2. Fourth Quarter 2013 CFPB – International Remittance Transfers CFPB – Credit Access Rule NCUA Liquidity & Contingency Funding Plans NCUA Electronic Filing NCUA Charitable Donation Accounts FFIEC Social Media Guidance

3. First Quarter 2014 CFPB Ability to Repay / Qualified Mortgages Loan Originator Compensation Valuations and Appraisal Requirements HOEPA Rules Mortgage Servicing

4. 100 IRT Exemption Disclosures Temporary Exceptions

5. The credit access rule allows: Joint-account income as an asset on credit applications.

6. FICUs with assets less than $50 million must maintain a basic written policy for managing liquidity and a list of contingent liquidity sources. FICUs with assets over $50 million must have a contingency funding plan that sets out strategies for liquidity shortfalls in emergency situations. FICUs with assets of $250 million or more must have access to a backup federal liquidity source for emergency situations.

8. FCUs are now permitted to create and fund charitable donation accounts (CDAs), which may contain otherwise “impermissible” investments. CDAs are a hybrid charitable and investment vehicle, satisfying certain conditions. (721.3) Funding is limited to 5% of the FCU’s net worth at all times for the duration of the CDAs, measured quarterly during the Call Report cycle.

9. Addresses the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media……

10. Indirect Auto Lending o Credit unions that allow dealer mark- ups in their indirect lending program should be aware of details from a consent order to Ally Financial Inc. and Ally Bank.

11. Must establish a consumer’s ability to repay: At a minimum creditors must consider 8 underwriting factors: (1)Current or reasonably expected income or assets; (2)Current employment status; (3)Monthly payment on the covered transaction; (4)Monthly payment on any simultaneous loan secured by same property; (5)Monthly payment for mortgage-related obligations; (6)Current debt obligations, alimony, and child support; (7)Monthly debt-to-income ratio or residual income; and (8)Credit history Must use reasonably reliable third-party records to verify the information they use to evaluate the factors.

12. Must establish a consumer’s ability to repay: There are qualified mortgage standards that if met provide the presumption that the credit union has established the ability to repay – consider it a “Safe Harbor”.

13. MLO cannot receive compensation on any of the mortgage loans’ terms or conditions. No Dual Compensation – if the MLO receives compensation from the borrower in connection with a mortgage loan, s/he cannot receive compensation from their organization or another person for the same transaction.

14.  MLO’s must be registered according to the SAFE Act.  MLO’s AND CREDIT UNIONS must include their name and NMLS ID on the following loan documents: –Credit application –Note or loan contract –Security instrument Generally include on documents that require a member’s signature.

15. TILA – Applies to first lien or subordinate lien closed end loans secured by a member’s principal dwelling. – Higher Priced Mortgage Loan (HPML): First lien with an APR that exceeds the APOR by 1.5% or more First lien jumbo loan with an APR that exceeds the APOR by 2.5% or more. Subordinate lien with an APR that exceeds the APOR by 3.5% or more http://www.ffiec.gov/ratespread/newcalc.aspx

16. TILA - Appraisal Requirements: Disclose within three business days after receiving the members’ applications that they are entitled to a free copy of their appraisal and can hire their own appraiser at their own expense for their own use. Disclosure Requirement (Appendix C – Form C-9) “We may order an appraisal to determine the property’s value and charge you for this appraisal. We will promptly give you a copy of any appraisal, even if your loan does not close. You can pay for an additional appraisal for your own use at your own cost.”

17. TILA - Appraisal Requirements: Obtain a written appraisal performed by certified or licensed appraiser. Appraisal must be written with an interior inspection. Deliver copies of appraisals to applicants no later than three business days before consummation.

18. ECOA – Valuations Requirements Covers closed-end or open-end secured by 1 st lien on a dwelling. Within three business days of receiving a member’s application, notify the applicant of the right to receive a copy of appraisals/valuations. Promptly share copies of appraisals and other written valuations with the applicant. -Promptly means upon completion or at least three business days before consummation (for closed end) or account opening (for open end), whichever is earlier.

19. ECOA – Appraisal or written valuation to be provided: An appraiser’s report with an estimate of the property’s value or opinion of value. Internal document prepared that assigns a property value. Report approved by a GSE describing the estimate developed by the GSE’s proprietary methodology or mechanism. Automated valuation model report. Broker’s opinion prepared by a real estate broker, agent or sales person to estimate the property’s value.

20. High-Cost Mortgages Rule applies to consumer credit transactions secured by a principal dwelling. What transactions are covered? Purchase-money mortgages Refinances Closed-end home equity loans Open-end credit plans (i.e., HELOCs)

21. High-Cost Mortgages - Special disclosures – Provided 3 days prior to consummation or account opening. Loan will not be effective until consummation or account opening occurs. Explain consequences of default. Disclose loan terms such as APR, amount borrowed and monthly payment. Variable rate – explain maximum monthly payment that may be required. Regulation Z – Appendix H (Sample H-16)

22. High-Cost Mortgages – Restriction on Terms The rule bans certain loan features: – Balloon payments – except in 3 circumstances: Payment schedule is adjusted to accommodate member’s seasonal or irregular income. Short term bridge loan to finance new home purchase for member selling existing home. Credit union serving predominately rural or underserved areas and meets the ATR/QM rule. – Prepayment Penalties – Due on Demand Features

23. Homeownership Counseling – Prior to making a high-cost mortgage, the credit union must receive written certification that the member has received homeownership counseling on the advisability of the mortgage from a HUD approved counselor or state housing finance authority. – The counselor must confirm that the member received ALL of the high-cost mortgage / RESPA disclosures before they can issue the certificate.

24. Homeownership Counseling Credit unions must give applicants for federally related mortgages (whether or not it is high-cost) a written list of homeownership counseling organizations within 3 business days of receiving the application.

25. Mortgage Servicing – RESPA Error resolution and information requests Force-placed insurance General servicing policies, procedures and requirements Early intervention with delinquent members Continuity of contact with delinquent members Loss mitigation

26. Mortgage Servicing – TILA Interest rate adjustment notices for ARMs Prompt crediting of payments and responses to requests for payoff amounts Periodic statements for mortgage loans

27. Small Servicer Exemption Periodic statements Prohibition on forced-place insurance where a servicer could continue the member’s existing hazard insurance by advancing funds to escrow under certain conditions General servicing policies and procedures requirements Early intervention provisions Continuity of contact provisions Some Loss mitigation provisions

28. Thank you for joining us for this overview of the Credit Union Compliance Connection. Stay Tuned……..