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Readiness Guide For CFPB Mortgage Rules Available Now

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WASHINGTON (7/9/13)--Credit unions and other mortgage lenders got some help recently as they work to meet all the Consumer Financial Protection Bureau's new mortgage rules. The bureau on Monday released the first edition of its 2013 Dodd-Frank Mortgage Rules Readiness Guide, developed to help institutions of all sizes evaluate their readiness for the impending mortgage rule changes.

The guide provides high level topics that institutions should consider as they implement these rule changes, the CFPB added.

Topics covered in the document include key areas that may be closely examined during a review, and compliance management elements that may warrant review, modification, or other enhancement.

The CFPB said it plans to update the readiness guide as rule clarifications and amendments are finalized and new issues are identified.

Amendments to portions of the 2013 Mortgage Rules Under the Equal Credit Opportunity Act (Regulation B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act (Regulation Z) were published in the Federal Register last week, and the Credit Union National Association has asked credit unions for their thoughts on the changes in a new comment call.

Under the proposed amendments, the CFPB would move the effective date of certain portions of the final mortgage loan originator compensation rule forward to Jan. 1, 2014 from Jan. 10, 2014. Specifically, the record retention, definitions, scope, compensation, anti-steering, qualifications, and compliance policies and procedures sections of the final rule would be subject to the new effective date.

The amendments also would make it easier for mortgage servicers to offer short-term forbearance plans for delinquent borrowers without going through a full loss mitigation evaluation process. Small creditors that do not operate predominantly in rural or underserved counties would also be permitted to make high-cost mortgages with balloon payments as long as the loans meet certain restrictions.

In the CUNA call, credit unions can comment on whether or not they agree with the accelerated effective date, and can detail why they may or may not support the proposed changes to the loss mitigation requirements, points and fees definition revisions, and other changes and clarifications.

For the full CUNA comment call and the CFPB release, use the resource links.

CFPB Issues Rules Regarding Nonbank Risks To Consumers

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WASHINGTON (7/9/13)--The Consumer Financial Protection Bureau has issued final supervisory procedures to bring non-depository institutions that pose risks to consumers under its regulatory purview. The Credit Union National Association, in this week's edition of the Regulatory Advocacy Report, strongly supports the CFPB's continued efforts to scrutinize and regulate non-depository institution practices and urged rigorous oversight.

Nonbanks covered by the CFPB final rule, issued June 26, are companies that offer or provide consumer financial products or services; nonbanks do not include credit unions, banks, or thrifts. The agency is authorized to require reports from these nonbank entities, and conduct examinations of the firms.

"Non-depository institutions engaging or that have engaged in conduct that poses risks to consumers on financial products or services should be subject to the most rigorous consumer protection supervision, regulation, and enforcement, as contemplated by the Dodd-Frank Act," CUNA said in the Report.

Rulemakings to implement a supervisory program for certain nonbank entities are one of many items listed on the CFPB's near-term agenda released last week. (See July 5 News Now story: CFPB Releases Spring 2013 Rulemaking Update.)

Other items addressed in this week's Regulatory Advocacy Report include:
  • Details on the National Credit Union Administration's decision to extend the effective date of its loan participation rule to Sep. 23, 2013, which CUNA strongly supported;
  • An update on housing reform efforts, and recent CUNA comments on the process;
  • The Federal Reserve Board's approval of a Basel III rule for banks; and
  • The CFPB's release of a final 2014 list of rural & underserved counties.
Employees or volunteers of CUNA- and state credit union league-member credit unions can sign up below to receive the Regulatory Advocacy Report.

The Regulatory Advocacy Report is archived on cuna.org.

CU Tax Status, NCUA Nomination On CUs' Minds As Congress Returns

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WASHINGTON (7/9/13)--As members of the U.S. Congress return to Washington this week, the credit union tax status and Richard Metsger's nomination to join the National Credit Union Administration board remain top priorities for the Credit Union National Association and credit unions.

CUNA President/CEO Bill Cheney and CUNA staff this week will continue their ongoing meetings with members of Congress, discussing the importance of maintaining the credit union tax status in those meetings. CUNA will be making its third, and in some cases fourth, contacts with key policymakers on the key issue of the credit union tax status, CUNA Executive Vice President of Government Affairs John Magill noted Monday.

Advocacy efforts from credit unions and their supporters also remain strong, as more than 300,000 separate congressional contacts have been made since mid-May as part of a groundbreaking CUNA/state credit union league advocacy effort. (See related story: Postcards, Newsletters, More Aiding CU Tax Status Fight.) Credit unions and their members are using CUNA and the state credit union leagues' resources, social media sites including Facebook, and micro-video site Vine, to tell their legislators, "Don't Tax My Credit Union!" This pro-credit union message is also being shared through Twitter feeds, CUNA's Twitter handle @CUNAadvocacy and the hashtag, #DontTaxMyCU.

