first_img 4SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Take hundreds of pages of complex regulations covering dozens of different subjects. Stir in hundreds of fallible human beings tasked with understanding and implementing those rules. Add a dash of uncertainty about the facts. The result is an instant recipe for disagreements. Even with the best of intentions on all sides, disputes will inevitably arise over how to apply and enforce the rules in real-life circumstances. Some mechanism will be needed to resolve these issues in a fair and orderly manner.This is the inevitable situation for credit unions and their regulators, from the National Credit Union Administration and Consumer Financial Protection Bureau to state agencies. While most credit unions report generally positive experiences with their examiners, some find that the regulators are capable of pushing the rules too far, leading to absurd results.Take the example of one credit union in the aftermath of the Great Recession. It followed the exhortations of our national leaders and agreed to modify some 30-year home mortgages for borrowers in distress. NCUA rules limit credit union mortgages to terms of not more than 40 years. The modifications included extensions of the mortgage terms beyond 40 years from their first origination dates. NCUA examiners took the position that this was a violation of law. The credit union used NCUA appeal channels and eventually received a ruling that the modifications were new transactions and that the term limit should be measured from those dates. By this standard, the modified mortgages complied fully with NCUA rules—and helped the credit union’s members. continue reading »last_img

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