Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

July 25, 2014

HMDA rule changes could increase reporting burden

Washington
WASHINGTON (7/25/14)--The negative impact of the Consumer Financial Protection Bureau's proposed changes to Home Mortgage Disclosure Act (HMDA) reporting rules will far outweigh any benefit to credit unions--or their members, Credit Union National Association Associate General Counsel Jared Ihrig said Thursday.
 
In a release, the CFPB unveiled a proposal it said is intended to improve the information reported about the residential mortgage market under HMDA. It also is meant to simplify the reporting process for credit unions and other financial institutions. However, by the CFPB's own estimates, the changes would represent a compliance burden of 4.7 million hours annually for all regulated entities required to report under HMDA.
 
However, Ihrig noted that the proposal adds 37 data fields to the HMDA reporting requirements and also adds a requirement for reporting HMDA information on all Home Equity Lines of Credit (HELOCs).  Currently, reporting on HELOCs is optional.

"CUNA is disappointed to see that the CFPB's proposal contains requirements that are well beyond the statutory requirement carried in the Dodd-Frank Act. The bureau upped that to an unwieldy and unnecessarily burdensome 37 new data fields under the proposal," Ihrig said. According the CFPB's numbers, more than 2,000 credit unions were required to file HMDA reports in 2013.
 
The CFPB's Small Business Regulatory Enforcement Fairness Act advisory panel met earlier this year to discuss possible changes to HMDA rules. Six CUNA-member credit unions on the 21-member panel urged the bureau to consider the compliance burden on small institutions and to only require reporting of those data fields that are statutorily required under the Dodd-Frank Act.
 
Ihrig noted that credit unions also informed the CFPB that requiring HMDA reporting on HELOCs would create great operational complications and a significant compliance burden.

Many credit unions maintain their first-mortgage origination operations separate from their HELOC operations, which are more aligned with consumer lending. In these instances, data aggregation for HMDA reporting purposes may require significant changes in training, operations and technical requirements.
 
On the plus side of the CFPB proposed changes, the bureau is considering raising the reporting threshold to 25 or more closed-end loans or reverse mortgages in a year. In addition, the proposal would eliminate reporting of certain home-improvement loans. Currently, financial institutions must submit reports on their mortgage lending activities even if they write just one home-purchase loan or refinancing in a year.

Also in its announcement, the CFPB noted that it would be providing clarifications on its HMDA rules. CUNA's Ihrig said credit unions would welcome any guidance on such things as the definition of what constitutes a "dwelling," how to treat manufactured, modular and multiple properties under HMDA, and many other topics.
 
"Any clarification the bureau can provide is helpful," Ihrig said, but added that CUNA will be analyzing the proposal to see if any of the CFPB's proposed amendments would be adding to the regulatory burden.
 
The CFPB also said it is looking to improve the electronic reporting process and will be considering what new technological tools would make the data submission process more efficient, ease the data formatting requirements and help financial institutions prevent errors.
 
Ihrig noted that CUNA will be posting a Regulatory Call to Action for state credit union leagues and credit unions in the coming days and encourages all affected credit unions to weigh in with comments on the proposed rule. Comments are due to the CFPB Oct. 22. ReadMore

Other Resources

CUs get national online tool for communicating reg concerns

CU System
WASHINGTON (7/25/14)--PowerComment, a new online resource that helps credit unions take their regulatory concerns directly to state and federal regulators, was officially announced at the summer American Association of Credit Union Leagues (AACUL) meeting Thursday.

Developed by the California and Nevada Credit Union Leagues, and now being taken national by Credit Union National Association, PowerComment is an interactive tool that allows all CUNA-affiliated credit unions to write and immediately submit comment letters on regulatory proposals directly to the National Credit Union Administration, the Consumer Financial Protection Bureau and other federal and state regulators.

Credit unions can read proposed rules and how they might affect their operations and members, as well as ask fellow PowerComment users or their leagues questions related to proposed rules. In addition, they can view letters submitted by other credit unions and their leagues on the website, available exclusively to CUNA-affiliated credit unions.

"This is the power of the CUNA-League System at its best," remarked CUNA General Counsel Eric Richard. "CUNA is pleased to leverage the great of work the California and Nevada Credit Union Leagues to effectively deliver credit union comments back to the regulatory agencies."

