Archive - 2012 Comment Letters
|National Credit Union Administration
CUNA strongly opposes the agency’s proposal because it is inconsistent with the Federal Credit Union Act
(FCU Act) and Executive Order No. 12612. CUNA believes the agency has not provided sufficient information
to justify the need for the proposal and we urge NCUA to withdraw the proposal.
CUNA responds to NCUA’s invitation for recommendations for regulatory relief for credit unions. Several of
CUNA’s recommendations fall under one or more of the regulatory provisions that are included on the agency’s
2012 Regulatory Review list. In light of that, this letter addresses our comments on rules included on the
review list as well as recommendations for other provisions in NCUA’s rules.
We commend NCUA for continuing a rulemaking process regarding the limited use of derivatives within natural
person credit unions to help manage their risks associated with rising interest rates. Currently, NCUA
permits a limited number of FCUs, on a case-by-case basis, to engage in some derivatives transactions to
hedge IRR through an investment pilot program. In our view, state as well as federally chartered credit
unions should be able to engage in derivatives as a permissible investment activity in order to manage
interest rate risk (IRR). CUNA also supports derivatives authority through a third-party for well-managed
credit unions and independent authority for certain credit unions with adequate derivatives experience.
CUNA understands that Section 342 of the Dodd-Frank Act, regarding Minority and Women Inclusion, must be
implemented and that NCUA is obliged under Section 342(b)(2)(c) to develop standards for "assessing the
diversity policies and practices of entities regulated by the agency. However, we urge that NCUA, through
its Office of Minority and Women Inclusion (OMWI) implement such standards in a manner that would minimize
the information gathering and reporting burden on credit unions. CUNA commends NCUA in its efforts thus far
in working towards developing these standards, and is pleased that CUNA members were invited to participate
in NCUA’s first roundtable discussion on February 29, 2012. CUNA and its members urge OMWI to carefully
consider the challenges credit unions face in complying with any standards that NCUA will develop under
Section 342, especially relating to the difficulties involved in manually gathering diversity related data
from employees, contractors, and suppliers. Since it is not required under the statute, and because it would
be unduly difficult - and perhaps impossible - for our members to collect information relating to diversity
of suppliers and contractors, CUNA recommends that OMWI exclude data relating to contractor and supplier
relationships from any assessments it will implement under Section 342. CUNA and its members are also
concerned that OMWI’s diversity-related assessments could lead to additional and unnecessary burdens for
credit unions. Accordingly, CUNA asks NCUA to limit any Section 342 assessment standards to collecting
employment-related data from credit unions that are subject to EEOC reporting requirements. We understand
this is the approach NCUA currently plans to take, and would be pleased with such outcome. CUNA also asks
OMWI to permit credit unions to self-report any data under Section 342 assessments, rather than subject
them to additional examination burdens.
CUNA believes the proposal is an important step forward in terms of guidance and reporting requirements for
TDRs, and would provide regulatory relief on TDRs generally. Even so, there are some important issues that
we believe must be addressed in the final rule, which are described in more detail our Comment Letter. One
general issue is that some credit unions are concerned that their accounting practitioners may not agree
that the proposal's treatment of TDRs is consistent with GAAP and NCUA should address that concern more
thoroughly in the Supplementary Information accompanying the final rule.
CUNA does not support The National Credit Union Administration’s proposed rule, Eligible Obligations, Charitable
Contributions, Nonmember Deposits, Fixed Assets, Investments, Member Business Loans, and Regulatory Flexibility
(RegFlex) Program. When RegFlex was initiated in 2001, CUNA was a strong proponent of the approach to regulation
that was the foundation of the program. It rewarded well-managed credit unions (generally CAMEL 1 or 2 rated and
well-capitalized) with relief from regulatory requirements that were not mandated by the Federal Credit Union Act
and were unnecessary for safety and soundness reasons. While some aspects of the current proposal could have a
positive impact in certain areas, as discussed in the letter, the capacity of the proposal to actually help credit
unions achieve real regulatory relief will be limited.
