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At next week’s meeting, the Board will take up two final rules CUNA has been pushing the agency to finalize: final rule re the Current Expected Credit Loss Methodology (Part 702), and final rule re Capitalization of Interest (Part 741, Appendix B).
In addition, the Board will discuss a potential rulemaking re the FCU Loan Interest Rate Ceiling. In 2019, CUNA asked the Board to explore the idea of adopting a floating interest rate cap instead of the traditional fixed interest rate.
As usual, we will provide a comprehensive summary of the meeting on this blog.
The FCC is launching a beta testing period where credit unions can sign up to use the new Reassigned Numbers Database for free. Callers and caller agents interested in participating in the beta test can go to https://www.reassigned.us/ or email email@example.com for more information.
The CFPB issued an interpretive rule that explains the basis for its authority to examine supervised financial institutions for compliance with the Military Lending Act (MLA). This CFPB position reverses the agency’s previous position in 2018 that it did not have examination authority regarding the MLA. Based on this announcement, the CFPB will resume MLA-related examination activities for the financial institutions under its authority, such as credit unions with over $10 billion in assets.
This is another example of the new CFPB leadership reversing positions and policies from the prior 4 years. CUNA will continue to monitor CFPB regulatory activity and advocate for fair and streamlined policies targeting the problem actors in the industry, not credit unions.
The Bureau held a Virtual Event on Home Appraisal Bias in response to several recent reports of egregious examples of racial bias by home appraisals. During the session, HUD reported a ten-fold increase in the receipt of complaints regarding discrimination in appraisers since 2019. The FFIEC’s Appraisal Subcommittee is responding to these reports by conducting a review of the professional standards and appraiser qualification criteria and conducting roundtables on diversity, equity and inclusion issues and solutions in the appraisal industry, which is aging and 89% white. It is also updating the Appraisal Complaint National Hotline to ensure it is a helpful resource for holding appraisers accountable. President Biden has directed HUD to establish a task-force to assess the extent, causes and affects of discrimination in appraisals and recommend solutions.
On May 28, 2021, the President delivered the remainder of his Fiscal Year 2022 budget to Congress. The Administration’s budget is an explanation of its spending and revenue priorities and does not have the force of law.
The House of Representatives will consider H.R. 1187, the ESG Disclosure Simplification Act of 2021 [Corporate Governance Improvement and Investor Protection Act]; and H.R. 256, a bill to repeal the Authorization for Use of Military Force Against Iraq Resolution of 2002.
The following bills will be considered under expedited procedures:
The Senate will resume consideration of Ketanji Brown Jackson to be a U.S. Circuit Judge for the District of Columbia Circuit.
CUNA filed comments with FinCEN and NCUA in response to an Interagency Request for Information regarding the use of a Model Risk Management Guidance (MRMG) in BSA/AML compliance. The Federal Reserve Board and OCC adopted the MRMG in 2011. The FDIC followed in 2017. To date, the NCUA has not adopted this guidance, and as such, the guidance does not explicitly apply to federally-insured credit unions. However, credit unions do use models in risk management as part of their BSA/AML compliance programs and the guidance does inform industry-wide products, services and processes. In April, the Federal Reserve Board, OCC, and FDIC issued a statement with NCUA and FinCEN clarifying that the MRMG represents guidance, not regulatory requirements. In its letters, CUNA discusses the role these models play in credit union BSA/AML compliance programs, the potential effects of changes to the MRMG on those programs, and it applauded the interagency statement as providing clarity for BSA/AML compliance expectations.
We filed a letter in support of NCUA’s interim final rule providing temporary regulatory relief (until March 31, 2022) regarding PCA, and to encourage the NCUA Board to pursue additional PCA relief. The rule follows a temporary rule adopted last year that provided the same relief but expired at the end of 2020.
In addition, we reiterated our call for the agency to provide additional PCA relief by temporarily excluding certain assets from the net worth ratio.
We also called on NCUA to engage Congress to pursue changes to the FCU Act to provide the Board with additional tools to aid credit unions that encounter difficulties in the area of PCA.
CUNA joined several organizations encouraging Congress to carefully assess the costs and benefits of imposing a new level of data collection to the tax reporting structure. President Joe Biden’s FY22 budget proposal includes language about requiring financial institutions to report information on account flows.
“This proposal will have real costs, not only for government, but also for financial institutions, small businesses, and individual taxpayers,” the letter reads. “Strengthening IRS funding and overhauling outdated technology to use existing information reporting to facilitate targeted auditing of questionable tax returns is a much more efficient and effective approach to closing the tax gap.”
Damon Smith, who previously served as CUNA Senior Director of Advocacy and Counsel, was nominated Wednesday by President Joe Biden to serve as General Counsel at the Department of Housing and Urban Development (HUD). A Senate-confirmed position, the role serves as the agency’s chief legal position.
Smith, in his role at CUNA, contributed to regulatory analysis for CUNA’s advocacy team, particularly relating to housing policy and finance issues. Smith left CUNA in January 2021 to serve as the acting General Counsel for the agency.
CUNA wrote to House Financial Services Committee leadership in strong support of the Expanding Financial Access for Underserved Communities Act. The committee discussed the draft legislation during a hearing last month.
The Expanding Financial Access for Underserved Communities Act is a market-based solution that would make three changes to the Federal Credit Union Act to enable and encourage credit unions to serve underserved and abandoned communities and promote financial inclusion to all at no cost to the taxpayer.
CUNA, along with several other trade associations, filed comment in response to a recent petition by USTelecom asking the FCC to permit a flexible range of notification methods when calls are blocked, rather than the use of SIP/ISUP Codes in the Commission’s December 2020 Order. The petition also seeks to delay the January 1, 2022 implementation date of the blocked call notification requirement.
The joint comments urge the FCC to maintain the requirement that the Voice Service Providers use the SIP/ISUP Codes because a standardized notification method is critical for credit unions to be able to receive it and recognize their calls are being blocked. If the SIP/ISUP Codes are not yet technically operational by the January 1, 2022 deadline, the comments suggest the Commission should permit an alternative method of notification in the interim, as long as that interim method is immediate, informs the caller the call is being blocked, and who is blocking it.
The CFPB recently added 23 new FAQs to its Mortgage Servicing compliance resources. These are all on the topic of servicing escrow accounts under Regulation X, and are broken down into four categories: General; Escrow Account Analysis; Deficiencies, Shortages, and Surpluses; and Public Guidance Documents. Most of these new FAQs are fairly basic restatements of the regulation, however the questions describing the Bureau’s approach to the Public Guidance Documents and their relationship to HUD’s prior guidance may be helpful.
CUNA delivered remarks during a Federal Housing Finance Agency (FHFA) Listening Session focused on Single Family Small Lender Access. During this listening session, the FHFA sought feedback on challenges small lenders face in connection with appraisals, the COVID-19 pandemic, and obstacles faced in doing business with the Enterprises. CUNA’s remarks focused on the importance of the credit union industry, affordable housing issues, appraisal difficulties, and the barriers for small lenders to sell loans to the Enterprises.
The FHFA has announced that it will extend to availability of COVID-19 forbearance, scheduled to expire on June 30, 2021, to qualifying multifamily property owners until September 30, 2021. In the announcement, the FHFA recognized that while COVID-19 cases are declining, many renters are still recovering financially and may need additional time to enter into a paying status. A homeowner who enters into forbearance must agree not to evict tenants solely for nonpayment of rent while the property is in forbearance, provide notice of that fact, and offer some additional protections during the repayment period, such as not charging late fee. The FHFA has not announced any extension of its forbearance programs or foreclosure moratorium for single-family mortgages, currently set to expire on June 30, 2021.
CUNA and other organizations requested the Federal Reserve extend the comment deadline on a proposal that could increase costs and complexity for debit card routing requirements. Comments are currently due July 12, CUNA requested a 30-day extension.
CUNA and other financial industry associations filed an amicus brief in support of a petition for a rehearing en banc of a lawsuit that deals with communications under the Fair Debt Collection Practices Act (FDCPA). CUNA and the organizations seek a re-hearing before the entire 11th Circuit Court of Appeals. A three-judge panel in the 11th Circuit Court issued an opinion in Hunstein v. Preferred Collection and Management Services, Inc. that would expand the potential actions that could violate the FDCPA.
CUNA continued its call for U.S. Agency for International Development (USAID) procurement reform in a letter sent for a Senate Appropriations subcommittee hearing. CUNA also strongly supports a funding level of $20 million for USAID’s Cooperative Development Program (CDP).
“Previous USAID Administrators and Congresses have tried to reform procurement practices and broaden access to USAID resources. Despite these efforts, USAID data shows that large contracting firms continue to increasingly dominate USAID awards,” the letter reads. “Smaller U.S. private voluntary and not-for-profit organization should have fair access to USAID procurement. Therefore, we ask you to include report language that would encourage prioritization of funding for these organization.”
CUNA wrote to the House Small Business Committee prior to a hearing entitled, An Examination of the SBA’s Covid-19 Programs. The letter wrote that Congress should hold the Small Business Administration (SBA) accountable for blocking privately insured credit unions from accessing Paycheck Protection Program (PPP) funding. Despite the passage of the PPP and Health Care Enhancement Act, which included all state and federally chartered credit unions in the definition of “credit union,” certain credit union PPP applications were not addressed in a timely manner.
CUNA wrote to a House Financial Services Subcommittee for its hearing on consumer credit reporting. CUNA reiterated that restrictions on the reporting or consideration of certain debt prevents lenders from seeing borrowers’ complete debt circumstances and clouds lenders’ ability to fairly assess borrowers’ creditworthiness.
