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News Now

Washington
CFPB-NCUA webinar addresses broad CU issues
WASHINGTON (2/10/12)—In a joint Town Hall session with the National Credit Union Administration (NCUA), Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said bank overdraft protection programs (ODP) are one of the areas on the bureau's radar screen.

Responding to a question from a credit union participant in the webinar who asked whether the bureau was going to review overdraft protection programs, Cordray said the bureau is looking at bank products, such as ODP, but that there is no news to report at this time regarding what the bureau will do.

Cordray added that there are area where the bureau might be willing to forego a formal regulatory process and just "talk through" problems.

For instance, the CFPB leader noted that he is seeing movement toward simplified and shortened credit card disclosures. He said that if there can be improvements for consumers without constraining financial institutions with more regulations, that could be a workable approach.

Cordray mentioned in his prepared remarks that the CFPB is seeking comments to streamline the regulations that have been shifted to its jurisdiction "without losing value for consumers," and urged credit unions to comment.

On another topic, a credit union representative asked Cordray whether the bureau will come out with additional guidance on the issue of multi-featured, open-end lending (MFOEL), a Regulation Z issue.

The NCUA issued guidance (see resource link) in 2010 to help federal credit unions comply with certain Federal Reserve Board changes to the Official Staff Commentary to Reg Z, but confusion still abounds for credit unions concerning the concept of "occasionally or routinely" verifying certain credit information as well as the verification of credit information in connection with a consumer's request for certain advances under a multi-featured open-end lending plan.

Multi-featured, open-end lending has been used by credit unions as a tool to assist in establishing long-term borrowing relationships with their members for over 30 years, and has served as a convenient way for consumers to obtain advances at the point of a transaction.

Cordray acknowledged that he was unaware of the issue until it was raised with him by the Credit Union National Association. He said he has no immediate answers to the problems, but will have discussions with credit unions and the NCUA to determine what, if anything, should be done.

NCUA's Matz at the joint webinar Wednesday addressed a recent development where the North Carolina credit union regulator allowed State Employees CU to make its CAMEL rating public and said the NCUA had no choice but to end its joint examinations. (See News Now, Feb. 9: NCUA addresses N.C. exam situation.)

She also addressed new rules on credit union service organizations and trouble debt restructuring loans.  For more on these issues, use the resource link below to access the Credit Union National Association's CompBlog posting (members only).
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