CUNA has serious concerns and does not support a new regulation that would require all federally insured
credit unions to develop and maintain access to federal sources of liquidity that are approved by NCUA. CUNA
does agree with NCUA that monitoring and managing liquidity by credit unions, particularly larger ones, is
very important for a smooth functioning payment and financial system, however, in CUNA’s view, such an overly
broad approach is inconsistent with the Interagency Policy Statement on Funding and Liquidity Risk Management
(which was jointly issued by NCUA and other federal financial regulators) and the Basel Committee’s Principles
for Sound Liquidity Risk Management. Both of these policy pronouncements recommend that financial institutions
should maintain contingency liquidity plans commensurate with the risk profile of the institution, but stop
short of directing specific provisions be included in the liquidity plans and do not designate the sources of
In the strongest terms appropriate, CUNA urges the Board to withdraw the proposal as issued. In today’s
overregulated environment, this proposal would add to the regulatory burden of affected credit unions in a manner
that is wholly disproportionate to the risks associated with loan participations. While the proposal seeks to
address concentration risks and other issues the agency has identified concerning loan participations, it would do
so at the price of severely limiting, if not eliminating, sound participation programs that serve credit unions,
their members, and other credit unions well. The proposal would also seriously undermine lending programs and even
earnings for some credit unions.
CUNA generally agrees that the three proposed interagency Q&As regarding force placement of flood insurance
are consistent with the National Flood Insurance Reform Act of 1994 Act and its regulations. These interagency
Q&As last updated in 2009 serve as guidance on flood insurance requirements for credit unions and other financial
institutions, agency personnel, and the public. The three proposed interagency Q&As are intended to provide
clearer guidance about the force placement of flood insurance, to clarify additional areas and avoid potential
|Commodity Futures Trading Commission (CFTC)
CUNA supports the proposed clearing exemption for credit unions. As not-for-profit cooperatives, all well managed
credit unions, consistent with safety and soundness, should be able to elect not to clear swaps that are for the
purpose of hedging interest rate risks. We believe the proposed exemption would help minimize the additional costs
and fees associated with mandatory clearing and provide flexibility for credit unions to use non-cleared swaps.
|Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (Bureau), National Credit Union Administration (NCUA), Federal Deposit
Insurance Corporation, Federal Housing Finance Agency, and Office of the Comptroller of the Currency (collectively,
the Agencies) have jointly issued a proposal to amend Regulation Z, which implements the Truth in Lending Act (TILA).
This proposal implements the appraisal requirements for extensions of credit for "higher-risk mortgage loans required
by the Dodd-Frank Act. The proposal was developed jointly by the Agencies and will apply to federally insured credit
unions, among other lenders. CUNA strongly opposes a number of components of this proposal and those views are detailed
in our comment letter.
This letter represents the views of the Credit Union National Association (CUNA) on the Consumer Financial Protection
Bureau’s (Bureau) proposed rule to amend Regulation B, Equal Credit Opportunity Act (ECOA), to require creditors to
provide certain loan applicants with a copy of an appraisal and valuation in connection with credit to be secured by
a first lien on a dwelling. Currently, § 1002.14(a) of Regulation B allows a creditor to provide the applicant with
a copy of the appraisal report upon request.
CUNA, along with several other financial services trade associations, filed a follow-up comment letter
with the CFPB to reiterate our concerns on the QM under the pending Ability to Repay proposal. The letter
expresses continued strong support that a QM meets the following: it be broadly defined; it utilize objective,
bright line standards; and it include a safe harbor from ability to repay litigation.
The CFPB requests for comments on issues relating to the implementation of combined disclosure
requirements under TILA and RESPA and the delayed effective date of certain disclosure requirements
under Title XIV of the Dodd-Frank Act. We support the CFPB’s proposed delay of the Title XIV
disclosures to coincide with the adoption of the combined TILA-RESPA disclosures.
CUNA has concerns with the CFPB’s proposed rule to amend Regulations X and Z to implement
changes to TILA and RESPA, which expand the types of mortgage loans that are subject to
the protections of the Home Ownership and Equity Protection Act (HOEPA), by revising and
expanding the triggers for coverage under HOEPA, and by imposing additional restrictions
on HOEPA mortgage loans. We urge the CFPB to allow flexibility where possible to creditors
to reduce the compliance burden associated with this and other rules the Bureau is proposing.
The CFPB is seeking additional information on the use of reverse mortgages, consumer use of the loan proceeds,
and business practices on reverse mortgages and while CUNA supports the CFPB’s efforts to understand more about
reverse mortgages and to prevent abusive and deceptive practices on such products, we urge the agency to approach
the regulation of reverse mortgages by first identifying abusive characteristics associated with some, but not all,
reverse mortgages, and to focus on minimizing if not eliminating these harmful practices on the part of those who
have a record of engaging in them.
CUNA supports efforts by the CFPB to help seniors avoid financial exploitation and to encourage responsible decisions
regarding financial management. As financial cooperatives, credit unions provide a full range of financial services,
including financial management, retirement planning, and credit counseling to all their members, including seniors and
their families. We urge the CFPB to recognize and consider how to protect the needs of seniors, while minimizing
additional compliance burdens on credit unions.