“We strongly believe that an accurate credit reporting system benefits borrowers and lenders alike. Lenders rely on an accurate and complete record of a borrower’s credit situation to make underwriting decisions,” the letter reads. “Attempts to remove or modify certain types of debt from the credit reporting system will do long-term damage to lending and the ability of borrowers to get the loans they need to buy a home, start a small business, or achieve a higher education.”
CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee prior to the committee hearing semiannual testimony from Fed Vice Chair for Supervision Randal Quarles. The letter discussed how a proposed Federal Reserve regulation could adversely impact credit unions by increasing regulatory burden.
"CUNA is concerned that proposed Regulation II could adversely impact credit unions by unnecessarily increasing the regulatory burden associated with providing credit union members debit cards. The Board’s proposed updates to Regulation II (12 C.F.R. pt. 235) that seeks to provide “clarification” to the regulation of debit card routing requirements. In our view, the proposal represents much more than a clarification but instead would add new requirements to Regulation II that would increase the complexity and costs associated with debit cards. CUNA plans to provide fulsome comments to the Board detailing credit unions concerns; nonetheless, it is appropriate for the Committee in its oversite role to explore the proposed rule and its implications with Vice Chairman Quarles."
Today, we filed letters with NCUA on two separate interim final rules.
The House of Representatives will be in recess this week but will continue to hold committee meetings.
The Senate will resume consideration of S.1260, the Endless Frontier Act.
Today’s report on the Share Insurance Fund showed total income of $58.9 million and net loss of $67 million for the quarter ending 3/31/2021. The balance sheet indicated total liabilities and net position of $19.773 billion, an increase of $644 million from the previous quarter. The Fund’s reserve balance stands at $177.2 million as of the end of the fourth quarter, with $21.3 million being for specific reserves. There were two credit union failures in the first quarter of 2021, at a cost of $3.1 million to the Fund. The number of CAMEL Code 4/5 credit unions decreased slightly from the preceding quarter to 154; CAMEL Code 3 credit unions increased slightly to 754.
CUNA submitted a comment letter in response to the Consumer Financial Protection Bureau’s (CFPB) proposal to delay the implementation date of the Debt Collection Final Rule. The Bureau has proposed to delay by 60 days the effective dates of the Debt Collection Final Rules from November 30, 2021, to January 29, 2022. “...We strongly recommend the Bureau announce its intention to implement the debt collection rules as finalized last year,” the letter reads. “After a reasonable period postimplementation, the CFPB can then analyze the rules’ effects and, with stakeholder input, consider whether additional resources would be beneficial, or amendments needed. The debt collection rules, while imperfect, reflected considerable input from a wide variety of stakeholders.”
The House Financial Services Committee held a hearing, “Oversight of Prudential Regulators: Ensuring the Safety, Soundness, Diversity, and Accountability of Depository Institutions,” where NCUA Chairman Todd Harper testified. Prior to the hearing, CUNA shared concerns and gave input on a slate of issues including; proposed legislation granting NCUA oversight of all credit union service organizations (CUSOs) and vendors, providing temporary flexibility to NCUA to offer forbearance from prompt corrective action (PCA), and modernizations to the Federal Credit Union Act.
Under consideration was the Expanding Financial Access for Underserved Communities Act, which was negotiated together by CUNA and the California and Nevada Credit Union League. The Expanding Financial Access for Underserved Communities Act would allow all Federal Credit Unions to add underserved areas to their field of membership and exempt business loans made by credit unions in underserved areas from the credit union member business lending cap. Furthermore, the legislation expands the definition of an underserved area to include any area that is more than 10 miles from the nearest branch of a financial institution.
CUNA joined the Defense Credit Union Council (DCUC), and National Association of Federally-Insured Credit Unions (NAFCU) sending letters to the House and Senate Armed Services Committee members asking them to reject inclusion of an amendment in the National Defense Authorization Act (NDAA) that would require the Department of Defense (DoD) to treat for-profit banks the same as credit unions when it comes to leases. This leasing treatment is currently reserved for not-for-profit entities, such as credit unions.
The Bureau issued five new FAQs that address housing assistance loans and how the Building Up Independent Lives and Dreams Act (BUILD Act) impacts the TRID Rule requirements for certain housing assistance loans. Section 1026.3(h) already contains a partial exemption for certain housing assistance loans. The BUILD Act establishes another set of partial exemption criteria. The new FAQs address both of these partial exemptions and can be accessed on the Bureau’s TRID FAQ webpage.
The House of Representatives will consider H.R. 1629, the Fairness in Orphan Drug Exclusivity Act; H. Res. 275, the Condemning the horrific shootings in Atlanta, Georgia, on March 16, 2021, and reaffirming the House of Representative's commitment to combating hate, bigotry, and violence against the Asian-American and Pacific Islander community; H.R. 3233, the National Commission to Investigate the January 6 Attack on the United States Capitol Complex Act; and H.R. 3237, the Emergency Security Supplemental to Respond to January 6th Appropriations Act.
Yesterday, the NCUA Board released the agenda for the May Board meeting. Following the release of the agenda, CUNA wrote to the NCUA urging the Board to finalize pending rulemakings aimed at providing credit unions regulatory relief as soon as possible. The NCUA can provide additional regulatory relief by finalizing two outstanding rulemakings in particular: the Capitalization of Interest in Connection with Loan Workouts and Modifications proposal, and the Transition to the Current Expected Credit Loss Methodology proposal.
On May 20, the NCUA Board will hold its monthly Board meeting at 10:00 AM ET. The meeting will be open via live audio webcast only. Visit the agency’s homepage (www.ncua.gov) and access the provided webcast link.
MATTERS TO BE CONSIDERED:
CUNA shared significant concerns regarding H.R. 2547, the Comprehensive Debt Collection Improvement Act with House leadership. Of primary concern is a provision that would prohibit credit scoring models from treating certain medical debt information as a negative factor on a credit report. The House passed the bill by a vote of 215-207.
Earlier in the week, CUNA also joined other trade associations in writing about another section of the bill that would reverse a unanimous U.S. Supreme Court decision clarifying that entities enforcing a security interest without also seeking repayment or deficiency judgment generally do not qualify as debt collectors under the Fair Debt Collection Practices Act (FDCPA).
CUNA wrote to Senate leadership supporting the Congressional Review Act (CRA) of the Office of the Comptroller of the Currency’s “true lender” rulemaking. The Senate voted 52-47 in favor of the CUNA-backed repeal of the “true lender” rulemaking.
CUNA joined other organizations to write to the Senate Finance Subcommittee on Taxation and IRS Oversight prior to the hearing on lost revenue from tax noncompliance. Congress should carefully assess the costs and benefits of imposing a new level of data collection on the already over-complicated tax reporting structure. The organizations letter responds to a section in President Joe Biden’s American Families Plan that would require financial institutions to report information on account flows so “earnings from investment and business activity” are subject to reporting closer to that of wages.
CUNA filed its comments regarding the Bureau’s proposed rule Protections for Borrowers Affected by the COVID-19 Emergency. The proposal includes a moratorium on foreclosures of principal residences until January 1, 2022. CUNA strongly opposes this provision for several reasons: the Bureau lacks authority to implement the moratorium under RESPA; doing so is an unconstitutional restriction on mortgage servicers’ First Amendment rights and their right to petition the courts; and it is unnecessary as credit unions forecast of actual delinquencies will be lower than the Bureau indicates. In the proposed rule, the Bureau also proposes to allow mortgage servicers to offer certain streamlined COVID modifications based on incomplete applications. CUNA strongly supports this change as it allows credit unions to make use of streamlined application procedures offered by Fannie Mae, Freddie Mac, and FHA without collecting a full application which is unnecessary for these programs.
We filed a comment letter in support of the NCUA’s CAMELS proposal to add an “S” (Sensitivity to Market Risk) component to the existing CAMEL rating system and redefine the “L” (Liquidity Risk) component. The rule does not add any substantive requirements or impose additional costs and the amendments would also enhance consistency between the regulation of credit unions and other financial institutions. We support the proposal, as we agree that the addition of the “S” component would likely enhance transparency and make it easier to distinguish between liquidity risk and sensitivity to market risk.
We also filed a letter in response to the NCUA’s ANPR that suggests two approaches to improve the RBC rule: replace it entirely with a Risk-Based Leverage Ratio; or keep the RBC rule but give complex credit unions the option to instead comply with a Complex Credit Union Leverage Ratio, which would be modeled after the Community Bank Leverage Ratio. The first option would likely require more capital than the RBC rule. We believe the second approach makes more sense since it will give credit unions more flexibility in which option they wish to adhere to.
The House of Representatives will consider H.R. 2547, the Comprehensive Debt Collection Improvement Act and H.R. 1065, the Pregnant Workers Fairness Act.
The Senate will consider several executive branch nominations.
CUNA filed comments with the Financial Crimes Enforcement Network (FinCEN) in response to an advance notice of proposed rulemaking (ANPRM). In the ANPRM, FinCEN requested information regarding the requirements for the new beneficial ownership information database required by the Corporate Transparency Act (CTA). The CTA requires that certain legal entities report their beneficial ownership information directly to FinCEN, which will then disseminate that information to authorized users, including credit unions meeting their customer due diligence (CDD) requirements.
We wrote to the House Financial Services Subcommittee prior to the hearing on housing resilience in the face of climate change. The best way to manage climate change and natural disaster risk is to mitigate it by improving resiliency in the housing stock of the United States.
“As climate change leads to natural disasters of increased frequency and intensity, it is likely that Americans and the housing finance system will see increased damages and losses as a result,” the letter. “It is imperative that the housing finance system does not mitigate its risk of these losses in ways that will leave vulnerable Americans to fend for themselves.”
