The CFPB’s Focus on Housing Fees: Implications for Credit Unions

Posted by Gracie Nelson on March 12, 2024

The latest attack on fee income came on Friday, March 8, as the CFPB published a blog post outlining their interest in addressing fees associated with housing and closing costs and asking for public comment. However, the substantial work and effort credit unions invest in the closing process are supported by these fees. They enable credit unions to recover some of the costs of their services and compensate their mortgage lending staff who work tirelessly behind the scenes to support members as they pursue the dream of home ownership.

Specifically, the CFPB is scrutinizing expenses related to credit reports and lender’s title insurance, as well as interest rates and mortgage insurance payments. Additionally, the CFPB is questioning discount points looking to mitigate their cost and usage.

While this update does not constitute a formal rule at present, the CFPB is seeking input from the public and these requests often result in rules being promulgated. The CFPB’s latest initiative to reduce fee income poses yet another threat for smaller lenders and financial institutions that may struggle to absorb these costs compared to larger banks.

We are closely monitoring this issue and are prepared to respond to any proposed rule should the CFPB move forward with this initiative. GoWest will provide ongoing updates as developments unfold.

Posted in Advocacy on the Move, Regulatory Advocacy.