CUNA strongly agrees that non-depository institutions engaging or that have engaged in conduct that poses risks to
consumers with regard to consumer financial products or services should be subject to the most rigorous consumer
protection supervision, regulation, and enforcement, as contemplated by the Dodd-Frank Act (Act). We believe the
CFPB has taken an appropriate step in that direction in developing procedures to supervise and examine certain non-
depository institutions that were not subject to meaningful consumer protection supervision prior to the enactment
of the Act. We support these efforts that maintain a bright line between entities subject to its rulemaking and
regulated entities that should not be.
CUNA supports the goals of safe and transparent disclosures and appropriate consumer protections on GPR prepaid
cards, which offer many benefits for consumers, including a higher proportion of the underserved. We urge the
agency to minimize additional requirements and compliance burdens for credit unions that offer prepaid cards, so
prepaid cards remain accessible and to promote payments innovation. Further, we have concerns that the potential
application of certain Reg E requirements may not be appropriate for the different risks and attributes of GPR
The CFPB recently proposed its policy statement regarding disclosure of consumer complaint data for financial
institutions with at least $10 billion in assets. Under this proposal, the Bureau would simply duplicate the final
policy statement—that was recently adopted for credit card complaints—for complaints related to all other types of
financial products and services. The Bureau should continue to take proactive steps to coordinate with the other
regulators and to minimize regulatory burdens. Further, CUNA does not support the public release of certain
complaint information that is separate from and in addition to the Bureau’s periodic reports and analyses that
provide more complete complaint information to consumers.
In response to the CFPB’s request for information for its study on pre-dispute arbitration agreements, CUNA stated
that regardless of the precise scope and method the CFPB determines is most appropriate for its study, we urge the
agency to take into consideration and minimize the potential burden imposed on credit unions as a result of the
CUNA believes the CFPB should fully understand and minimize the potential implementation and ongoing compliance
costs and unintended consequences on credit unions from its potential new regulations. Because this information
collection regarding compliance costs will also impose costs and burdens, we urge the CFPB to minimize such
costs and burdens associated with this information collection by using limited, targeted questions, as well as
efficient information collection methods.
This comment letter represents the views of the Credit Union National Association (CUNA) in response to the
Consumer Financial Protection Bureau’s (CFPB) proposed rule to amend Regulation Z, Truth in Lending Act
(TILA), regarding the total amount of fees that a credit card issuer may charge a consumer with respect to
the consumer’s credit card account. It is CUNA’s understanding that credit unions do not generally charge
fees prior to account opening. CUNA agrees that the CFPB does not have authority under TILA to impose limits
on fees prior to account opening. Nonetheless, CUNA is concerned that the proposal would open the door to
additional fees for consumers from unscrupulous credit card issuers seeking to maximize profits
We appreciate the opportunity for Mr. McMinn to participate in the field hearing to offer insight into the
practices of Listerhill and credit unions generally with regard to short-term lending. CUNA and its member
credit unions are committed to providing a safe and affordable alternative to predatory payday lenders.
CUNA strongly agrees that non-depository institutions, including consumer debt collection and consumer reporting
entities, should be subject to meaningful consumer protection regulation and enforcement, as contemplated by the
Dodd-Frank Wall Street Reform and Consumer Protection Act. In that connection, we believe the CFPB has taken an
appropriate initial step to supervise and examine certain non-depository-institutions that were not subject to
meaningful consumer protection supervision prior to the enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). In light of this, CUNA urges the CFPB to define non-depository-institution "larger
participants in a manner that provides the agency with the authority to ensure that consumers receive the same
consumer protections under law from non-depository-institution financial service providers as they receive today
from credit unions and other depository institutions.
CUNA supports efforts under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act)
to consolidate the mortgage disclosures currently required by the Truth in Lending Act ("TILA) and the Real
Estate Settlement Procedures Act ("RESPA). In General, CUNA supports providing consumer disclosures that are
meaningful and clear for borrowers to understand the important terms of a financial transaction, yet not overly
burdensome for credit unions to properly complete, generate, deliver and explain to mortgage loan applicants.
However, there are several aspects of the proposals under consideration and alternatives considered with which
CUNA would like to provide additional comments and suggestions to the CFPB prior to the issuance of a proposed
rule in this important area.