The House of Representatives will not consider any legislation before the full body. Instead, House Committees will meet to conduct business. The Senate is in recess this week.
CUNA filed a comment letter with the National Credit Union Administration (NCUA) in supporting the proposed amendments to the credit union service organization (CUSO) rule.
The CUSO rule proposed by the NCUA Board would expand CUSO lending authority which would allow CUSOs to better serve credit union members by making loans that might be impracticable for some credit unions to make now or in the future. Furthermore, the proposed changes to the adding permissible CUSO activities process represents smart rulemaking that increases the NCUA’s agility in considering and approving future permissible activities by CUSOs.
CUNA filed comments in response to the FCC’s Public Notice seeking information on experiences with call blocking. The FCC is seeking the information to prepare its second report to Congress as required by the TRACED Act. In the comment, CUNA describes credit unions’ experiences with calls being wrongfully blocked, mislabeled, and attempts to redress these issues with service providers. It discusses the difficulty of identifying these issues on outgoing calls, and the varying levels of success in fixing the problems. CUNA also urges the FCC to address the sufficiency of call blocking analytics used by service providers and to provide redress for call labeling.
CUNA's Chief Advocacy Officer wrote to all 535 Members of Congress to remind them that Congress charged credit unions with “promoting thrift … [and providing] credit for provident or productive purposes,” in 1934 and credit unions continue to fulfill this mission today.The email also included a link to the CUNA-League 2021 Advocacy Agenda, which details how credit unions improve financial well-being for all and advance the communities they serve, and how Congress can help them go even further.
CUNA and several other financial trade associations filed joint comments in response to two Petitions regarding the FCC’s December 2020 Report and Order on TCPA exemptions. The Petitions were filed by the Enterprise Communications Advocacy Coalition and a group led by ACA International. Both Petitions address multiple issues related to the Report and Order, including that the FCC needs to issue an Erratum to correct the drafting error which inadvertently raised the level of consent for certain calls. CUNA has been urging the FCC to issue the Erratum since the error was first discovered in January, and these comments continue that push.
The CFPB has finalized its proposal to delay the mandatory compliance date of the General Qualified Mortgage(QM) final rule – moving the deadline from July 1, 2021 until October 1, 2022. The delay becomes operative on June 30, 2021. In the final rule, the Bureau recognized that the practical significance of the delay is ultimately questionable due to the Preferred Stock Purchase Agreement (PSPA) issued by Treasury in January and the subsequent policies issued by Fannie Mae and Freddie Mac earlier this month. The PSPA and policies require sellers of loans to Fannie and Freddie to implement the General QM final rule by July 1, 2021 and currently makes no accommodations for delay. On April 22, CUNA wrote to Treasury highlighting this conflict and asking that Treasury resolve it by amending the PSPA to accommodate the delay. CUNA will continue to bring these concerns to Treasury so that credit unions and their members can enjoy the flexibilities offered by the Bureau’s finalized delay.
CUNA wrote to the Senate Banking Committee prior to their hearing “The Reemergence of Rent-a-Bank?” CUNA believes the committee should examine the legal framework and regulatory scope governing the oversight of traditional banks and other commercial businesses that are engaged in financial activity.“Credit unions are concerned that non-regulated companies are engaged in financial activities through partnerships with regulated financial institutions allowing them to offer products and services that are traditionally offered by credit unions and banks, but without the regulatory safeguards that these non-financial service companies would be subject to if they were a financial institution,” the letter reads. “These so called ‘rent-a-bank relationships’ allow non-bank providers to operate under the cloak of a regulated entity will avoid regulations that would normally be in place, often from the state level, for the products and services they offer.”
The House of Representatives will not consider any legislation before the full body. Instead, House Committees will meet to conduct business. The Senate will consider several executive branch nominations.
The 11th Circuit issued an opinion in Hunstein v. Preferred Collection and Management Services Inc. holding that an alleged violation of the third-party disclosure provision under 15 U.S.C. Section 1692c(b) results in an alleged concrete injury under Article III of the U.S. Constitution. The Court seems to come to this decision despite the absence of actual or tangible harm. In addition, the court concluded that the mere transmission of a consumer’s personal information to a letter vendor constituted an alleged violation of the third-party disclosure prohibition in 1692(c)b.
CUNA is concerned about the impact this decision may have on credit unions that use third-party vendors to produce collections-related communications.
CUNA sent a letter to Treasury Secretary Janet Yellen detailing a conflict between the CFPB’s recent proposed delay of the mandatory compliance date for the General QM Final Rule until October 1, 2022 and with policy changes issued by Fannie Mae and Freddie Mac this month which would require implementation of the final rule by July 1, 2021.
The Board was briefed on an interim final rule adopted last week by notation vote, at which time the rule became effective. The rule is substantially similar to a rule adopted last year that expired at the end of 2020. The rule makes the following temporary changes to its PCA regulations to help credit unions remain operational and liquid during the COVID–19 pandemic:
These temporary modifications will be in place until March 31, 2022.
The agency is accepting comments on the rule until June 18.
As detailed in a recent Removing Barriers Blog post, we have been pushing the NCUA to adopt the temporary changes included in this interim final rule. We appreciate the Board pursuing these changes aimed at PCA flexibility, which we sought in a joint CUNA/AACUL letter sent to the Board last month.
The FHFA has announced that some COVID-related lending flexibilities set to expire on April 30, 2021 have been extended through May 31, 2021. Extended flexibilities include alternative appraisals on purchase and rate-term refinance loans. The FHFA also stated that this extension will likely be the final one. Flexibilities related to employment verification, condominium project reviews, and expanded powers of attorney will be allowed to expire on April 30, 2021. The FHFA stated that these flexibilities have had low usage, which is prompting it to allow them to expire.
A letter was sent to the House Financial Services Committee prior to the start of the Committee's markup with concerns over provisions in a debt collection bill. Language in the Comprehensive Debt Collection Improvement Act (H.R. 2547) would prohibit medical debt to be included in credit reporting.
CUNA wrote to the Senate Banking Committee prior to the hearing on investing in rural communities, which also featured testimony from Bill Bynum, president/CEO of Hope CU, Jackson, MS. Allowing credit unions to expand into rural communities and other underserved areas would advance communities throughout the nation."One of the most important things that Congress could do is empower rural communities through financial inclusion. That means ensuring that federal law permits all federal credit unions to serve rural communities, banking deserts, and all underserved areas,” the letter reads. “Given the unprecedented economic disruption caused by COVID-19, it is important now more than ever that rural communities have access to a trusted, local financial partner. Credit unions are eager to be that partner, but archaic charter and field of membership restrictions prevent most from expanding more broadly to help those who are most in need."
CUNA wrote to the House Small Business Committee for its hearing on SBA pandemic response programs. The Small Business Administration should work to provide certainty for Paycheck Protection Program (PPP) loan forgiveness applications. End-of-year appropriations legislation in December contained CUNA-supported forg
The House passed the CUNA-supported Secure and Fair Enforcement (SAFE) Banking Act Monday in a bipartisan 321-101 vote. The bill would provide protections to financial institutions that serve state legal cannabis-based businesses. Prior to the vote, CUNA wrote to Speaker Pelosi and Leader McCarthy in support of the SAFE Banking Act.“This historic, bipartisan legislation will address a public safety issue facing consumers, businesses, and financial institutions around the country,” said CUNA President/CEO Jim Nussle. “We appreciate the House passing this bill and urge the Senate will move forward in similar fashion. We will continue to engage with them going forward to get this bill across the finish line.”
The CFPB issued an FDCPA interim final rule (IFR) related to the CDC’s eviction moratorium. The CDC has established the eviction moratorium to protect the public health and reduce the spread of the virus.
The interim final rule requires debt collectors to provide written notice to tenants of their rights under the CDC’s eviction moratorium and prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium.
The Federal Reserve has extended the deadline for responding to the 2021 CDFI Survey until Friday, May 14. The Federal Reserve Board of Governors, Federal Reserve Banks and the CDFI Fund intend to use the survey data to inform research and future policy making. The survey data will also provide important benchmark information on how CDFIs are faring in the COVID-19 crisis and how they are serving low-income and minority populations. To participate, access the survey here.
The House of Representatives will consider H.R. 51, the Washington, D.C. Admission Act; H.R. 1333, the NO BAN Act; and H.R. 1573, the Access to Counsel Act of 2021. The following bills will be considered under suspension of the rules:
The Senate will consider S. 937, the COVID-19 Hate Crimes Act.
The NCUA board will be briefed on an interim rule involving Prompt Corrective Action (PCA) at its April 22 meeting. CUNA and Leagues have heavily engaged NCUA on the need for PCA flexibility, and NCUA Chairman Harper indicated relief would be coming shortly.
The meeting will be conducted via live audio stream starting at 10 a.m. (ET), and the stream will be available at NCUA.gov.
The complete April 22 agenda is:
The Federal Communications Commission (FCC) issued a Public Notice seeking input on call blocking in order to produce its second staff report to Congress on the topic. Among other matters, the FCC asks about the efficacy of call blocking, the rate of false positives (blocking good calls), and experience with remedial efforts to get calls unblocked. It is looking for information covering the last year. Submissions to the FCC are due April 30. If your credit union has had experience with having its calls blocked, please reach out to Elizabeth LaBerge.
CUNA wrote to the Senate Banking Committee in support of bipartisan legislation extending the loan maturity limit for federal credit unions would help more credit unions enter the student lending sector. The Committee held a hearing to discuss the Student Debt Burden and Its Impact on Racial Justice, Borrowers, and The Economy.“Total student loan debt in the United States has reached $1.7 trillion and is now the second largest factor of household, with the average graduate saddled with over $37,000. Yet, a recent study found that hiring for entry-level college graduate positions has fallen 45%, the letter reads. “While most student loans originate with the government, more and more credit unions are finding ways to support student borrowers through private loans.
