Check Cashers from 31,543 accounts at the end of 2014 to 923 accounts at the end of 2015. Accounts for Providers of Prepaid Access fell from 92 accounts to 39 accounts. Also, there was a decline in the number of accounts for Sellers of Prepaid Access from 140 accounts to 116 accounts.” (

That is still a lot of MSB financing. I know that MSBs are legitimate businesses and I know that thy generate much needed fee income, but, remember that these accounts also come with complicated BSA requirements that, if mishandled, can damage the best of institutions.

What’s In A Name?

How important is your credit union’s name?

Well I just heard that in this day in 1962 Mick Jagger and Keith Richards performed together for the first time as Little Boy Blue and the Blue Boys. Had they kept this name, I doubt that we would still be paying hundreds of dollars to see them play.

On that note, I’m off to Grandma’s house for some Easter Sunday lamb with mint jelly. See you Monday.


Entry filed under: Compliance, General. Tags: , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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