The national rollout of PowerComment now makes it easier for credit unions throughout the United States to voice their concerns and comment on proposed rules, especially in this challenging regulatory environment," said California and Nevada Credit Union Leagues President/CEO Diana Dykstra. "By commenting at the beginning of the process, credit unions can help shape the rules, and mitigate overly burdensome directives."

Prior to the national rollout, PowerComment was tested by 10 leagues, including the Northwest Credit Union Association (NWCUA).

"PowerComment allowed us to easily track regulatory proposals, get insight from colleagues and write effective comment letters," said NWCUA President/CEO Troy Stang.

"The analysis and reminders are another benefit that helped us successfully manage our time in an efficient manner. PowerComment is an additional tool in the credit union toolbox that we look forward to seeing available to a broader audience," he added.

Use the resource link to check out the new tool. ReadMore

Other Resources

Elimination of fixed-asset cap on NCUA board agenda for July

Washington
ALEXANDRIA, Va. (7/25/14)--The National Credit Union Administration will consider a proposed rule on federal credit union ownership of fixed assets, among other proposals, at its monthly board meeting Thursday.

Speaking at the National Association of Federal Credit Unions conference Wednesday, NCUA Chair Debbie Matz said the proposal is intended to streamline the rules that implement Federal Credit Union Act provisions governing the process for those credit unions to occupy land or buildings.

Matz said the intent is to allow federal credit unions to manage their own fixed-asset purchases without having to seek permission or waivers from the NCUA. This would allow them to update facilities, upgrade technologies and make purchases that do not impact safety and soundness.
                 
"NCUA should not micromanage individual business decisions," she said ( News Now July 24).

Board member Rick Metsger has made fixed-asset issues an area of focus since joining the NCUA board in 2013, and said Thursday at the American Association of Credit Union Leagues meeting in Chicago that he was strongly in favor of giving credit unions the ability to make their own decisions on managing fixed assets.

The board will also give the quarterly share insurance fund report, the guaranteed notes performance report, and the agency's 2014 mid-year operating budget.

Also on the agenda is a request for a community charter expansion for Call FCU, a $360 million-asset institution based in Richmond, Va.

Matz said last week that along with the fixed assets proposed rule, board meetings later this year would address two other regulatory relief proposals. One would be to support legislation to increase the member business loan cap from 12.15%, as well as look for other ways to "modernize" member business lending to make it easier for credit unions to serve small businesses. The other proposal would involve updating appraisal provisions.

The NCUA board will not meet in August. The next board meeting is scheduled for Sept. 18. ReadMore

Other Resources

Landmark exam parity bill gets Ill. gov. signature

CU System
CHICAGO (7/25/14)--The examination process for Illinois credit unions was just upgraded, as Gov. Pat Quinn signed a bill into law Thursday that will certify that the Illinois Department of Financial and Professional Regulation administers fair examination protocols for all state-chartered credit unions.

Sean Hession, Illinois Credit Union League president/CEO, left; Patrick Smith, vice president of communications and regulatory affairs; Steve Olson, executive vice president/general counsel/chief operating officer; Ashley Niebur, manager of state governmental affairs, and Keith Sias, vice president of governmental affairs, witness Ill. Gov. Pat Quinn sign HB 5342. (Illinois Credit Union League Photo)
HB 5342 will require all state regulatory examinations to be conducted in a procedurally and consistent manner, and aims to provide clarity, flexibility and authority in a number of operational areas.

The Illinois Credit Union League (ICUL) played a key role in drafting the bill, which passed both chambers of the Illinois General Assembly with wide-ranging support in May.  

The bill was sponsored by Deputy Majority Leader Rep. Lou Lang (D-Skokie) and Sen. Dave Koehler (D-Peoria), two longtime advocates for credit unions.

"There will now be standards that state-chartered credit unions can reference and rely upon with respect to the entire regulatory examination process," said Steve Olson, ICUL executive vice president/general counsel.

Added ICUL President/CEO Sean Hession: "The contents of the bill, as well as the rules and guidelines to promulgate it, are cause for celebration and will serve as a model across the country for state and federal regulators."