CUNA called on the House Appropriations Committee to ensure increased funding for U.S. Agency for International Development’s Cooperative Development Program (CDP) in FY2022. The CDP is a global initiative administered by the that focuses on building capacity of cooperative businesses and cooperative systems. It was funded at $18.5 million last year, and CUNA has called for it to be raised to $20 million.
On April 12, FinCEN, the NCUA, Federal Reserve Board, OCC, and FDIC, issued a Request for Information (RFI) on the extent to which the principles of the Interagency Model Risk Management Guidance (MRMG) support compliance with BSA/AML and OFAC requirements. The MRMG lays out three principles for modeling: (1) model development, implementation, and use; (2) model validation, and (3) governance, policies and control. The agencies want to understand the role of this guidance in compliance practices and whether additional guidance might increase transparency, effectiveness or efficiency.
The House of Representatives will consider H.R. 7, the Paycheck Fairness Act and H.R. 1195, the Workplace Violence Prevention for Health Care and Social Service Workers Act.
The Senate will consider the nomination of Polly Ellen Trottenberg to be Deputy Secretary of Transportation.
The CFPB issued a Notice of Proposed Rulemaking (NPRM) to delay by 60 days the effective date of two final rules issued under the Fair Debt Collection Practices Act (FDCPA).
The debt collection rules are currently scheduled to take effect on November 30, 2021. If the proposal is finalized, the effective date of both rules would change to January 29, 2022.
The first debt collection rule, issued in October 2020, focuses on the use of communications related to debt collection, and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
The second debt collection rule, issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications.
The Bureau’s proposal will be open for comment for 30 days following publication in the Federal Register.
CUNA's Chief Advocacy Officer wrote to all 535 Members of Congress highlighting why it’s more important than ever that communities retain access to a local financial partner that can meet their needs.
For the last 13 months, CUNA/League advocacy has been focused on ensuring that policy supported credit union member service during and after the COVID-19 pandemic, and we saw success in many areas including provisions related to troubled debt restructuring, expanded CLF authorities, and authorizing credit unions to lend through the Paycheck Protection Program. These efforts garnered a great deal of the headline exposure over the last year, and they have had significant impact on credit unions’ ability to improve their members financial well-being during this unprecedented crisis.
But there were several efforts which didn’t get as much attention, like the work CUNA and the Leagues have done together, largely behind the scenes, to encourage NCUA to provide flexibility for credit unions impacted by pandemic related growth.
The Bureau published a proposed rule that would make significant amendments to Regulation X in connection with the ongoing COVID-19 pandemic. First, the proposal would institute a foreclosure moratorium preventing any mortgage servicer from referring a delinquent mortgage on a borrower’s primary residence for foreclosure until after December 31, 2021. Second, the proposal would allow credit unions to offer certain streamlined modifications based on an incomplete loss mitigation application, such as the streamlined modifications currently permitted by the GSEs. Finally, the proposal makes changes to the live contact and the due diligence provisions intended to help borrowers rolling off of forbearance get information about their options. The Bureau is hoping the rule would take effect on or before August 31, 2021.
It is important to note that while the proposal has not been published in the Federal Register yet, it does have a deadline for comment; May 10, 2021. CUNA will be filing comments and if you have thoughts to share, please reach out to Elizabeth LaBerge at firstname.lastname@example.org.
FinCEN has published an Advanced Notice of Proposed Rulemaking (ANPRM) seeking feedback on the implementation of the Corporate Transparency Act (CTA). The CTA was part of the National Defense Authority Act (NDAA) signed into law on January 1, 2021. The CTA requires certain business entities to submit their beneficial owner information directly to FinCEN, which is then authorized to disclose that beneficial ownership information to financial institutions attempting to comply with their BSA/AML customer due diligence (CDD) requirements.
This week we wrote to Representatives Tom Emmer and Ed Perlmutter in support of their recently introduced legislation that would modernize the Federal Credit Union Act to allow a credit union board to expel a member for just cause, the Credit Union Governance Modernization Act. The bill updates the credit union member expulsion process while ensuring a fair procedure for reinstatement.
CUNA filed a comment letter with the Consumer Financial Protection Bureau (CFPB) in response to their proposal to delay the mandatory compliance deadline related to the General Qualified Mortgage(QM) Final Rule issued last December. The letter states “Neither credit unions nor their members will suffer from tempor
Five federal financial regulatory agencies are gathering insight on financial institutions' use of artificial intelligence (AI). The agencies seek information from the public on how financial institutions use AI in their activities, including fraud prevention, personalization of customer services, credit underwriting, and other operations.
The Supreme Court issued an Opinion in Facebook v. Duguid adopting a more narrow definition of an “automatic telephone dialing system” in the TCPA as urged by CUNA in its amicus brief. The Court stated that adopting the broad definition sought by Duguid would mean nearly all cell phones are autodialers subject to TCPA limitations. This decision is a victory for credit unions and for clarity and fairness in the application of the TCPA.
The CFPB announced its rescinding seven policy statements issued last year that provided temporary flexibilities to financial institutions during the COVID-19 pandemic. The Bureau is also rescinding its 2018 bulletin on supervisory communications and replacing it with a revised bulletin describing its use of matters requiring attention (MRAs) to effectively convey supervisory expectations.
NCUA has extended the comment period for the CUSO proposal for an additional 30 days. The revised due date will be around April 30, depending on when the notice is published in the Federal Register.
CUNA called on the U.S. Sixth Circuit Court of Appeals to affirm the U.S. District Court for the Northern District of Ohio’s dismissal of the TCPA lawsuit in light of the Supreme Court’s decision in Barr v. American Association of Political Consultants, Inc. in July 2020. Credit unions suffer unequal treatment for having made important and welcome calls to members under the Telephone Consumer Protection Act (TCPA), CUNA said in an amicus brief filed Wednesday in Lindenbaum v. Realgy, LLC. In that case the Supreme Court found that a 2015 amendment to the TCPA was unconstitutional and eliminated the addition going forward. However, credit union calls made between the 2015 amendment and the 2020 decision were still subject to unequal treatment under the TCPA during that time.
The House Financial Services Committee and Senate Banking Committees both held hearings with the Federal Reserve and Treasury for the quarterly CARES Act report to congress. Prior to both hearings, CUNA wrote to leadership of each Committee in appreciation of the steps taken by the Department of Treasury, Federal Reserve, and Congress that helped credit unions remain in a position to serve their members, including allowing credit unions as lenders in the Paycheck Protection Program (PPP), simplifying the PPP loan forgiveness process and to leverage the power of Community Development Financial Institutions (CDFI) to assist communities in need.
CFPB Acting Director Uejio posted a blog asserting that “ability to repay” standards are an important consumer safeguard for underwriting small dollar loans. The Acting Director also said a future Bureau rulemaking on small-dollar loans, if deemed appropriate, is possible.
Under the prior leadership, the CFPB finalized a rescission of the 2017 Payday Rule’s mandatory underwriting provisions. The rule has been subject to multiple legal challenges.
The CFPB submitted to Congress its annual Consumer Response Report for 2020. According to the Bureau, the report highlights the impact of the COVID-19 pandemic on the consumer financial marketplace as reflected in an increase in the total number of consumer complaints.
Representatives Barry Loudermilk (R-GA), Tom Emmer (R-MN), Anthony Gonzalez (OH) and Andy Barr (R-KY) reintroduced the CUNA-supported Financial Reporting Threshold Modernization Act. If enacted, this legislation would provide much-needed relief for financial institutions by increasing the antiquated Currency Transacti
CUNA wrote to the Senate Foreign Relations Committee prior to the nomination hearing of The Honorable Samantha Power to be Administrator of the U.S. Agency for International Development Director. While CUNA does not weigh in on presidential nominations, its letter highlights credit union priorities at USAID.
“Many [not-for-profit organizations], like credit unions, have extensive community rooted networks in countries that are prioritized by USAID,” the letter reads. “Such organizations can provide USAID with specialized skills, organized networks and a proven track record to support USAID implementation of U.S. foreign assistance. However, these U.S. private voluntary and not-for-profit organizations tend to be smaller and more specialized; as such, they face procurement obstacles in the effort to partner with USAID.”
The NCUA is encouraging credit unions to take advantage of its webinar to learn more about how they can minimize potential risks to their balance sheets during the COVID-19 pandemic. Online registration for the “Pandemic-Related Credit Risks for Credit Unions” webinar is now open. The webinar is scheduled to begin at 2 p.m. Eastern and run approximately for 60 minutes. Topics that will be covered during the webinar include:
The House of Representatives will hold a committee work week.
The Senate will consider H.R. 1799, the PPP Extension Act and the nomination of Martin Walsh to be Secretary of Labor.
CUNA, AACUL and the state credit union leagues called on the NCUA board to adopt an interim final rule to provide Prompt Corrective Action (PCA) relief. The 2020 interim final rule (IFR) on PCA expired December 31, 2020.
“We ask the NCUA to adopt an IFR essentially identical to the 2020 IFR adopted last year that provided relief to credit unions experiencing PCA issues related to an increase in share growth,” the letter reads. “The relief should remain in effect until the end of the pandemic as determined by the Centers for Disease Control (CDC) or other federal entity authorized to make such a determination.”
