Fourth Quarter 2012 Troubled Debt Restructuring S.A.F.E. ACT Unlimited Share Insurance Coverage First Quarter 2013 CFPB NCUA

Eliminates dual tracking Calculate delinquency based on modified loan terms Nonaccrual on loans > 90 days past due Policies & Procedures

Registration Renewal Annual Audit Federally Insured CUs – no CE Training CU not Federally Insures – required CE Training

Unlimited Share Insurance ENDS Recommendations: Determine affected accounts Communicate change Update disclosures December 31,

CFPB NCUA High Cost Mortgages Escrow Requirements Ability to Repay Servicing Small Credit Union Rule Low Income Designation CU Troubled Condition

Covered Loans: Secured by principal dwelling Purchase money mortgages Refinances Close-end home equity loans Open-end credit plans Rule effect: Ban balloons and prepayment penalties; No loan modification and payoff fees; Late fee capped at 4%; and Prohibits lenders from rolling closing costs into the loan amount. amendments-to-regulation-z-and-homeownership-counseling-amendments-to-regulation-x /

Exemption: Serve rural & underserved areas Assets < $2 billion Originate < 500 first lien mortgages AND Not escrow currently Escrow accounts must be established on Higher-priced mortgage loans and maintained for at least 5 years. w-requirements-under-the-truth-in-lending-act- regulation-z/

Credit Unions must consider 8 underwriting factors: 1. Current income or assets 2. Current employment status 3. Monthly payment on loan 4. Monthly payment on other loans 5. Payments on related obligations 6. Current debt obligations 7. Monthly debt-to-income ratio / Residual income 8. Credit History standards-under-the-truth-in-lending-act-regulation-z/

Final Rules Cover Nine Topics: 1. Periodic billing statements 2. Interest-rate adjustment notices for ARMs 3. Prompt payment crediting and payoff statements 4. Force-placed insurance 5. Error resolution and information requests 6. Servicing policies, procedures, and requirements 7. Early delinquency intervention 8. Continued contact with delinquent members 9. Loss mitigation procedures 3-real-estate-settlement-procedures-act- regulation-x-and-truth-in-lending-act-regulation-z- mortgage-servicing-final-rules/

Final Rules Cover Nine Topics: 1. Small Credit Unions $50 million in assets Streamlined exams – NO change + $10 million 2. Low income designation acceptance now 90 days 3. Troubled Condition Credit Unions

Thank you for joining me for this overview of the Compliance Outlook. Stay Tuned……..