While CUNA appreciates the objectives of the Consumer Financial Protection Bureau’s proposal to clarify that
the submission of any information to the CFPB for regulatory or supervisory purposes does not affect the
privilege that has been asserted under the federal or state law with respect to any other person or entity,
CUNA does have some concerns related to this proposal. It is not certain that the CFPB can alter the rules
of common law that generally govern the privilege and when it is waived. CUNA is also concerned that if the
CFPB adopts these regulatory amendments, it may be encouraging the Senate not to act, thus foregoing an important
opportunity to provide a stronger statutory basis for the protection of privilege than the CFPB’s rule would
afford, given the current uncertain legal foundation. We urge the CFPB to consider the impact of its actions
on the advancement of the legislation in the Senate and to postpone its rulemaking, pending review by the
Credit unions remain very frustrated that few of their concerns were addressed in the final rule on remittance
transfers. Credit unions provide these transfers to their members as one of many services they offer and are
not in business solely to offer remittance transfers. They are not seeking to charge exorbitant fees or to
prevent consumers from having reliable information about their transactions. Nonetheless, due to the impact
of the final rule, a number of credit unions will simply stop providing remittance transfers to their members
unless the current proposal is revised sufficiently to provide meaningful relief to credit unions from
requirements in the final regulation. Unless the Bureau adopts our suggested changes, the remittance
transfers final rule’s high compliance costs and legal liabilities that will be imposed on transfers through
"open networks" including international wires, such as the Society for Interbank Financial Telecommunication
(SWIFT), or international ACH through unrelated correspondent institutions (that are outside of the sender’s
control) will force credit unions with relatively small volume international payments programs to eliminate
such programs since they will no longer be economically sustainable.
This is a very important undertaking by the agency and one that CUNA has strongly encouraged.
Under Executive Orders 13563 (January 2011, Improving Regulation and Regulatory Review) and 13579
(July 2011, Regulation and Independent Regulatory Agencies), the Obama Administration has called upon
independent regulatory agencies to do much more to curtail requirements and address regulatory concerns.
So far, credit unions have not experienced any real benefits from the orders even though throughout the
economic crisis, unlike other financial institutions, credit unions continued trying to do their jobs - despite mounting regulatory responsibilities.
CUNA is urging the Consumer Financial Protection Bureau (CFPB) to suspend the duplicative ATM notice requirements
under Reg E to no longer mandate these duplicate notices. Additionally, we urge the CFPB to provide more
flexibility on existing disclosure requirements, including additional options to provide disclosures that are
currently required to be in writing to be delivered electronically, consistent with the E-SIGN Act. Finally,
we are asking that the CFPB provide meaningful relief for credit unions and other financial institutions under
the remittances transfers final rule which was recently issued, as credit unions are concerned that they may
have to cease offering international wire and international ACH products or provide them at substantially higher
costs due to increased compliance costs and legal liabilities under the final rule.
Regulation Z (Reg Z) is one of the most complex and costly regulations to implement for credit unions and
it is at the top of the list for most of CUNA’s members in terms of rules that need to be simplified. To
that end, CUNA, working with our Consumer Protection Subcommittee and our Lending Council, is undertaking
a review of Reg Z, and we hope to provide additional comments and recommendations to the Bureau by this
summer at the conclusion of that review. There are some issues that CUNA members have flagged to us
regarding their concerns with Reg Z, which we address in this letter.
This comment letter represents the views of the Credit Union National Association (CUNA) regarding the Consumer
Financial Protection Bureau’s (CFPB’s) republished Regulation V - Fair Credit Reporting (Reg V), which implements
the Fair Credit Reporting Act. The interim final rule substantially incorporates the inherited regulations from
other agencies and duplicates Reg V from the Federal Reserve Board (Fed), making only certain non-substantive,
technical, formatting, and stylistic changes, and does not impose any new substantive obligations on persons
subject to the existing regulation.
CUNA applauds the CFPB for its approach on combining the RESPA and TILA forms under its "Know Before You Owe
mortgage project, and CUNA’s inclusion on the working groups the agency has established for direct feedback on
the forms’ revisions. In this letter, CUNA is also urging the CFPB to consider placing into one location all
guidance and instructions with respect to the proper completion of these forms, as the agency continues to
complete this phase of the Dodd-Frank Act mandates. Additionally, CUNA has asked for sufficient time for
lenders to implement any new rules that may be promulgated in the future which would affect Reg X, and has
urged the CFPB to allow for at least one full calendar year beyond the date a final rule is promulgated when
implementing any mandatory compliance date within such a rule. CUNA has also urged the CFPB to examine certain
definitions within Reg X and to make such definitions consistent, where permissible and where appropriate, with
similar definitions located in either other regulations that fall under the purview of the CFPB or the
underlying statute of the rule. CUNA has asked the CFPB to provide additional clarifications and examples
as to what does and does not constitute a "thing of value in connection with the prohibition of referral
fees in connection with Section 8 of RESPA. Finally, CUNA has urged the CFPB to consider the difficulties
that many credit union lenders face when determining whether a particular loan is covered by Reg X, Reg Z or
both for purposes of determining the appropriate consumer protection disclosures that must be provided.