Key policymakers have made it clear they intend to move quickly on tax reforms, with Senate Finance Committee leaders Max Baucus (D-Mont.) and Orrin Hatch (R-Utah) last month advising lawmakers all proposed language for a comprehensive tax reform bill must be submitted for the committee's consideration by July 26. They have told their colleagues to plan for a tax reform vote early this fall.

Another key credit union priority is the progress of Metsger's NCUA nomination. The NCUA board nominee appeared before the Senate Banking Committee late last month, and his nomination must be approved by banking committee and Senate votes before he can join the agency.

The committee has not announced when it will take future actions on Metsger's nomination.

The House and Senate are both scheduled to remain in session until August 2.
Items on the House Financial Services Committee's agenda for this week include:
  • A July 9 financial institutions and consumer credit subcommittee hearing on the Consumer Financial Protection Bureau's safeguarding of consumer data;
  • A July 9 oversight and investigations subcommittee hearing on the constitutionality of sections of the Dodd-Frank Act that concern "Too Big to Fail" financial institutions;
  • A July 10 House Appropriations financial services and general government subcommittee markup of the fiscal 2014 Financial Services and General Government Appropriations Bill;
  • A July 10 capital markets and government sponsored enterprises subcommittee hearing on how government red tape hinders a healthier economy; and
  • A July 11 Senate Banking Committee hearing entitled "Mitigating Systemic Risk Through Wall Street Reforms."

FASB Issues Three Private-company GAAP Proposals

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NORWALK, Conn. (7/9/13)--Three new proposals were issued for public comment by the Financial Accounting Standards Board (FASB) and all three are intended to address private-company stakeholder concerns raised about the relevance and complexity of different aspects of U.S. Generally Accepted Accounting Principles (GAAP).

FASB Chairman Russell G. Golden, in a press release last week, said the proposals should reduce "the costs and complexity for preparers in valuing and accounting for intangible assets acquired in business combinations, goodwill, and certain types of interest rate swaps."

FASB's Private Company Council (PCC) is leading its efforts on these proposals, and unlike typical rule-makings, PCC's primary objective is to recommend to FASB whether to provide exemptions from or alternatives to existing GAAP standards, most of which credit unions already follow.  Before being incorporated into U.S. GAAP, PCC recommendations will be subject to a FASB endorsement process.

Comments on the three new FASB Exposure Drafts are due by Aug. 23. They address:
  • Accounting for Identifiable Intangible Assets in a Business Combination (PCC Issue No. 13-01A), which modifies the requirement for private companies to separately recognize fewer intangible assets acquired in a business combination;
  • Accounting for Goodwill Subsequent to a Business Combination (PCC Issue No. 13-01B), which would  permit amortization of goodwill (the residual asset recognized in a business combination after recognizing all other identifiable assets acquired and liabilities assumed) and a simplified goodwill impairment model; and
  • Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps (PCC Issue No. 13-03), which would give private companies, other than financial institutions, the option to use two simpler approaches to accounting for certain types of interest rate swaps that are entered into by a private company for the purpose of economically converting its variable-rate borrowing to a fixed-rate borrowing.
Comments can be submitted using the first resource link below.

We briefly discussed these proposals (which had not yet been released) with our Accounting Subcommittee on our May call; we will be analyzing these proposals and soliciting input through our Comment Call process.
 
Also from FASB, the newest edition of the FASB Accounting Standards Codification, four-volume bound edition of the all FASB online codifications as of Oct. 31, 2012, is now available. The volumes serve to organize thousands of U.S. GAAP pronouncements and include relevant Securities and Exchange Commission guidance that follow the same topical structure in separate sections in the codification.  See the second resource link for more information.

NCUA Reminds: CU Town Hall On July 18

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ALEXANDRIA, Va. (7/9/13)--The National Credit Union Administration's free town hall webinar, scheduled for July 18, is drawing near, the NCUA reminded on Monday, but there is still time to sign up.
 
Regulatory modernization efforts, credit union industry performance and emerging credit union system risks will be among the topics discussed when agency Chairman Debbie Matz hosts the webinar.
 
The webinar is scheduled to begin at 3 p.m. (ET). Other topics include:
  • NCUA's proposed rule on derivatives;
  • Low-income credit unions;
  • Emergency liquidity and the Central Liquidity Facility; and
  • Guidance on credit ratings and risk management.
Webinar questions can be sent in advance to WebinarQuestions@ncua.gov. The subject line of the email should read, "NCUA Town Hall."

To register for the webinar, use the resource link.