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CUNA Regulatory Comment Call

April 27, 2001

EXECUTIVE SUMMARY

The National Credit Union Administration (NCUA) is seeking comments on a proposed rule that relaxes certain provisions in NCUA’s regulations concerning advertising and posting notice of nondiscrimination in real estate-related lending. Currently, NCUA regulations provide that a federal credit union (FCU) must include notice of nondiscrimination through use of one particular logotype and legend in written and visual advertisements and one particular phrase in oral advertisements.

The proposed rule would make the following changes:

• The proposal would replace the mandatory logotype and language with a general requirement that FCUs indicate that they do not discriminate on any prohibited basis -- race, color, religion, national origin, sex, handicap, or familiar status.
• With respect to oral advertisements, a credit union may satisfy the notice requirement by a spoken statement that the credit union is an “Equal Housing Lender” or an “Equal Opportunity Lender.” The current rule requires the phrase “Equal Housing Lender.”
• The current regulations also require display inside the FCU of an NCUA-developed poster giving notice of nondiscrimination compliance. The proposed rule would allow an FCU to display either the NCUA poster or similar poster prepared by the U.S. Department of Housing and Urban Development.
• The current NCUA rule prohibits advertising with words, symbols, models, or other forms of communication that suggest a discriminatory policy or exclusion in violation of the Fair Housing Act. While the current rule also notes that the Equal Credit Opportunity Act (ECOA) prohibits discrimination for certain categories of persons, the proposal explicitly states that the ECOA requirements must also be met for advertisements. ECOA prohibits discrimination in granting credit on the basis of:
• Marital status;
• Race;
• Sex;
• Color;
• Religion;
• National origin;
• Marital status;
• Age;
• Receipt of welfare benefits; or
• Exercise of any rights under the Consumer Protection Act.

Comments on the proposal are due to NCUA by June 25, 2001. Please submit your comments to CUNA by June 18, 2001. Please feel free to fax your responses to CUNA at 202-371-8240; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com or to Senior Regulatory Counsel Catherine Orr at corr@cuna.com; or mail them to Mary or Catherine in c/o CUNA's Regulatory Advocacy Department, 805 15th Street, NW, Suite 300, Washington, DC 20005. You may contact CUNA if you would like a copy of the proposed rule.

1. Would the language change in the proposal to expressly require advertising for real estate-related lending to meet ECOA requirements significantly increase the compliance burden of your credit union in terms of time or cost?
   
   Yes ______ No ______
   
   If yes, can you quantify or describe this burden?
   
   
   
   

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2. Do the proposed modifications to the nondiscrimination rule provide sufficient flexibility for real estate-related advertising?
   
   Yes ______ No ______
   
   If not, what other modifications would you like to see incorporated into the rule?
   
   

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3. Other comments?
   
   

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