The interim final rule substantially duplicates the rule of the Federal Reserve Board (Board) under the Act,
Regulation B, 12 C.F.R. Part 202, and incorporates the appendixes, model forms, and supplements that were
included with the Board’s regulation. The rule has been edited to include wording and other technical revisions
required by the Dodd-Frank Act but the changes are not intended to impose any new substantive requirements on
entities covered by the regulation. CUNA strongly supports equal opportunities for consumers and small businesses
to belong to and benefit from credit unions, which routinely seek to serve their members and communities by
providing favorable rates on loans and savings.
The Dodd-Frank Act requires the CFPB to assume authority relating to Regulation P. The CFPB combined the
Regulation P rules of eight different agencies into one comprehensive interim final rule. In its comment
letter, CUNA requests that the CFPB consider removing the requirement that financial institutions send an
annual privacy notice to every consumer with whom the institution has a continuing relationship. CUNA
recommends amending the annual privacy notice requirement to require financial institutions to provide a
This would not affect the existing requirement that the institution provide an initial privacy notice to
the customer at the time the relationship is established. Eliminating the annual privacy notice requirement,
regulatory burden on financial institutions. CUNA understands that any change to this requirement may
require a legislative amendment to Section 503(a) of the Gramm-Leach-Bliley Act. We encourage the CFPB to
seek this legislative change in the event it is necessary.
While CUNA recognizes that the Rule substantially duplicates the rules previously promulgated by the OCC, the
Federal Reserve Board, the FDIC, the OTS, the Farm Credit Administration, and the National Credit Union Administration
(NCUA) and does not impose any new substantive obligations on regulated entities, CUNA wishes to take this opportunity
to provide input to the CFPB concerning the substance of the Rule itself. In particular, CUNA has had longstanding
concerns, which we have provided to NCUA, regarding the use of certain terms in the rule.
The CFPB has issued an interim final rule to republish (as the CFPB’s new Reg C) the Federal Reserve Board’s
Regulation C which implements the Home Mortgage Disclosure Act. While this interim final rule does not cover the
new required data elements under HMDA which are required as part of the Dodd-Frank Act, CUNA is urging the CFPB to
consider additional regulatory burdens and costs which may be placed on covered credit unions under any future rules
promulgated by the agency. CUNA is also advocating for a change in the procedures concerning data collection on
ethnicity, race and sex with respect to mortgage loan applications which are taken in person, but elects not to
provide this information to the lender, to be more in line with those applications which are taken via mail,
telephone or internet. Additionally, CUNA is urging the CFPB to harmonize, where permissible and where appropriate,
certain definitions within Regulation C with either other regulations that fall under the purview of the CFPB or the
underlying statute of the regulation. Finally, CUNA asks that the CFPB work to minimize the regulatory burden
associated with HMDA reporting on credit unions of all sizes.
The CFPB has issued an interim final rule to republish (as the CFPB’s new Reg M) the Federal Reserve Board’s
Regulation M which implements the Consumer Leasing Act of 1976. CUNA believes the Reg M interim final rule is
consistent with the existing regulation, but we urge the CFPB to streamline its inherited regulations, including Reg
M, by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions. We also urge the
agency to minimize the overall regulatory burdens and costs for credit unions in the event the CFPB decides to alter
existing requirements concerning the uniform cost and other disclosure requirements relating to consumer lease
transactions under Reg M.
The CFPB has issued an interim final rule to republish (as the CFPB's new Regs N and O) the FTC's regulations
concerning unfair and deceptive acts and practices (UDAP) regarding mortgage advertising and mortgage assistance
relief services. Although we support the goals of Regs N and O, which are primarily to protect the consumer, we
ask the CFPB to consider how the requirements of these regulations can be minimized for state-chartered credit
unions since it appears these entities are covered under general rulemaking authority to address unfair and
deceptive acts and practices rather than specific provisions related to credit unions.
The Dodd-Frank Act requires the Consumer Financial Protection Bureau (CFPB) to assume regulatory authority regarding
disclosures and other requirements for non-federally insured depository institutions, such as privately insured credit
unions, under the Federal Deposit Insurance Act (FDIA). CUNA is not seeking changes to the regulation at this time.
However, we encourage the CFPB to work with American Share Insurance Company regarding the implementation and
enforcement of Regulation I.
