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E-Exchange Newsletter
Spring 2016 For System Providers Serving the Credit Union Marketplace                     Edition 100

Celebrating Our 100th Edition

Twenty-nine years ago, pre-internet, most communications with system providers were done by phone or U.S. Postal Service. As the need to communicate with system providers became increasingly more important and frequent, CUNA Mutual Group introduced a newsletter called “Update: Credit Insurance Processing”. It was printed with black ink on gray paper and sent by U.S. mail to about 150 system provider contacts in July 1987.

That was 100 issues ago. Today, the E-Exchange Newsletter is emailed to over 600 contacts quarterly. Check out our E-Exchange Newsletter infographic for more about our history.

Industry & Compliance News

Changes to Military Lending Act (MLA)

As reported in our Winter 2015/16 E-Exchange Newsletter, the Department of Defense has amended the Military Lending Act (MLA) to expand the Act’s coverage of consumer credit transactions and impose additional disclosure and credit contract requirements. Creditors must comply with the final rule by October 3, 2016 for closed-end consumer credit and most open-end consumer credit; except for credit cards which must comply by October 3, 2017. For additional details, see our MLA web page and MLA FAQs.

MLA Impacts Calculations

Changes affecting closed-end and open-end credit transactions have potential impact to Loan Origination Systems (LOS’s) and Data Processors (DP’s) when calculating the Military Annual Percentage Rate (MAPR), which can’t exceed 36%. LOS’s and DP’s will need to be prepared to help your customers comply with this requirement.

There are additional fees and products that must now be included in the MAPR calculation, including CUNA Mutual Group’s Credit Insurance, Debt Protection, GAP, and Mechanical Repair Coverage.

Closed-End Transactions: Any system producing affected closed-end credit transactions will need to calculate a MAPR. For closed-end transactions the MAPR must be calculated one time, prior to credit being extended. This is done in a similar fashion as the APR calculation where you need to subtract the additional upfront fees (e.g. GAP, Mechanical Repair Coverage, and Single Premium Credit Insurance) from the Amount Finance. Any monthly pay products like Level Rate Credit Insurance, Monthly Renewable Credit Disability, and Debt Protection will require a modification in the APR loop to remove these monthly pay products from the amount side of the APR equation (see APR formula in Section 1026 Appendix J of Regulation Z). The ability to calculate the MAPR for closed-end credit transactions already exists in CUNA Mutual Group’s Calculation Engine.

Open-End Transactions: For open-end credit, the MAPR must be calculated for each billing cycle. The MAPR must follow the calculation for the effective APR (see Section1026.14(c) and (d)) including the additional fees and products in the calculation. Based on our review, Section 1026.14 is open to multiple interpretations regarding which calculation should be used and when. While it is ambiguous, it appears that the calculation in Section 1026.14(c)(1) is most appropriate when only a voluntary payment protection product is included in the credit (along with interest).  But, if a different transaction charge is added to the credit (such as a cash advance fee) in a month, then it appears that the data processor must use the calculation found in Section 1026.14(c)(3).

Overall, data processors must be equipped to handle different calculations each month depending on the type of fees and charges included with the credit. And, if the MAPR exceeds 36% for any particular month, data processors will need to determine how to work with credit unions to ensure the member is not charged a MAPR that exceeds the 36% cap.

For any questions on performing the MAPR calculations, please contact Data Processing Solutions.

MLA Impacts LOANLINER® Documents

The MLA’s final rule requires creditors to disclose to covered borrowers a statement regarding the MAPR, along with disclosures required by Regulation Z and a clear description of the borrower’s payment obligation. The MAPR statement and payment obligation description must be provided both in writing and orally. Creditors have the option of including a toll-free phone number on their applications or disclosure statements which a member may call to receive the oral disclosures.

The final rule also prohibits the following contract provisions: mandatory arbitration, mandatory allotments for repayment, mandatory waivers of consumer protections under state or federal law, prepayment penalties, and unreasonable notice requirements as a condition for legal action. In addition, the final rule restricts the security interest a creditor may take in the borrower’s deposit accounts to a very narrow subset of funds.

As a result of the changes required by the final rule, LOANLINER® is creating separate versions of documents that may be used for consumer credit covered by the rule. The fillable fields on the new documents will match those included on the current standard documents. A few fields will be removed from the MLA documents, and one new field will be added. This new field will be used by credit unions choosing to specify the toll-free phone number covered borrowers can call to receive oral disclosures. MLA-compliant documents will be available for credit unions to order later this spring. Early draft sample forms will be available.

For questions on LOANLINER® documents or to request an early draft sample, please email dodmla@cunamutual.com.

News From Lending Products

Debt Protection Refresh: Credit Unions May Request Mapping

As part of our commitment to offer market-leading products, we invested in credit union and member research to develop an enhanced Debt Protection program that members told us they want.  As a result, we are rolling out enhancements to our Debt Protection product offered by credit unions in numerous waves beginning May 1, 2016 and through 2017.

We will be communicating with our credit union customers throughout this year and into 2017 about these enhancements. No action is required on your part at this time.

Please be aware that your credit union customers offering Debt Protection may be contacting you for help in mapping their forms in order to meet their scheduled change effective date. Thank you in advance for your help in the timely completion of their requests.

If you have questions about this product update, please contact Joe Schubert at 800.356.2644 Ext. 665.7754.