The key provisions of the bill include:
  • The authorization for credit unions to form charitable donation accounts, which will allow credit unions to reach for higher yields on charitable accounts as long as 51% of the returns are donated to a recognized charity;
     
  • The ability for credit unions to share daily operational services, correspondent services and fixed assets, which will allow them to achieve economies of scale and operate more efficiently;
     
  • Permission for credit unions to forego drafting a new appraisal during either a mortgage loan renewal, refinancing or restructuring when no money is advanced;
     
  • The requirement for Illinois credit union board members to have a basic understanding of a credit union's financial statements, services, products operational risks and internal control structures; and
     
  • The requirement that Illinois credit union supervisory committee members receive annual training to their statutory duties.
ReadMore

Other Resources

N.Y. young professionals shine in leadership role on Hill

CU System
ALBANY, N.Y. (7/25/14)--Seven members of the Credit Union Association of New York's (CUANY) Young Professionals Commission (YPC) demonstrated their leadership skills this week and furthered the advocacy efforts of the state's credit unions during the league's Hike the Hill event in Washington, D.C.
 
Click to view larger image From left: Mike Lanotte, Credit Union Association of New York; Cristina Morrissiey, AmeriCU CU, Roma; Meghan McGee-Pelkey, UFirst FCU, Plattsburgh; David Roy, Buffalo Metropolitan FCU; Jennifer Preston, Reliant Community FCU, Sodus; Rep. Dan Maffei (D); Kayla Barber, Dannemora FCU, Plattsburgh; Angela Hitchcock, Sidney FCU; and Brittney Wensley, Sunmark FCU, Latham (Credit Union Association of New York Photo).
For the second straight year, members of the under-35 group joined the league in visits with lawmakers on Capitol Hill. But the young professionals weren't there as observers. When possible the league arranged visits with lawmakers from the districts where the commission members' credit unions were located. Each young professional then took the lead in presenting the credit union advocacy case before his or her district's lawmaker.
 
"The YPC member would introduce the group and present the topics on our agenda," Cristina Morrissiey, financial center manager at AmeriCU CU, Rome, with $1.2 billion in assets, told News Now . "When we completed our presentation, and everyone had contributed, we asked the lawmaker or staff member for their support and thanked them. We took a very active role in this, with a lot of support from the assocation and CUNA."
 
On Monday, the group convened at the Credit Union House for a legislative briefing led by Mike Lanotte, CUANY senior vice president/general counsel, and staff from the Credit Union National Association. Following the briefing, the advocates then met with representatives from the offices of Sens. Charles Schumer (D) and Kirsten Gillibrand (D), both of New York. For several of the young professionals, it was their first time lobbying at the federal level.
 
The advocacy efforts continued Tuesday, when the group met with nine House members and staffers. Lawmakers on both sides of the political aisle encouraged the group to continue advocating on behalf of their members ( The Point July 24). Some representatives, including Rep. Dan Maffei (D), praised the YPC and acknowledged the important role that credit unions play in low-income and rural communities.
 
In total, the group was able to meet with representatives or staff from one-third of the New York congressional delegation, including: Reps. Tom Reed (R), Chris Collins (R), Chris Gibson (R), Richard Hanna (R), Bill Owens (D), Brian Higgins (D), Louise Slaughter (D), Paul Tonko (D) and Maffei.
 
Meghan McGee-Pelkey, marketing specialist, UFirst FCU, Plattsburgh, with $57 million in assets, told News Now , participating in the hikes helps her gain a more complete perspective of working within the credit union system.

"You know about your CEO and upper management going to CUNA's Governmental Affairs Conference, but you don't understand exactly what's happening there," McGee-Pelkey said. "You don't understand that behind your job, there are all of these issues that are affecting your credit union. Having the association invite us to Washington to present these issues on behalf of our credit union is an amazing experience."
 
Other YPC members participating in the hikes included:
  • Kayla Barber, Dannemora FCU, Plattsburgh, with $141 million in assets;
  • Angela Hitchcock, Sidney FCU, with $385 million in assets;
  • Jennifer Preston, Reliant Community FCU, Sodus, with $376 million in assets;
  • David Roy, Buffalo Metropolitan FCU, with $90 million in assets; and
  • Brittney Wensley, Sunmark FCU, Latham, with $404 million in assets.
McGee-Pelkey said the CUANY's YPC initiative has presented her and other members with leadership opportunities and responsibilities beyond this week's Washington visit. "There are several YPC members who are becoming more involved with their chapters and committees," she said.