The CFPB has issued an interim final rule to republish (as the CFPB’s new Reg F) the procedures that states may
use to apply for exemption from the Fair Debt Collection Practices Act, as implemented by the FTC. While only a
small number of credit unions participate in debt collection services covered by Reg F, CUNA’s comment letter
asks the CFPB to thoroughly analyze this and subsequent CFPB rules to identify changes in the rules that would
minimize the regulatory compliance burden on credit unions, and then initiate the process for making such changes,
in instances where the agency believes it has adequate authority to do so.
CUNA supports the ability of consumers to have timely and clear information on responsible credit card use. However,
we do not support the public release of certain credit card complaint information that is separate from and in
addition to the agency’s periodic reports and analyses, which provide more complete credit card complaint information
to consumers. While we do not anticipate that credit unions, as member-owned cooperatives, will be the subject of a
sizable number of complaints, nonetheless we have concerns the proposed public data release could have unintended
CUNA and its members support the CFPB’s efforts to gather information regarding private student lending and to
study closely the private student lending market, consistent with your authority under the Dodd-Frank Act. There
are about 300 credit unions that currently offer student loans to their members and they want to ensure they are
providing lending products that have favorable rates and other terms and that their members understand their
obligations under the loan agreement, as credit unions do with other loans provided to their members. In that
connection, we encourage the CFPB to be mindful of the positive role credit unions play in providing student
loans to members pursuing educational opportunities. We also encourage the CFPB to continue to take an analytical
and deliberative approach to its information gathering and rulemaking efforts, particularly with regard to
generating a report regarding private education loans and private education lenders and with any follow-up
actions. Along these lines, to the extent the CFPB has authority to do so, we encourage the CFPB to study the
costs of higher education, the value received from higher education, and its costs on students and their families,
and provide a report to Congress on its findings.
CUNA supports the CFPB’s core objective in its mortgage servicing forms information gathering effort to help
refine specific features of the content and design of the mortgage servicing model forms to maximize communication
effectiveness while minimizing compliance burden. CUNA encourages the CFPB take the same analytical and deliberative
approach it has taken thus far with respect to its various information gathering and rulemaking efforts, by seeking
information from a broad sample of industry participants and by releasing several draft model servicing forms for
comment during the drafting period. We ask that CFPB gather information from participants in all areas of the
mortgage servicing market, including credit unions and other small mortgage lenders and servicers. CUNA also
requests that this process place emphasis on the compliance burden associated with adopting new model forms,
and that the CFPB ensure that any compliance burden for servicers is minimized - especially for small servicers.
Provided these steps are effectively taken, CUNA believes that this information gathering process could help
minimize any compliance burden associated with adopting new model servicing forms, particularly for small
|Federal Deposit Insurance Corporation (FDIC)
We are submitting comments to seek clarity that credit unions should not be covered under this proposal and
Title II of the Dodd Frank Act. CUNA believes that credit unions should not be considered entities subject
to the proposed definition of "predominantly engaged in activities that are financial in nature or incidental
thereto for the purposes of the Ordinary Liquidating Authority (OLA) under Title II of the DFA. The OLA
should only apply to "systemically risky entities that did not previously have federal resolution
|Federal Housing Finance Agency (FHFA)
CUNA is generally opposed to the FHFA’s proposed rule which would amend the community support regulation to
require the Federal Home Loan Banks (FHLB), as opposed to the FHFA, to monitor and assess the eligibility of
each FHLB member for access to long-term advances through compliance with the Community Reinvestment Act of
1977 and first-time homebuyer standards. CUNA has significant concerns that the proposed rule would require
the FHLBs to act as regulators of their members, if finalized as proposed.
CUNA and its members urge FHFA to release further details on each proposal laid out in the Discussion Paper, and
to refrain from making any changes to the servicing compensation structure until the future of the GSEs are
determined and national servicing standards are developed. While we understand FHFA’s objectives, it is
impossible to understand at this point what the effects of either proposal will be on credit unions and on
the industry as a whole. We also believe any change in servicing compensation at this point is premature,
in light of the myriad servicing standards proposals flowing from various initiatives by agencies, legislators,
and Attorneys General. CUNA and its members are also concerned that the reduction in servicing compensation
proposed under either option will lead to consolidation in the industry, driving out the small servicers and
significantly reducing competition.
|Federal Trade Commission (FTC)
The FTC proposal would revise the existing Child Online Privacy Protection Act (COPPA) rules established in
2000 to change their parental consent and disclosure requirements, among other things. CUNA supports the FTC’s
efforts to protect children. We urge the agency, however, to modify several aspects of the proposal in order
to make it easier for credit unions to obtain parental consent under the COPPA rules and limit unnecessary
disclosure requirements. Credit unions frequently provide savings accounts and other limited services to
children and seek to help them develop productive savings habits. Credit unions also provide children and
other minors with financial literacy education that will serve them well as financial service users and borrowers.
