CUNA Regulatory Comment Call


February 17, 2004

Agency Review to Reduce the Burden of Consumer Protection Rules
(Not a Major Rule)

EXECUTIVE SUMMARY

  • The NCUA Board has issued a request for comments to identify outdated, unnecessary, or burdensome regulatory requirements imposed on federally insured credit unions. NCUA and the other federal financial institution regulators are required by a 1996 law, the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA), to review their rules at least once every ten years.

  • EGRPRA requires the regulators to categorize the rules, publish the categories for comment, report to Congress on any significant issues raised by the comments, and eliminate unnecessary rules. The regulators are now requesting comments with regard to consumer protection rules.

  • Comments are due by May 4, 2004. Please submit your comments to CUNA by April 23, 2004.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.coop and to Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6732, if you would like a copy of the proposed rule, or you may access it on the Internet at the following address:

http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2004/pdf/04-2279.pdf

BACKGROUND

NCUA and the other federal financial institution regulators are required by EGRPRA to review their rules at least once every ten years. EGRPRA requires the regulators to categorize the rules, publish the categories for comment, report to Congress on any significant issues raised by the comments, and eliminate unnecessary rules.

BRIEF DESCRIPTION OF THE REQUEST FOR COMMENTS

The NCUA Board has issued a request for comments to identify outdated, unnecessary, or burdensome regulatory requirements imposed on federally insured credit unions. Because the credit union system differs from the banking system, NCUA will publish its notices separately but maintain comparability with the other regulators to the extent the issues are the same. The EGRPRA review supplements and complements the regulatory review that NCUA conducts under other laws and its internal policies.

NCUA will seek comments on a number of categories of rules between now and 2006. NCUA and the other regulators are now seeking comments on consumer protection rules, primarily those related to lending. Other consumer protection rules, primarily those related to deposit relationships, will be reviewed at a later time. The current request for comments includes fair housing and flood insurance rules, as well as the following rules that have been issued by the Federal Reserve Board:

  • Regulation Z, the Truth in Lending Act
  • Regulation B, the Equal Credit Opportunity Act
  • Regulation C, the Home Mortgage Disclosure Act
  • Regulation M, the Consumer Leasing Act

NCUA encourages all comments with regard to these rules. Specifically, comments are encouraged with regard to the following issues:

  • Whether statutory changes are needed.
  • Whether the rules contain requirements that are not needed to serve the purposes of the statutes they implement.
  • The extent to which the rules may adversely affect competition.
  • The cost of compliance with regard to reporting, recordkeeping, and disclosure requirements, particularly on small credit unions.
  • Whether any regulatory requirements are inconsistent or redundant.
  • Whether any of these rules are unclear.
  • How these rules uniquely affect credit unions

Comments are requested not only on the burden imposed by individual regulatory requirements, but also on the cumulative effect of these rules. NCUA also encourages comments that pertain to product lines. For example, for a specific loan situation, this could address whether a disclosure or recordkeeping requirement under one rule is inconsistent with or duplicative of requirements under another rule. Comments on such product lines may also include recommendations about rules that are not included in the current request for comments.

At the conclusion of the comment period, NCUA and the other regulators will review the comments received and will consider proposing amendments to these rules. Comments that may also require statutory changes are also encouraged. A report will be submitted to Congress that will discuss the issues raised in the comments and whether they must be addressed by legislative or regulatory changes.

QUESTIONS TO CONSIDER REGARDING THE REQUEST FOR COMMENTS (NCUA Specifically Requests Comments on the Following Issues)

  • Do any statutory requirements underlying these rules impose unnecessary, redundant, conflicting, or unduly burdensome requirements? Are there less burdensome alternatives?









  • Are these rules consistent with the purposes of the statutes that they implement? Have circumstances changed so that any of these rules are no longer necessary? Do changes in financial products and services offered to consumers suggest a need to revise certain rules or statutes? Do any of the rules impose compliance burdens not required by the statutes they implement?









  • Would a different general approach to regulating achieve statutory goals with fewer burdens? Do any of these rules, or the statutes they derive from, impose inflexible requirements unnecessarily?









  • Do any of these rules or statutes create competitive disadvantages for credit unions as compared to other sectors of the financial services industry?











  • Do any of these rules, or the statutes they derive from, impose particularly burdensome reporting, recordkeeping, or disclosure requirements? Are any of these requirements similar enough in purpose or use so that they could be consolidated? Which of these requirements could be fulfilled electronically in order to reduce burden? Are any of the reporting or recordkeeping requirements unnecessary to demonstrate compliance with the law?









  • Do any of these rules impose inconsistent or redundant regulatory requirements that are not warranted by the purposes of the rule?









    • Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
    Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
    Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
    Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com
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