"For example, we have a young professional commission member that is the president of her chapter. I myself am a CULAC/CUPAC trustee, and I sit on the council for my chapter.  So being a part of the YPC has opened so many new opportunities for me that I never expected to have in my career as a credit union professional, and that includes hiking the hill." ReadMore

Other Resources

Fraud-fighting advice for CUs: Now on NCUA YouTube channel

Washington
ALEXANDRIA, Va. (7/25/14)--In an effort to help credit unions detect and deter fraud, the National Credit Union Administration has released the first videos in a new series on fraud prevention.

The agency has posted the first three videos on its YouTube channel, with the remaining four to be released in the coming weeks.

"The potential for employee fraud should always be a concern for credit union officials and volunteers," NCUA Board Chair Debbie Matz said in announcing the new resource.

"Unfortunately, employee fraud led to $311.4 million in losses for the Share Insurance Fund between 2010 and 2013 at liquidated credit unions. To protect the Share Insurance Fund from future losses, NCUA has developed this new video series to educate credit union managers and volunteers about detecting and reducing the potential for fraud and dishonesty among employees," she added.

The series, conducted by staff from the NCUA's Office of Small Credit Union Initiatives in partnership with CUNA Mutual Group, discusses ways credit unions can increase internal controls to deter insider fraud and employee dishonesty. Credit union managers and volunteers will also learn how to identify potential clues that are warning signs for fraud.

The first three episodes of the "Deterring, Preventing and Detecting Employee Dishonesty" series provide an overview of the series and outline the importance of maintaining a policy on employee fraud and conducting surprise cash counts.

Joette Colletts, senior manager for risk management with CUNA Mutual Group, is featured in the videos taking a credit union CEO through various phases of fraud prevention and explaining why each one is essential to an overall prevention strategy.

The NCUA will release the remaining four episodes in the coming weeks, which will address separation of duties, employee and family member accounts, file maintenance transactions and vault cash.

Use the resource link below to access the videos. ReadMore

Debit use bolsters noncash payments, says Fed payments study

CU System
WASHINGTON (7/25/14)--Consumer use of electronic payments--whether by card or via automated clearing house (ACH)--continues to outpace cash and checks, according to updated statistics from the 2013 Federal Reserve Payments Study.
 
Of the 776 million plastic cards used in the United States in 2012, 334 million were credit cards, 283 million were debit cards and 159 million were prepaid cards.
 
Consumers pulled out their debit cards for an average 23 payments per month compared with an average of 11 payments per month for credit cards and 10 for prepaid cards. In 2012, the number of debit card payments reached 47 billion--significantly higher than the 26.2 billion credit card payments.
 
The number of online bill payments--through online banking websites, directly through billers and settled via ACH--exceeded 3 billion in 2012.
 
Notable is the use of mobile payments: Mobile wallet applications accounted for more than 250 million mobile payments, and there were at least 205 million person-to-person or money transfer payments.
 
Check usage continues to decline, although, when used, almost all checks in 2012 were either cleared by electronic image exchange or converted to ACH payments. More than 90% of the drop in total checks was due to reductions in checks for $500 or less.
 
The number of fraudulent transactions in 2012 was 32.2 million worth $6.4 billion. Only 5% of the 32.3 million were made via ACH, and checks had the lowest unauthorized transactions at 3%.
 
This revised report updates data from the December 2013 original report.  The 2013 Federal Reserve Payments Study is the fifth conducted since 2001 by the Federal Reserve System to estimate aggregate trends in noncash payments in the United States. Estimates are based on survey data gathered from depository and financial institutions, payment networks, processors and issuers. ReadMore

Other Resources

RSS print
News Now LiveWire
.@CUNAMutualGroup has committed $35K to @trustdotcoop over the next year to suppor the future of #creditunions.
7 minutes ago
.@madison_mag gets the cooperative scoop from @SummitDoMore's @kimsponem http://t.co/RxSCeSegie
20 minutes ago
.@VantageWestCU emeritus chairman Whittaker inducted into @DCUC_HQ Hall of Fame http://t.co/dpeP4ME49U
2 hours ago
Australian newspaper covers Gen Y tips from @ServusCU at @WOCCU conference http://t.co/xqmLfZVwaI
2 hours ago
#creditunions are a compass on the path away from bank fees, according to Daily Finance http://t.co/FcMVTrYyoc
3 hours ago