Many Forecast New Costs in New Rules

Bob Dorsa, president of the American Credit Union Mortgage Association, said the initial response from his membership to new mortgage servicing rules from the CFPB is that they are going to cost credit unions more money.

"One would think the banks are writing this stuff to push everyone else out of the market," he said. "If it becomes too expensive to comply it will push some people out."

According to Dorsa, credit unions will have to be smarter and more efficient, or collaborate by using CUSOs. He said many mid-sized credit unions may have to switch to servicing companies, but felt confident the biggest CUs will not.

"But even if you outsource the credit union still has to manage the relationship, meaning there still is a lot of complexity," he said. "Some people assume outsourcing minimizes risk, but in my opinion it transfers risk from one bucket to another. The credit union still has to manage the relationship."

Dorsa believes the CU movement cannot survive without the ability to write mortgages, meaning they simply will have to abide by the new rules.

"It is what it is, and credit unions will comply with whatever compliance there is," he said. "It may turn out the new rules will serve as a catalyst for greater efficiency. If anyone is thinking of pulling back or terminating their programs that is suicide. Hire some attorneys, get some advice and move forward. What always shocks banks is how much credit unions share information."