Representatives Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velázquez (D-NY), and Warren Davidson (R-OH) reintroduced the CUNA-backed Secure and Fair Enforcement (SAFE) Banking Act. If enacted, this legislation would provide protections for financial institutions serving cannabis-based businesses where it is legal. Specifically, the SAFE Banking Act would provide a safe harbor for financial institutions accepting deposits from, extending credit or providing payment services to an individual, or business engaged in legal marijuana-related commerce.It also provides safe harbor to credit unions and their employees who are not aware if their members or customers are involved in such businesses.
CUNA wrote to the bill's cosponsors in support for the bill shortly after it was introduced.
The Board adopted an interim final rule to update its regulations regarding the temporary changes to the CLF initially made by the CARES Act, including increasing the CLF’s borrowing authority and allowing corporate credit unions to act as agent members to borrow for their own needs.
The Consolidated Appropriations Act (CAA) extended several changes to the CLF that were first made by the CARES Act. The CAA extended the sunset date of the CLF provisions included in the CARES Act from December 31, 2020 to December 31, 2021. Today’s interim final rule updates NCUA’s CLF regulations to reflect the extended sunset date of these provisions.
Senators Scott (R-SC) and Catherine Cortez Masto (D-NV) introduced a CUNA-supported bill -- the Expanding Access to Lending Options Act. If enacted, this legislation would raise federal credit union loan maturity limits on non-mortgage loans from 15 to 20 years. The bill comes after strong engagement with the legislators from CUNA, as well as the Carolinas Credit Union League and the Nevada Credit Union League.
CUNA joined several organizations this week to issue a statement regarding the delayed availability of funds from economic impact payments to consumers. Based on the delivery system the Internal Revenue Service (IRS) chose, funds will be available starting March 17.
“The IRS recently sent an initial wave of tens of millions of economic impact payments via the Automated Clearing House (ACH) system. The actual funds will be sent to the banks and credit unions on March 17, at which time funds will be made available to customers. Until that time, the funds remain with the government,” the letter reads. “While the IRS could have chosen to send the funds via Same Day ACH or provided for an earlier effective date, it chose not to do so. It is up to the sender, in this case the IRS, to decide when it wants the money to be made available and the IRS chose March 17.”
CUNA wrote to Chairman Cardin and Ranking Member Paul prior to the Committee's hearing entitled, "The Paycheck Protection Program: Performance, Impact, and Next Steps.” The letter wrote in support of additional PPP funding and of H.R. 1471, legislation that would lift the MBL cap for the duration of the COVID-19 pandemic for one year following its declared end.
Credit unions were proud participants in the SBA's Paycheck Protection Program (PPP). In fact, some credit unions were so eager to help their members through this program that they participated even though they had no previous relationship with the SBA. However, the quick implementation and slow bureaucracy at the SBA lead to significant and well documented problems for even the most experienced SBA lenders.
CUNA wrote to Chairman Brown and Ranking Member Toomey prior to the Committee's hearing entitled, “Home = Life: The State of Housing in America.” In the letter, CUNA wrote how the housing market has been one of the few bright spots in the economy during the COVID-19 pandemic.
Spurred by the historic lows in interest rates, credit unions have continued to provide a record-breaking number of mortgage loans. These numbers include loan refinances that are reducing members’ monthly mortgage bills and purchase money mortgages as credit unions continue their mission of providing credit access to members who may not be able to receive financing from banks or other lenders. Credit unions are also continuing their role in financial education, informing members of significant mortgage relief available to those negatively impacted by the COVID-19 crisis.
The March National Credit Union Administration (NCUA) Board meeting is scheduled for Thursday - March 18th at 10:00 AM ET.
CUNA wrote to the House Appropriations Subcommittee on Financial Services and General Government prior to their hearing on oversight of the United States Postal Services (USPS). In the letter, CUNA wrote that credit unions support and are working towards the goal of expanding banking access, but there are “grave reservations” about proposals to leverage the USPS to provide banking services.
The CFPB rescinded its January 24, 2020 policy statement, “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.”
Congress defined abusive acts or practices in section 1031(d) of the Dodd-Frank Act. Under the statute, companies are prohibited from:
Five federal regulatory agencies today, including NCUA, requested public comment on 24 proposed Interagency Questions and Answers Regarding Private Flood Insurance.
The proposal is intended to help lenders comply with the agencies' joint rule promulgated in 2019 to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012.
CUNA wrote to a House Financial Services Subcommittee on Consumer Protection and Financial Institutions prior to the hearing discussing policy options to help consumers during the pandemic. We urge Congress to implement COVID-19 policies that protect both consumers and financial institutions.
CUNA wrote to House Financial Services Committee prior to the Committee's hearing entitled, "Justice for All: Achieving Racial Equity Through Fair Access to Housing and Financial Services.” In the letter, CUNA notes that women- and minority-owned businesses (MWBEs) face barriers when it comes to access to credit and financial services, a situation made worse by the pandemic.
“Credit unions are committed to financial inclusion and access. MDI and CDFI credit unions play a critical role in advancing financial inclusion and the economic well-being of their members, including MWBEs,” the letter reads. “We are pulling together as a movement to support our members and make a difference in their lives during this difficult moment, but we know that, given the opportunity, we could do more, especially when it comes to providing access to capital to America’s small businesses.”
We wrote to the the House Small Business Committee prior to their hearing entitled, “The Next Steps for the Paycheck Protection Program.” The letter wrote in support of additional PPP funding and of H.R. 1471, legislation that would lift the MBL cap for the duration of the COVID-19 pandemic for one year following its declared end.
CUNA filed a comment letter in response to the NCUA’s RFI on communications and transparency. We applaud the agency for taking the initiative to solicit feedback on how it can increase the effectiveness and efficiency of its communications to the public. It is now more important than ever to ensure credit unions have timely access to necessary information from the agency.
While, overall, the agency does a good job in communicating important information to the industry, we took the opportunity to share a number of suggestions on things that can be improved. For example, the NCUA Express email are often flagged and sent to recipients’ spam folders. Further, the agency should do more in the area of social media, including posting all video communications to the official NCUA YouTube channel.
The House of Representatives will consider H.R. 1319, the American Rescue Plan Act of 2021; H.R. 842, the Protecting the Right to Organize Act of 2021; H.R. 8, the Bipartisan Background Checks Act of 2021; and H.R. 1446, the Enhanced Background Checks Act of 2021.
The Senate will consider Marcia Louise Fudge to be Secretary of Housing and Urban Development and Merrick Brian Garland to be Attorney General.
CUNA wrote to the Senate Banking Committee prior to the nomination hearing of Rohit Chopra, President Joe Biden’s nominee to lead the Consumer Financial Protection Bureau (CFPB). Chopra is currently a commissioner with the Federal Trade Commission, previously served as assistant director and student loan ombudsman at the CFPB. While CUNA does not historically tale a position on nominees, it will be engaged with the hearing.
In the letter, CUNA wrote in support of a multi-person Commission to lead the CFPB.
The CFPB released a notice of proposed rulemaking (NPRM) to delay the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022. The proposal does not change the implementation date of the General QM rule, which began on March 1, 2021.If this NPRM is finalized as proposed, the old, DTI-based General QM definition; the new, price-based General QM definition; and the GSE Patch (unless the GSEs exit conservatorship prior to October 1, 2022) would all remain available as long as the lender received the consumer’s application prior to October 1, 2022.
Comments on the NPRM must be received on or before April 5, 2021.
CUNA sent a letter to Acting Director Uejio recommending the Bureau permit credit unions to begin making price-based QMs under the recently-finalized General QM rule without delay.
As the 2021 CUNA Governmental Affairs Conference begins this week, Representative Brad Sherman (D-CA) and Brian Fitzpatrick (R-PA) introduced legislation that would exempt all credit union member business loans made during a declared disaster from the member business lending cap for one year. CUNA and its League partners requested such an exemption in its engagement with Congress and the administration.
“Thanks to Reps. Sherman and Fitzpatrick for their bipartisan introducing this to ensure that all available business credit is deployable during and after the pandemic so small businesses can get back to business and Main Street communities can recover quickly,” said CUNA President/CEO Jim Nussle. “We look forward to engaging further with Congress to advance this bipartisan legislation.”
The House of Representatives will consider H.R. 1, the For the People Act of 2021 and H.R. 1280, the George Floyd Justice in Policing Act of 2021.
The Senate will begin consideration of H.R.1319, the American Rescue Plan Act of 2021.
CUNA submitted a comment letter to FHFA regarding its Enterprise Housing goals. FHFA is considering public comments received to inform rulemaking planned for 2021 to establish single-family and multifamily housing goals benchmark levels for 2022 and beyond and to make other changes to the Enterprise housing goals regulations, as appropriate.
CUNA strongly supports the FHFA’s efforts to ensure that the GSEs meet their public mission and responsibilities to low-income and very-low income borrowers and communities.
CUNA wrote to the FHFA regarding the Agency's request for information (RFI) on appraisal-related policies, practices, and processes. FHFA is seeking input on the current appraisal policies, practices, and processes, especially as they relate to modernizing the appraisal process and balancing mortgage lenders’ need for efficiency with the GSEs need for prudent risk management. The agency will consider the feedback received to determine the next steps for modifications and modernizations to the GSEs’ appraisal policies, practices, and processes.
CUNA supports the agency’s effort to assess and modernize the current GSEs’ appraisal policies, practices and processes. During this process, we recommend the FHFA consider the importance of permitting new valuation solutions – including virtual walk-throughs with local real estate agents or another qualified individual – that could beneficially augment traditional approaches to appraisals. Adopting modern appraisal solutions that leverage ubiquitous, improved technologies would greatly benefit rural areas that deal with unique challenges with traditional in-person appraisals. We also encourage the FHFA to revise its education and training requirements for new appraisers with an eye toward increasing the pool of individuals entering this critical vocation.
