Credit Union Regulatory Alert  

Published by Howard & Howard Attorneys PLLC



Thank you for taking the time to read this Howard & Howard Credit Union Regulatory Alert. This Alert continues our series on the Consumer Financial Protection Bureau's new mortgage disclosure requirements. If you missed them, be sure to review our previous Alerts on 7 Initial Items and the Scope of the new rules. 


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If you have any questions on this Alert or any other issue, please feel free to contact Steve Van Beek or Michael Bell 

Key Definitions in New Mortgage Disclosures

The Consumer Financial Protection Bureau's new Integrated Mortgage Disclosure requirements impact more than a credit union's disclosures. This Alert reviews the amended definition of "application" as well as the two definitions of "business day" that apply to the new requirements.


Definition of Application

The final rule adds a definition of "application" in Regulation Z that differs from the existing Regulation X definition (which is currently used to determine the timing for providing the Good Faith Estimate). Specifically, the rule removes the seventh or "catch-all" element to the definition of "application." 

Under the new definition, credit unions have an application when they obtain the following six pieces of information:


  1. Consumer's name;
  2. Consumer's income;
  3. Consumer's social security number to obtain a credit report;
  4. Property address;
  5. Estimate of the value of the property; and
  6. Mortgage loan amount sought. 
Receipt of an application triggers the credit union's requirement to provide the consumer with a Loan Estimate within three business days. 
The new definition will require credit unions to review their application process and adjust their information collection process to ensure the credit union obtains all the information it needs to provide a Loan Estimate before or at the same time as the six pieces of information making up the "application."
Definition of Business Day
The new rules contain two definitions of "business day." Which definition applies depends on the underlying regulatory requirement. Thus, it is important for credit unions to understand which definition of business day applies to which requirement in order to ensure the timing requirements are satisfied.
General Definition
The general definition of "business day" means a "day on which the creditor's offices are open to the public for carrying on substantially all of its business functions." 
As the definition indicates, whether a particular day (e.g., Saturday) is a business day or not depends on each credit union's situation. The existing staff commentary to Regulation Z includes a discussion of the "business function test" and credit unions should review this test to ensure they have made the appropriate determination based on their operations.
Specific Definition
The specific definition of "business day" is "all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a)[.]" 
Importantly, the new definition of business day lists which regulatory requirements use the specific definition. For all other requirements, the general definition applies.
As credit unions work through the new mortgage disclosure requirements, it is extremely important to understand these key definitions and how they impact your implementation plans. 
If you have any questions or need assistance, please feel free to contact Steve Van Beek or Michael Bell
About Howard & Howard 
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In This Issue
Key Definitions in New Mortgage Disclosures
About Howard & Howard


Attorney Spotlight

 concentrates his practice in the area of financial regulations. His intimate knowledge of the operational issues facing credit unions provides the perfect platform to recommend best practices to reduce compliance, strategic and reputation risks.
Attorney Spotlight

  is a Member of Howard & Howard Attorneys PLLC and concentrates his practice in credit union mergers and acquisitions, loan documentation review and strategic planning.

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This Advisory is intended for informational purposes only, and is not offered as legal advice.  Please call a qualified attorney for counsel related to your particular situation.