Many credit unions engage in youth outreach using CUNA’s Googolplex, a financial literacy website for young
people, as well as the National Credit Union Foundation’s "Biz Kid$ financial literacy initiative that
teaches children and teens about money and business.
|Financial Accounting Standards Board (FASB)
CUNA strongly opposes this proposed regulation and is urging FASB to exclude credit unions from the coverage
of the proposal. Credit unions are not publicly traded entities and CUNA is concerned that this proposal will
treat them as if they are. As outlined in our comment letter, under the proposed ruling, a financial institution
would be required to disclose liquidity risk information and interest rate risk disclosures. A requirement CUNA
believes would be onerous to credit unions in light of the range of information they already provide to their
members and to the government.
We appreciate the Foundation’s initiative in addressing
the issue of whether improvements are necessary for private entity accounting and, if so, how to best
facilitate such improvements. We believe strongly that there is a need for improvements to the accounting
standards that private companies must work under on a daily basis. We agree with constituents, as noted in
the Foundation’s proposed plan, that "complexity in financial reporting is, in many ways, the real problem
for private entities. In regard to the proposed Council, we support the Foundation’s general approach to
address the concerns raised by private entities, and offer several suggestions for the Foundation to consider.
|Federal Housing Finance AgencyDate Published
|Financial Crimes Enforcement Network (FinCEN)
While CUNA supports the objective to improve the tracking of money laundering and terrorist financing, we strongly
urge FinCEN not to proceed with the customer due diligence advance notice of proposed rulemaking (ANPR). We are
concerned that the increased regulatory burdens and costs on credit unions would far outweigh the purported benefits
to FinCEN. We are especially concerned about the potential expansion of the "beneficial ownership requirements.
Credit unions currently face significant challenges to obtain such information. These difficulties would only be
exacerbated if FinCEN proceeds to a final rule. Instead, FinCEN working with the federal financial regulators
should issue specific guidance to address specific problem areas and to clarify the current BSA/AML rules. If
the agency determines it must proceed with a rulemaking, we urge FinCEN to adopt changes that we recommend in
|Housing and Urban Development (HUD)
HUD’s proposal limits the amount of closing costs a seller may pay on behalf of a homebuyer purchasing a home
with financing insured by the Federal Housing Administration (FHA). HUD previously sought and received comments
on this proposal on July 15, 2010, as one of three initiatives proposed to help restore the Mutual Mortgage
Insurance Fund (MMIF) capital reserve account. HUD is proposing implementing a cap of $6,000 or 3%, whichever
is greater, on the concessions a seller may pay on behalf of a homebuyer in purchasing a home insured by FHA.
HUD is also proposing narrowing the definition of acceptable concessions to limit seller payments to the following:
(a) the borrower’s actual costs to close on the loan, (b) the up-front mortgage insurance premium due on the loan,
and (c) an interest rate buydown. CUNA submitted a comment letter on August 16, 2010 on HUD’s previous proposal,
and reiterates its previous comments, supporting HUD’s proposal to institute a cap of $6,000 or 3%, whichever is
greater, on the concessions a seller may pay on behalf of a homebuyer in purchasing a home insured by FHA. CUNA
supports including a $6,000 dollar limit as an alternative to a 3% cap to avoid the possibility that the 3% cap
could have a disproportionately negative impact on borrowers with low and moderate incomes who are purchasing
moderately priced homes. CUNA also supports HUD’s proposed narrowing of the definition of acceptable concessions
paid by the seller.
HUD proposes eliminating the process for requesting alternative FHA maximum mortgage amounts. Because HUD now has
direct price data through CoreLogic for over 2,000 counties, as well as indirect price data for an additional 1,200
counties, only ten counties out of the total 3,234 counties in the United States could qualify for an appeal. But
of those ten counties, HUD believes only one (Lancaster County, VA) could actually qualify for an appeal. Since the
number of appeals dropped to zero in 2010, HUD finds that the rule permitting a process for requesting alternative
FHA maximum mortgage amounts is outdated and unnecessarily disrupts its loan limit determination process. HUD
expects that if the appeals process is eliminated, it would be able to release its annual loan limits one month
earlier than it has for the past three calendar years (in October rather than November). CUNA and its members
appreciate HUD's efforts to release loan limit data one month earlier each year than it currently does. This will
enable lenders to accept, with certainty, loan applications in November and December conforming to the following
year's loan limits. However, we are concerned that eliminating the appeals process altogether will penalize the
ten counties for which HUD does not have sufficient direct or indirect data to accurately determine a loan limit.