Mortgage Payment Protection: Major Milestones Planned for 2016

After launching Mortgage Payment Protection to targeted credit unions in 2015, CUNA Mutual Group has big plans to continue building infrastructure and automation to support this unique product. We are now approved and business-ready in 24 states and are preparing for business readiness in 13 more. All state filings have been completed with approvals pending in 12 states.

In January, NAFCU Services announced a preferred product partnership with CUNA Mutual Group’s Mortgage Payment Protection product.Through their program, NAFCU will introduce and educate member CEOs about Mortgage Payment Protection through webinars, blog posts and other channels.

Infrastructure and automation builds for 2016 will include an online quote and enroll tool for members to self-serve, a Sales Call Center, and the full integration of the Mortgage Payment Protection application into mortgage origination systems used by our credit union customers. Add these new channels to our existing integration with D+H MortgagebotPOS™ and our loan officer quote and enroll tool for in-person or telephone with e-signature integration, and credit unions will have a well-rounded infrastructure at their fingertips in the coming year.

We are excited to bring this unique product to life to help empower hardworking Americans to achieve financial security and credit unions protect their mortgage portfolios. Watch this video to find out why a Mortgage Loan Originator from Wisconsin offers Mortgage Payment Protection to all her qualified borrowers.

If you have questions about Mortgage Payment Protection or would like to discuss mortgage origination system integration, please contact Chuck Cashman at 800.356.2644 Ext. 665.7161.

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Mortgage Payment Protection is the marketing name for Group Mortgage Protection Insurance which may include Life and Disability Insurance underwritten by CMFG Life Insurance Company and Involuntary Unemployment Insurance underwritten by CUMIS Insurance Society, Inc. Life, Disability and/or Involuntary Unemployment are not available in all states.

Credit Insurance Rewrite Progress Report

We are gearing up for a productive year, pushing the CI Rewrite project closer to the finish line in 2017.

Here’s a recap of what we’ve accomplished on the project to-date:

  • New forms and rates have been deployed in Iowa, South Dakota, Pennsylvania, Florida, New York, Montana, Mississippi, Kansas, Texas, Michigan, New Mexico, Georgia, Louisiana, Utah, Minnesota, Ohio, Maryland, Kentucky, New Jersey, West Virginia, Wisconsin, Idaho, Alabama, Indiana, Tennessee, Rhode Island, Colorado and Nebraska.
  • Implementations are in progress in Oklahoma, Missouri, Delaware, Massachusetts, Connecticut, Wyoming, Arizona, Illinois and Washington D.C. We are just getting started in North Dakota, Oregon, Washington, New Hampshire and Arkansas.
  • New forms and rates have been filed in Hawaii, Vermont and North Carolina with deployment pending approval. 
  • View map showing our progress. 
  • Changes to Single Premium Formulas: To help you stay current on Single Premium formulas, here is a chart showing formulas currently in effect by state. 

We know it has been a long-haul with changes and extended implementation dates. We appreciate all that you and your staff have done to help deliver a good customer experience for our shared credit union customers.

If you have questions or comments about the project, please contact Joe Schubert at 800.356.2644 Ext. 665.7754.

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates.  MEMBER’S CHOICE® Credit Life and Credit Disability Insurance are underwritten by CMFG Life Insurance Company.

GAP Program Update

In the coming months, your credit unions may be requesting GAP Waiver Agreement mapping assistance. CUNA Mutual Group plans to add new text in the files for GAP documents.  Also, there will be new fields and corresponding values added to the CUSpecificDataINF.txt file for GAP forms.  Additional details regarding the field names will be provided as soon as they are available.

If you have questions or comments about the project, please contact Dan Fandrey at 800.356.2644 Ext. 665.7237.

Updates From Data Processor Solutions

Calculation Engine Update

CUNA Mutual is planning to release a new version of the calculation engine the week of April 4. The new version will include these enhancements and fixes to the Real Estate and Disclosure Calculation Engines.

Real Estate Engine:

  • Added the ability to create up to four amortization files when processing a Closing Disclosure or Loan Estimate request. These would be for the rate changes going to the maximum rate, rate changes going to the minimum rate, the known rates, and the known rates with payment protection.

Disclosure Engine:

  • Disabled the European APR calculation.
  • Added a variable for passing the original loan date. This would be used for calculating truncated coverage when servicing a loan.
  • Added a variable for passing an uncollected payment protection amount. This would be used for servicing a loan with payment protection.

Both Real Estate & Disclosure Engines:

  • Added a tag to control a ‘Bucket Balance’ column for the payment protection total in the amortization file.
  • Changed how the minimum term eligibility check works when there is joint coverage on the loan.
  • Correct the termination date returned from the calc engine when using a truncated debt protection product.
  • Include 8 digits for the credit life rate in the amortization file and XML output file.


If you aren’t currently using the calc engine and would like to explore using it with your application, please contact Data Processor Solutions.

XML Rate File Changes Coming Early in April

We’ve been in touch with most of you that use our calculation engine and XML rate files about the changes we’re making to the XML rate files.  Thanks to those system providers who have completed testing to determine if the planned changes will have impacts on your system or our mutual clients. The testing feedback has been very positive so we’ve set a tentative implementation date for April 9 to install the changes.  

XML rate files generated after April 9 will contain the changes, which are being made in order to shorten the “PlanDesc” field and reduce the need for manual edits. The files will be “phased in” so credit unions with changes to their coverage or that request a new file will get them (not all credit unions at once).

If you’d like the specifics of what’s changing or have questions, contact Data Processor Solutions.

Form Number 10006192-0316  © CUNA Mutual Group, 2016. All Rights Reserved.