ALEXANDRIA, Va. (2/13/14)--Concerned credit unions should weigh in on the National Credit Union Administration's risk-based capital proposal and be assured the agency takes comments letters "very seriously," said federal regulator Debbie Matz. She made her remarks during an online event Wednesday with Consumer Financial Protection Bureau Director Richard Cordray and NCUA and CFPB staff members.
Matz went on to say that the NCUA "oftentimes will change a final rule from the proposed version to reflect" public comments received.
Another item both regulators addressed was potential regulatory responses to recent data breaches.
Discussing consumer card safety is a healthy debate, CFPB Director Richard Cordray noted.
NCUA Chairman Debbie Matz said data breaches are a statutory issue, and the U.S. Congress is likely considering action. NCUA does not have the authority to create new data security standards, she said
CFPB staff said data breaches are an area of interest for the agency, but what can be done by individual agencies depends on their jurisdiction. The bureau does not have any immediate plans for its own new data security regulations. However, Credit Union National Associatin President/CEO Bill Cheney has raised this issue with Cordray and CUNA is following up on this with the bureau and other agencies. The Michigan Credit Union League also wrote to Director Cordray on this issue earlier this week. .
On another topic, the CFPB said it is looking at overdraft protection issues, but also recognizes that the overdraft product is a great service for some. The bureau is doing analytical work and likely will not issue regulations on it this year.
Credit union call report data will be examined as the CFPB considers remittance rule changes, including an adjustment to the exemption level for credit unions. The agency is also considering whether it should extend the ability of international remittance transfer providers to use estimates in their disclosures.
In addition, CFPB staff also stressed that the agency's current data collection practices do not put consumers at risk.
Cordray during the town hall encouraged credit unions to continue writing mortgages according to their current underwriting standards and to make non-Qualified Mortgage loans when they think it is appropriate. "We have confidence in your model, you should have confidence in your model," he told credit unions.
The bureau's qualified mortgage rule is not much of an issue for responsible lenders with few foreclosures, Cordray claimed.
Previously CFPB Director Corday has said the agency would look at possible changes to some of its CFPB's mortgage rules; staff on the call said the CFPB is not contemplating revisions to its mortgage loan originator regulations.
CFPB staff indicated the agency is studying payday lending and deposit advance products and there are a number of concerns that have been identified.
A question was asked as to when NCUA would expect total compliance with the CFPB's Qualified Mortgage/Ability to Repay rule. NCUA's Director of Examination and Insurance Larry Fazio responded that the agency would take into consideration a credit union's good faith compliance efforts to comply with the rule, with respect to the examination findings and ratings assigned to credit unions as part of the examination process.
Non-compliance with CFPB regulations can result in fines, and can adversely impact a credit union's CAMEL rating, Matz said.
She also noted that even with all the trade press and a letter from NCUA, 500 credit unions filed call reports late for this past quarter. They will all receive warning letters this quarter. However, there will be no letters next quarter--late filers will receive civil money penalties, she advised.
The NCUA on Wednesday also said it will not know if credit unions can be given Temporary Corporate Credit Union Stabilization Fund rebates until 2021. NCUA Guaranteed Note investors will need to be paid off, and U.S. Treasury borrowings taken out by the agency will need to be repaid, before that can be determined. (See
story: No TCCUSF assessment this year, nor likely going forward.)