CUNA and other trade organizations followed up a meeting with the Federal Communications Commission last week asking for error correction in the agency’s December 2020 Telephone Consumer Protection Act Report and Order.
The FCC exempted from the TCPA’s prior express consent certain informational calls in earlier orders. The December 2020 order limits the number of calls that may be placed under the Informational Calls Exemption to three calls within any consecutive 30-day period.
The organizations note, however, that in making the change the FCC amended a section of federal regulations in a manner that “appears to inadvertently” impose a prior express written consent requirement on informational calls made outside of the Informational Calls Exemption.
CUNA and other trade organizations followed up a meeting with the Federal Communications Commission last week with a letter sent Tuesday asking for error correction in the agency’s December 2020 Telephone Consumer Protection Act Report and Order.
CUNA wrote to the Senate Small Business Committee prior to its hearing on the nomination of Isabella Casillas Guzman to lead the Small Business Administration (SBA). Credit unions helped facilitated more than 200,000 PPP loans that averaged $47,000. The letter discussed how credit unions helped facilitated more than 200,000 PPP loans that averaged $47,000 and that additional PPP funding will likely be needed in 2021.
"Credit unions were proud participants in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). In fact, some credit unions were so eager to help their members through this program that they participated even though they had no previous relationship with the SBA. But, the quick implementation and slow bureaucracy at the SBA lead to significant and well documented problems for even the most experienced SBA lenders."
We wrote to Chairman Brown and Ranking Member Toomey prior to the Senate Banking Committee's hearing entitled, “The Coronavirus Crisis: Next Steps for Rebuilding Main Street.” We appreciate the work of Congress in crafting this legislative package to ensure that credit unions can continue helping Americans and small business to meet the challenges in 2021 and beyond.
“We appreciate the swift response that Congress has undertaken to address the economic consequences of the pandemic. More needs to be done, and still more will need to be accomplished in the months and years ahead,” the letter reads. “As financial first responders, America’s credit unions stand willing and able to help consumers and small businesses during the crisis and into recovery.”
CUNA wrote to the House Oversight and Reform Committee prior to the Committee's hearing discussing proposals to put the U.S. Postal Service on sustainable financial footing. The letter urges Congress to explore ways to leverage the credit union system to bring about greater and more equitable financial inclusion, including field of membership updates. Credit unions have a financial infrastructure already in place, as well as a long history of serving communities.
The NCUA, along with the federal banking regulators, issued a statement encouraging institutions operating in the affected areas to meet the financial services needs of their communities. The statement provides information on expectations of credit unions and other institutions affected by the Texas winter storms.
CUNA filed a comment letter in support of the NCUA’s proposed rule regarding requirements under the Bank Secrecy Act (BSA).
Specifically, the proposal would allow the NCUA to issue exemptions from the requirements of its Suspicious Activity Reports (SARs) regulation. Under the proposed rule, the NCUA would determine whether the exemption is consistent with the purposes of the BSA and with safe and sound practices, and may consider other appropriate factors. The NCUA would also seek FinCEN’s determination on whether the exemption would be consistent with the purposes of the BSA.
In issuing this proposed rulemaking, we appreciate the NCUA’s effort to provide a degree of regulatory relief as well as encourage credit unions to pursue innovative solutions to compliance requirements. We also believe it is important to maintain parity with the SARs regulations of the other federal financial regulators, which also have similar pending SARs proposals.
The House of Representatives and the Senate are expected to consider the “American Rescue Plan,” a $1.9 trillion piece of legislation that will be considered through the reconciliation process. The House will also consider H.R. 803, the Colorado Wilderness Act of 2021 as well as H.R. 5, the Equality Act. The Senate will also begin consideration of Linda Thomas-Greenfield to be U.S. Ambassador to the United Nations.
The Board adopted a final rule that amends its share insurance regulation governing the requirements for a share account to be separately insured as a joint account by the NCUSIF. Specifically, the final rule provides an alternative method to satisfy the membership card or account signature card requirement necessary for insurance coverage. Under the final rule, even if a credit union cannot produce membership cards or account signature cards signed by the joint accountholders, the signature card requirement can be satisfied by information contained in the account records of the credit union establishing co-ownership of the share account. This final rule mirrors a 2019 change to the FDIC’s Deposit Insurance Fund regulations.
We wrote to Chairman Brown and Ranking Member Toomey prior to the Senate Banking Committee's hearing entitled, “The Coronavirus Crisis: Paving the Way to An Equitable Recovery.” Credit unions have been and continue to be America’s financial first responders during the COVID-19 pandemic and the ensuing economic fallout. CUNA, Congress, and the National Credit Union Administration (NCUA) have worked together to empower credit unions to effectively respond to the unique financial challenges of Americans in 2020. We appreciate the work of Congress in crafting this legislative package to ensure that credit unions can continue helping Americans and small business to meet the challenges in 2021 and beyond.
While we understand that the next round of COVID-19 relief legislation is being moved through Congress under the Budget Reconciliation process, which limits the inclusion of certain policies, we hope that additional attention will be given to policy changes that meet both the immediate needs of Americans, as well as long-term economic recovery.
Comments were submitted to the NCUA in response to the proposed overdraft policy is part of the agency’s proactivity in adapting rules, regulations, and policies to ensure credit unions can meet evolving needs of their members.
Specifically, the proposal would remove the prescriptive 45-day limit for a member to cure each overdraft and replace with a requirement that the written policy establish a specific time limit that is both “reasonable and applicable to all members.”
The amended overdraft policy would still require the federal credit union to “establish a specific time limit” to cure the overdraft but it may exceed 45 days.
CUNA supports the agency’s proposed rule. COVID-19 has presented America’s credit unions and their members with extraordinary challenges. Despite the disruption of the past year, credit unions have continued to deliver high-quality financial services to credit union members throughout the duration of the pandemic. In that regard, we appreciate the agency’s proactivity as it has examined and adapted its rules, regulations, and policies to ensure credit unions have the tools necessary to meet the evolving needs of their members. The Overdraft Policy proposal is a perfect example of the agency’s ingenuity and we recommend the Board act quickly to implement the proposed change so that credit unions can amend their policies, as they deem appropriate, in the interest of assisting financially distressed members.
CUNA submitted comments to the Small Business Administration (SBA) in response to the request for comment regarding the implementation of the Payroll Protection Program (PPP) Second Draw Loans. Credit unions continue to make PPP loans through the original and Second Draw programs to help small businesses survive the pandemic.
The Second Draw program allow certain eligible businesses to receive a second forgivable loan under generally the same terms and conditions available under the Paycheck Protection Program.
The National Credit Union Administration released its February Board meeting agenda for the meeting scheduled for Thursday – February 18th. This will be the first meeting with Todd Harper as NCUA chairman.
The Board will vote on a final rule on joint ownership share accounts which CUNA supports. The proposal helps maintain parity with regulations that apply to banks and would explicitly permit the use of other evidence contained in a credit union’s account records to satisfy the signature card requirement for joint ownership of share accounts.
Comments were submitted to the NCUA on a proposal that would update the chartering manual’s service facility requirements which would help credit unions deliver necessary financial services to Americans. CUNA strongly supports the proposal that would include any shared branch, ATM where the credit union is a member of the network, or electronic facility in the definition of “service facility” for a federal credit union adding an underserved area.
“The proposed rule would make common sense changes to service facility requirements and reduces regulatory burden and confusion by harmonizing requirements for multiple common bond (MCB) credit unions for group and underserved area additions,” the letter reads, also noting that the proposed changes simplify requirements while adding necessary flexibility needed for credit unions to serve underserved areas.
CUNA wrote to Chairwoman Waters and Ranking Member McHenry in advance of the House Financial Services Committee’s markup on the budget resolution (Reconciliation Pursuant to S. Con. Res. 5, the Concurrent Resolution on the Budget for Fiscal Year 2021) that allows the committee to spend $75 billion in reconciliation over a 10-year budget window.
CUNA wrote supporting the inclusion of $9.961 billion allocated to states, territories, and tribes for direct assistance with mortgage payments, property taxes, utilities, and other housing costs.
The House of Representatives will have a committee work week and thus not consider any legislation on the floor this week. The Senate will consider the nomination of Denis McDonough to be Secretary of Veterans Affairs.
CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior the House Financial Services Committee hearing Chairwoman Waters and Ranking entitled, “More than a Shot in the Arm: The Need for Additional COVID-19 Stimulus.” Throughout the COVID-19 pandemic, we have seen economic disruption across the country with revenue streams coming to a halt and the number of unemployed or financially distressed consumers significantly increased.
CUNA urges Congress to take further legislative action to ensure that credit unions remain in a position to serve their more than 120 million members.
Next week, the National Credit Union Administration will hold a webinar on February 11 giving an update on Chairman Todd Harper's priorities and the agency's supervisory activities. Additional information including registration links are in the NCUA's press release below.
CUNA wrote to the Small Business Administration reminding them that credit unions continue to be challenged by a slow approval process with the Paycheck Protection Program (PPP). The PPP was re-authorized for up to $284 billion.
The letter details several examples of errors that have occurred during application processes.
State legislatures across the country have introduced legislation excluding sales tax from interchange fee assessments. These bills include Mississippi - MS HB 1076/SB 2856, Oklahoma - OK SB 798, and Tennessee - TN HB 375. Interchange fees, sometimes labelled as ‘swipe fees’, are an essential part of the electronic payments system, ensuring its safety and functionality. This fee helps pay for the benefits merchants receive from accepting electronic payments, including credit unions’ investments to protect consumers’ data and prevent fraud.
