Enough already! Never have truer words been spoken in relationto regulatory compliance. Credit unions are at the breaking point,with some already broken. The number of changes to consumerprotection laws and regulations is unprecedented.

For the past year. credit unions faced short implementationperiods to comply with the CARD Act, MDIA and comprehensiveamendments to Regulation Z and RESPA. On a single day in August,the Federal Reserve issued more than 1,000 pages of proposed andinterim rules on Regulation Z alone. And credit unions must tacklenew privacy and risk-based pricing notices. Early in 2011, creditunions will begin making new Regulation Z disclosures regardingmortgage payment changes and the sale or transfer of mortgages.Credit unions will also need to comply with registrationrequirements for mortgage originators and ensure mortgage loanorigination practices comply with Regulation Z changes. The mostsobering news of all is that the biggest compliance challengescould still be a year or two away courtesy of the Dodd-FrankAct.

Back in 1994, my first job out of law school was a complianceofficer of a mid-sized credit union. First task was bringing thecredit union into compliance with the Truth in Savings Act as themandatory compliance date was only seven months away. Truth inSavings represented the biggest regulatory compliance changeaffecting credit unions in years. However, given the fact that atthat time there were virtually no other regulatory compliancechanges substantially impacting the credit union, Truth in Savingsgot my full attention. Seminars, white papers, half-day trainingsessions complete with flip charts and role playing exercises, nostone was left unturned. When all was said and done, seven monthsof hard work equated to full compliance with the new law.

Fast forward to today. The landscape could not be moredifferent. Credit unions are faced with thousands of pages ofregulatory changes that make Truth in Savings look like a walk inthe park. Not only are today's regulatory changes cumulatively morecomplex and comprehensive, the timeframe to comply is becomingshorter and shorter. Thankfully state leagues and tradeassociations have stepped up and are doing more now than ever toassist credit unions with compliance. At the end of the day though,even if you can comprehend the impact of these changes, your creditunion still has to spend enormous time and resources onimplementing all of the measures to bring the credit union intocompliance.

One would think that those focusing on assisting credit unionswith regulatory compliance would have nothing to complain about. Anumbrella salesman cannot curse the rain, right? Not necessarily. Wehave a front row seat to witness the hurdles faced by credit unionsin trying to do the right thing and comply. For instance, there wasan enormous amount of work done by credit unions to comply withthree rounds of the CARD Act provisions. Much of the past year wasspent deciphering the new credit card rules and implementing amultitude of measures to comply. After all of that, word comes thatthe Consumer Financial Protection Bureau's first order of businesswill be to revamp credit card disclosures.

Another example is the Real Estate Settlement Procedures Act andRegulation Z. Credit unions are now using new good faith estimateand HUD-1 lending forms for real estate loans pursuant tosubstantial RESPA changes. There have been at least 16 amendmentsand proposed amendments to Regulation Z since January 2010, manyimpacting real estate lending disclosures. In the midst of all ofthis, the CFPB intends to combine Regulation Z and RESPAdisclosures for certain real estate loans so that consumers receiveone disclosure instead of two. Given the ridiculous number ofdocuments provided to borrowers to sign in order to obtain amortgage, less paperwork is a good thing. However, how doescombining Regulation Z and RESPA disclosures relate to all of theamendments enacted and proposed? Will credit unions have to startover again and again in terms of adopting new disclosures andterminology as the rules change?

While the intentions are good, it would be nice to at least knowthat we are heading toward simpler documentation and less of it.Unfortunately, there are too many signs indicating otherwise. TheDodd-Frank Act requires over a dozen new pieces of information tobe collected and reported as part of your Home Mortgage DisclosureAct Loan Application Register. Credit unions will be collecting andreporting new information such as borrower credit scores andcollateral property value. Although you might be in a betterposition to defend your loan decisions against claims of fairlending violations, reporting the additional information willnecessitate additional training, new forms, and the possibility oftechnical data collection violations.

It is difficult for a credit union to not shrink from thecompliance burden. Faced with the overwhelming number of regulatorycompliance changes, I know of too many credit unions that areconsidering offering less products and services to members. At whatpoint does the risk of violating consumer protection requirementsbecome too much? For some, that point has been passed.

For others, the focus has not been solely on the seeminglyinsurmountable compliance challenges. Instead, these credit unionskeep almost a running list of everything they have done to bringtheir products and services into compliance with the changes. Theywant to show their examiners they are making a good faith effort atregulatory compliance. Gone are the days when a credit union couldever feel absolutely comfortable with regulatory compliance.Instead, it comes down to effectively assessing the compliance riskto your credit union and deciding on a path that best mitigatesthose risks.

John Zasada is principal, financial institutions at LarsonAllen. He can be reached at 218-790-1086 or [email protected]