Additionally, even though the number of appeals dropped to zero in 2010 (for the 2011 loan limits), we do not
believe one year is enough time to conclude with certainty that the appeals process is altogether obsolete –
especially given the lackluster state of the current mortgage market. For these reasons, CUNA recommends that HUD
maintain an adequate process by which interested parties in these ten counties may request an alternative loan
limit, at least until HUD has sufficient data (indirect or direct) to accurately calculate an appropriate loan
limit for those counties.
CUNA believes that incorporating a discriminatory effects standard into the Fair Housing Act is premature at this
point. HUD should not consider implementing a discriminatory effects standard until after the U.S. Supreme Court
has reached a decision in Magner v. Gallagher, No. 10-1032. The U.S. Supreme Court granted certiorari in this case
on November 7, 2011 and oral argument is scheduled for February 29, 2012. In Magner v. Gallagher, the U.S. Supreme
Court will review the precise issues that HUD’s proposed rule addresses. The questions presented in the case are
(1) whether a lawsuit can be brought for a violation of the Fair Housing Act based on a practice that does not have
a discriminatory intent but instead has a discriminatory effect, and (2) if so, what test should be used to
determine whether a practice has a discriminatory effect and therefore violates the Fair Housing Act? CUNA is
concerned that implementing a uniform discriminatory effects standard before Magner v. Gallagher is decided could
cause unnecessary confusion for both lenders and borrowers regarding the proper interpretation of the Fair Housing
|Internal Revenue Service (IRS)
CUNA has serious concerns with an IRS proposal to implement provisions of the Foreign Account
Tax Compliance Act (FATCA). CUNA believes U.S. credit unions should not be subjected to any
new requirements as a result of the IRS’s proposed FATCA regulations. In addition to
the comments in our letter, CUNA supports the views of the World Council of Credit Unions, as
provided in its comment letter to the
IRS. In particular, we support the World Council’s remarks regarding the treatment
of “nonregistering local banks” and remittance transfers.
CUNA is generally supportive of the IRS’s advance notice of proposed rulemaking and accompanying draft proposed
rule to establish regulations that would provide general guidance relating to the determination of whether a
retirement plan is a governmental plan within the meaning of § 414(d) of the Internal Revenue Code..
|NACHA (Electronic Payments Association)
CUNA appreciates NACHA’s efforts to standardize person-to-person payments (P2P) on the ACH network, which is
intended to facilitate risk management and payments innovation. We understand that a small but growing number
of credit unions offer P2P services on the ACH network. We urge NACHA to minimize the costs associated with
the proposed changes to standardize P2P payments on Receiving Depository Financial Institutions (RDFIs) and
Originating Depository Financial Institutions (ODFIs), especially for smaller credit unions.
CUNA generally supports NACHA’s proposal on compliance and operational topics to clarify the meaning or intent
of provisions, improve processing efficiency, and eliminate requirements that no longer add value to the ACH
network. While these technical changes are intended to improve the ACH network, we ask NACHA to minimize
additional implementation and compliance costs.
CUNA appreciates NACHA’s efforts to improve the security and integrity of the ACH network. However, while we
generally agree with the objective to improve the security and integrity of sensitive ACH data, we urge NACHA
to minimize compliance costs on all credit unions and minimize redundancy with other data security requirements.
We agree the proposed ACH security framework should be expressed in general terms. The framework should permit
each covered entity to implement ACH security on protected information based on its business and risk needs, help
minimize additional compliance costs and burdens, and ensure consistency with other regulatory responsibilities.
The ACH security framework should not impose specific requirements, such as specific security policies, procedures,
CUNA believes NACHA should minimize costs on financial institutions that process healthcare remittance (reimbursement)
payments on the ACH network. NACHA should continue to permit Receiving Depository Financial Institutions (RDFIs) to
provide healthcare payments information to assist their healthcare receivers based on the capabilities and preferences
of both the RDFI and the receiver. In addition, we offer other recommendations to minimize costs with regard to
healthcare payments processing.
CUNA appreciates NACHA’s objective to provide a new premium same-day, expedited payment service on the ACH network.
However, we believe not all receiving financial institutions should be required to receive and post same-day ACH
payments because of significant implementation and risk management concerns, especially for smaller credit unions and
other financial institutions. Instead, NACHA should permit credit unions and others to opt in to the new EPS service or
conduct a pilot program first to study the extensive effects of the proposal before taking further action.