The Consumer Financial Protection Bureau’s (CFPB) second Tech Sprint will take place March 22-26 and focus on the Home Mortgage Disclosure Act (HMDA). Tech Sprints gather regulators, technologists, financial institutions, and subject matter experts from key stakeholders for several days to work together to develop innovative solutions to clearly-identified challenges.
The NCUA has proposed to amend its investment regulation to permit FCUs to purchase mortgage servicing rights (MSRs) from other FICUs under certain conditions, such as that the underlying mortgage loans of the MSRs are loans the FCU is empowered to grant.
Today, we filed a comment letter in support the proposed rule to remove the prohibition against FCUs from purchasing MSRs as permissible investments while also maintaining safety and soundness. However, we recognize that the purchase of MSRs will not be appropriate for all FCUs given the risks and compliance considerations associated with MSRs.
The House of Representatives will consider H.R. 447, the National Apprenticeship Act of 2021. The Senate will consider the nomination of Alejandro Mayorkas to be Secretary of Homeland Security. In addition, Congress may consider a budget resolution as a means to pass economic stimulus legislation through the Congressional reconciliation process.
CUNA wrote to Senate Banking Committee leadership prior to the nomination hearing of Representative Marcia Fudge (D-Ohio) to be Secretary of the Department of Urban Development. CUNA historically does not endorse presidential nominees.
“Spurred by the historic lows in interest rates, credit unions have continued to punch above their weight by providing a record-breaking number of mortgage loans,” the letter says. “These numbers include loan refinances that are reducing members’ monthly mortgage bills and purchase money mortgages as credit unions continue their mission of providing credit access to members who may not be able to receive financing from banks or other lenders.
“Credit unions are also continuing their historic role in financial education, informing members of significant mortgage relief available to those negatively impacted by the COVID-19 crisis,” it adds.
CUNA wrote to Congressional leaders on both sides of the Capitol outlining several priorities for the new Congress. CUNA wrote a similar letter to the Biden administration prior to last week’s inauguration.“As we look at the issuing facing our country and the 117th Congress, we will work to advance policy that furthers credit unions’ mission and enables them to continue the work of improving their members’ financial well-being and advancing the communities they serve,” the letter reads. “And, we will strongly resist proposals that would impair the same.”
Acting CFPB Director Dave Uejio posted a message on the CFPB blog today. The White House announced last week that President Biden had appointed Uejio to serve as Acting CFPB Director until the confirmation of a permanent Director to lead the Bureau.
In his post, Uejio said he will be reversing the CFPB’s policy on routine MLA exams and rescinding “public statements conveying a relaxed approach to enforcement.” Uejio also said his priorities as Acting Director will be “(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis, and (2) racial equity.”
CUNA President & CEO Jim Nussle sent a letter congratulating NCUA Chairman Harper on his new position and offering thoughts on several important policy issues.
CUNA reiterated our call for the NCUA to follow the lead of the banking regulators and allow credit unions to use asset size data from 2019 for purposes of determining applicability of certain asset-based regulatory thresholds through the remainder of 2021.
In addition, we urged the agency to proceed with future and pending rulemakings aimed at aiding credit unions during the pandemic.
We filed a comment letter in support of the NCUA’s proposed rulemaking on Capitalization of Interest in Connection with Loan Workouts and Modifications. Since 2012, credit unions have expressly been prohibited from capitalizing interest.
We support the proposal to allow for the capitalization of interest, which would provide a more consumer-friendly option where none currently exists. We expect credit unions will likely utilize this tool as a way to help struggling borrowers.
The House of Representatives will meet not have any floor votes but instead will hold a committee work week.
The Senate will consider the confirmation of Janet Yellen to be Secretary of the Treasury. In addition, the Senate will receive an Article of Impeachment against Donald J. Trump from the House.
CUNA responded to the Federal Housing Administration’s (FHA) proposal on acceptance of private flood insurance for FHA-insured mortgages. The proposal would allow owners the option to purchase private flood insurance on FHA-insured mortgages for properties located in Special Flood Hazard Areas (SFHAs).FHA's current rules do not permit private flood insurance as an option to satisfy the mandatory purchase requirement under the Flood Disaster Protection Act of 1973. Currently, owners must obtain and maintain National Flood Insurance Program (NFIP) flood insurance during such a time as the mortgage is insured.“We believe that allowing a private flood insurance option for FHA-insured mortgages located in SFHAs would ensure owners have access to flood insurance during potential lapses in the NFIP, expand the availability of lower cost alternatives to the NFIP, and potentially reduce the waiting periods associated with the processing of new originations,” the letter reads.
CUNA submitted comments regarding the U.S. Department of Agriculture’s Single-Family Housing Guaranteed Loan Program. The letter was in response to a USDA proposal that would mandate use of certain underwriting and closing systems for the program.
Specifically, it proposes to eliminate inefficiencies by mandating the use of the Guaranteed Underwriting System (GUS) and Lender Loan Closing System (LLCS) for applications and loan closing files, including for conditional commitments and loan guarantees.
It also proposal also defines two types of loans that will remain subject to manual underwriting, including streamlined-assist refinance transactions and loans downgraded in the agency’s automated origination.
CUNA wrote to President-elect Biden urging the new administration to consider the impact any policy changes will have on credit unions’ ability to serve their members. CUNA’s recommendations include continued actions from NCUA and the Consumer Financial Protection Bureau (CFPB), as well as recommendations in the housing and diversity, equity, and inclusion arena.
“CUNA strongly encourages this new administration to support and implement further COVID-recovery legislation and policies in 2021 and beyond to ensure credit unions remain in a position to serve their members throughout and after the COVID-19 pandemic,” the letter reads.
How May I Direct My Call?
Getting Through to Credit Union Members in the Age of Call Blocking
We have all seen old-timey pictures of rows and rows of telephone operators sitting in front of banks of seemingly chaotic, thick wires and somehow effortlessly connecting people by simply unplugging them and plugging them back in with just the right sequence. We take it for granted that the primary job of telephone companies is ensuring callers get through to the person being called. Not anymore. More and more, telephone companies are being tasked with policing their networks to stop “unwanted” or illegal robocalls. Although this is a laudable goal, the methods being used are imperfect and many legitimate calls from legitimate operations, including credit unions, are either getting blocked or are mistakenly being labeled as “spam,” or “scam” calls.
It is important to note, at the outset, that CUNA fully supports efforts to stop illegal robocalls. At the same time, we have worked tirelessly with regulators to minimize the possibility that legitimate calls get blocked or, if they do get blocked, to ensure that callers have redress mechanisms to get the calls unblocked as quickly as possible. Although CUNA and its trade association allies have made progress on this front, the possibility that legitimate calls will continue to be blocked or mislabeled cannot be ignored.
This blog post is designed to help you understand this new regulatory framework, and to encourage you to take 5 simple steps to maximize the chances that your calls go through so your members continue to receive the exceptional customer service they have come to expect from their credit union.
The Bureau has issued a small entity compliance guide summarizing the October 2020 Debt Collection Rule. The guide is available here.
The small entity compliance guide includes a detailed summary of the Rule’s substantive prohibitions and requirements, including those that generally restate the Fair Debt Collection Practices Act’s (FDCPA) prohibitions and requirements. Section 2 of the guide provides a summary that highlights the Rule’s key interpretations and clarifications of the FDCPA.
The Rule is effective November 30, 2021.
The Board was briefed on the ACCESS (Advancing Communities through Credit, Education, Stability & Support) Initiative, which was first announced by Chairman Hood last October. ACCESS is intended to bring together agency leaders to develop policies and programs that support financial inclusion within the NCUA and more broadly, throughout the credit union system. ACCESS will expand existing efforts to address the financial services and financial literacy needs of underserved and diverse communities, as well as expand opportunities for employment.
The CFPB issued guidance (the Statement) for financial institutions that serve limited English proficiency (LEP) consumers and members. The statement includes guidance on how financial institutions can serve LEP consumers in non-English languages, in a manner that is beneficial to consumers and that is in compliance with relevant statutes and regulations.
Specifically, the statement covers principles to inform and guide financial institutions in their decision-making related to serving LEP consumers, and key considerations institutions can use to develop compliance solutions for providing products and services in non-English languages to LEP consumers.
Submissions for the 2020 Credit Union Diversity Self-Assessment (CUDSA) are due by Friday, January 15.
Small Business Administration (SBA) and Treasury Department will present an overview of the new Paycheck Protection Program (PPP) features associated with the recently passed Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. This webinar will take place on Monday, Jan. 11, at 2 p.m. (ET) and registration is now open.
From CUNA's Compliance Blog
NCUA recently issued two letters to federal credit unions, #21-FCU-01 and #21-FCU-02. NCUA Letter to Federal Credit Unions #21-FCU-01 pertains to community charter conversions and expansions and replaces previously issued guidance from 2011. In addition, it provides links to templates to be used when applying for a community charter conversion or expansion (business and marketing plans and the pro forma financial statements).
The National Credit Union Administration released it's January Board meeting agenda. The meeting is scheduled for Thursday, January 14th at 10:00 AM ET. The NCUA board will propose a risk-based net worth rule to raise the asset threshold for defining a credit union as complex, among other items. The board will also hear a briefing on the Consolidated Appropriations Act of 2021, a summary of which the agency recently released.
CUNA's Chief Advocacy Officer wrote to all members of the 117th Congress. The email continued to remind Congress that America’s credit unions are committed to advancing the communities they serve and improving members’ financial well-being.
NCUA has issued a request for information on the agency’s communication methods to promote efficiency and increase transparency.
