Trump Administration Deregulates Mortgage Lending, Leaving Credit Unions Out

WASHINGTON— President Donald Trump signed an executive order on March 13, 2026, directing federal regulators to overhaul a range of mortgage lending rules. The White House stated the move is intended to reduce compliance costs, revive community bank participation in home lending, and make mortgages more accessible for creditworthy borrowers. [1]

Key Provisions of the Executive Order

The order instructs the Consumer Financial Protection Bureau (CFPB) to tailor mortgage rules for smaller lenders, including modernizing documentation requirements and revising Home Mortgage Disclosure Act (HMDA) reporting to reduce compliance burdens and address borrower-privacy concerns. [1] It also calls on federal banking regulators to shift supervisory expectations toward prudent underwriting rather than what the administration described as overly technical, process-driven reviews.

the order targets broader structural barriers in mortgage finance. Regulators are directed to consider changes to capital and liquidity rules, expand access to longer-dated Federal Home Loan Bank (FHLB) advances tied to residential mortgage assets, and create targeted FHLB liquidity programs aimed at entry-level housing, owner-occupied purchase loans, and small residential builders. [1] Modernization of appraisal rules, including broader use of alternative valuation models and fewer appraisal requirements for lower-risk transactions, is also encouraged.

The executive order also promotes digital mortgage modernization, including wider use of electronic signatures, e-notes, and remote online notarization. [1]

Credit Union Concerns

The Defense Credit Union Council (DCUC) welcomed the Administration’s focus on expanding access to homeownership and reducing unnecessary barriers to responsible mortgage lending. However, the DCUC expressed concern that the executive order appears to focus regulatory relief primarily on community banks without specifically referencing credit unions, including those serving military communities.

In a letter to Treasury Secretary Scott Bessent, DCUC President and CEO Anthony Hernandez argued that overlooking credit unions creates unequal treatment. Hernandez stated, “when regulatory relief is extended to one segment of the financial services sector even as another segment serving the same communities is overlooked, the result is not neutrality—it is unequal treatment.” [2]

Hernandez highlighted that credit unions and community banks often operate in the same communities and serve similar borrowers, both facing rising compliance costs. He also pointed out statutory limitations faced by credit unions that banks do not encounter, such as caps on member business lending and field-of-membership restrictions. [2]

The DCUC has requested clarification from the Treasury Department regarding the omission of credit unions and whether they will receive comparable consideration as federal agencies implement the Executive Order. [2]

Broader Context: Trump Administration and Consumer Protection

This executive order aligns with the Trump administration’s broader efforts to reduce regulations impacting financial institutions. The administration has also escalated its assault on the US Consumer Financial Protection Bureau (CFPB), claiming the agency overstepped its authority. Reports from early 2025 indicated the administration ordered the CFPB to halt nearly all work, effectively shutting down the agency created to protect consumers after the 2008 financial crisis. [3]

Critics argue that these deregulatory measures could increase risks for consumers, while proponents maintain they will stimulate lending and economic growth.