Specifically, the request for information seeks public input on how the agency can maximize efficiency and minimize burdens associated with obtaining information on federal laws, regulations, policies, guidance, and other materials relevant to federally insured credit unions. It contains questions about the effectiveness of press releases, social media content, and the timing and frequency of agency communications. There are also questions related to improving the agency’s websites, online data resources, and the delivery and format of supervisory guidance.
In a letter sent to the CFPB in response to a proposal to codify a joint interagency statement on the role of guidance, CUNA wrote that it is critical for federal regulators, including the Consumer Financial Protection Bureau (CFPB), to appreciate the significant differences in the appropriate role of regulations and of guidance. The letter follows a similar communication sent to NCUA last month.
“We appreciate the role of supervisory guidance and support the proposal to codify the 2018 Statement,” the letter reads. “Doing so not only ensures credit unions understand where an examiner is basing its decisions, but also ensures the basis for such decisions is well-founded, given statutes must go through the legislative process and regulations through the rulemaking process under the Administrative Procedure Act.”
CUNA submitted comments to the Financial Crimes Enforcement Network’s (FinCEN) regarding their Notice of Proposed Rulemaking on information collection and reporting requirements for certain transactions involving Convertible Virtual Currency (CVC) or Legal Tender Digital Assets (LTDA).
Specifically, this proposed rule would require compliance with recordkeeping and reporting requirements for certain suspect deposits, withdrawals, exchanges, or other payments or transfers of CVC or LTDA by, through, or to a bank or money service business that involve an “unhosted” wallet (a cybercurrency wallet that is not hosted by a third-party financial system) or an “otherwise covered wallet,” (a hosted wallet located in a jurisdiction designated by FinCEN as having anti-money laundering compliance problems, such as North Korea and Iran). By in large, the recordkeeping requirements for these CVC and LTDA transactions are similar to existing rules for wire transfers over $3,000. Similarly, the reporting requirements are similar to the Currency Transaction Report (CTR) rules in place for currency withdrawls over $10,000.
The FCC completed its The Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act)-mandated review of certain regulations and regulatory exemptions adopted to implement the Telephone Consumer Protection Act’s (TCPA) prohibitions and limitations on robocalls. The Commission’s order reflects a number of victories for positions CUNA advocated for, both on its own and in coalition with other trade associations, including:
We filed a comment letter in support of proposed changes to the NCUA’s Derivatives rule intended to modernize and make it more principles-based. We agree with the agency that the proposal retains key safety and soundness components, while providing more flexibility for FCUs to manage their interest rate risk through the use of Derivatives. Specifically, the proposal would eliminate some of the existing prescriptive requirements in the Derivatives rule, including removal of the application process for FCUs with at least $500 million in assets that have a CAMEL rating of 1 or 2.
CUNA submitted comments to the Consumer Financial Protection Bureau (CFPB) re: the small business lending data collection under Section 1071 of the Dodd-Frank Act. The CFPB released an outline of potential proposal for small business lending data collection in September.
CUNA expressed support the goals of section 1071 and noted that credit unions seek to provide all members with fair and equitable financial opportunities.
The CFPB issued final rule to implement Fair Debt Collection Practices Act (FDCPA) requirements regarding certain disclosures for consumers. The Bureau also issued an executive summary of and a table of contents for the final rule.
In general, the final rule requires debt collectors to provide detailed disclosures about the consumer’s debt and rights at the outset of collection communications and take specific steps – outlined in the rulemaking – to disclose the existence of a debt to consumers, orally, in writing, or electronically, before reporting information about the debt to a consumer reporting agency (CRA). The rule also prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt.
As with the October 2020 Debt Collection Final Rule, the requirements of this latest rulemaking only apply to “debt collectors” as that term is defined in the FDCPA.
This rule is effective on November 30, 2021.
Final Rule – Annual Operating Fee Assessment (Part 701)
The Board adopted a final rule to amend its regulation governing assessment of the annual operating fee to FCUs, including by:
CUNA filed a comment letter in support of these changes.
The final rule will become effective 30 days after publication in the Federal Register.
CUNA expressed concerns about the recent SolarWinds cyberattack in a letter to NCUA Thursday. The data breach that appears to be a most significant cyberattack in recent history, according to cybersecurity experts. Hackers corrupted a software update for Orion, an IT monitoring platform, to infiltrate nearly every sector of the economy, including credit unions and other financial institutions.
“As the NCUA seeks to determine the attack’s impact on the agency and as credit unions do the same, CUNA members have two concerns,” wrote CUNA President/CEO Jim Nussle. “First, we urge the agency to be forthright in its communications with credit unions if it is determined that the agency is impacted. Second, we call on NCUA to suspend the collection of data from credit unions until it can ascertain that its systems have not been and are not compromised.”
The NCUA held day 1 of their December Board meeting.
The U.S. Dept. of Labor announced a new exemption for investment advice fiduciaries and launched a resource page on the exemption. The exemption allows investment advice fiduciaries to offer a wide array of investment advice services in compliance with specified Impartial Conduct Standards.
The new prohibited transaction class exemption is for investment advice fiduciaries and is based on an existing temporary policy adopted after the 5th Circuit Court of Appeals vacated the Department’s 2016 fiduciary rule package. Since the 5th Circuit’s 2018 ruling, the Securities and Exchange Commission (SEC) has issued a package of advice standards. The standards in the Department’s exemption announced today align with standards of other regulators, including the SEC.
The CFPB released a panel report today as part of its rulemaking process under Dodd-Frank Act Section 1071 governing the collection and reporting of small business lending data.
In October 2020, a panel was convened pursuant to the Small Business Regulatory Enforcement Fairness Act (SBREFA) and was comprised of representatives of the CFPB, the Small Business Administration, and the Office of Management and Budget. The panel consulted with small entity representatives (SERs) likely to be affected directly by a Section 1071 regulation, including five credit unions.
The Bureau has published its Fall 2020 Rulemaking Agenda as part of the Unified Agenda of Federal Regulatory and Deregulatory Actions, which is coordinated by the Office of Management and Budget. The agenda includes the regulatory matters that the Bureau expects to focus on between now and November 2021. However, the timelines projected are merely estimates and are not binding on future CFPB leadership.
Kyle Hauptman became the 24th Board Member of NCUA following a swearing-in ceremony held Monday at the agency’s Alexandria, Va. headquarters. NCUA Chairman Rodney Hood delivered the oath of office to Hauptman.“I am proud to have been nominated by President Trump and confirmed by the U.S. Senate,” said Hauptman following his swearing-in. “It is an honor to serve on the Board of the National Credit Union Administration.”Hauptman stated that he has three priorities as a Board member:
CUNA filed a comment letter in support of an interagency proposal to codify a 2018 Statement on the role of supervisory guidance. By codifying the Statement, the proposed rule is intended to confirm that the federal financial regulatory agencies will continue to follow and respect the limits of administrative law in carrying out their supervisory responsibilities. The 2018 Statement reiterated well-established law by stating that, unlike a law or regulation, supervisory guidance does not have the force and effect of law.
Treasury’s Financial Crimes Enforcement Network (FinCEN) released the latest in a series of Paperwork Reduction Act notices requesting comment on a proposed renewal, without change, of a currently approved information collection authorized for existing Bank Secrecy Act (BSA) regulations. Comments on this notice are due by February 9, 2021.
While CUNA continues to advocate for regulatory flexibility for credit unions covered by the Bank Secrecy Act (BSA), we also help credit unions stay informed about FinCEN’s sub-regulatory guidance on BSA issues. Last week, FinCEN released an update to their 314(b) fact sheet containing helpful information about the ability of financial institutions to share information with one another to better identify and report activities that may involve money laundering or terrorist activities while complying with the requirements for a BSA safe harbor that offers liability protections.
For more information about this fact sheet and other BSA-related compliance issues, please visit the CUNA Compliance blog.
The CFPB finalized its General Qualified Mortgage (QM) definition, and the new Seasoned QM regulations under the Truth in Lending Act (Regulation Z). The changes made in these final rules were generally responsive to CUNA’s requests and credit unions will need to review these changes and make their processes and systems to meet the new QM requirements.
The Senate and the House of Representatives are expected to consider appropriations legislation as well as possible COVID-19 relief legislation.
CUNA submitted its comments on NCUA’s proposed 2021 budget, following CUNA Chief Economist Mike Schenk’s presentation before NCUA at last week’s briefing.
NCUA’s proposed budget reflects a 0.1% decline from the previous year, and CUNA commends the agency due to proposed activities and expenditures generally aligning with previously announced and vetted strategic. CUNA also believes it also appropriately responds to changing supervisory priorities in light of the COVID-19 Crisis.
“We believe there is immense capacity for NCUA to reduce its footprint, right-size the organization and come out of the resulting transition as a nimble, stronger, more efficient and more effective regulator,” the letter adds.
The Senate passed the fiscal year 2021 National Defense Authorization Act (NDAA), following House passage of the bill earlier this week. The bill passed by a 84-13 margin, which is enough to override a threatened veto from President Donald Trump, as the House also passed by more than a two-thirds majority.The bill contains CUNA-supported language to eliminate redundancies, unnecessary burdens and create opportunities for efficiencies within the Bank Secrecy Act/Anti-Money Laundering statutory framework. It also includes a study to review the current thresholds for Currency Transaction and Suspicious Activity reporting.The final bill does not contain a provision related to leases on military bases CUNA, Leagues and the Defense Credit Union Council fought to exclude what would have expanded an exemption for certain cost waivers for financial institution branches on military installations.
NCUA will vote on several proposed and final rules, as well as the proposed 2021 budget, over two days of meetings December 17 and 18. According to NCUA, the meeting will be over two days “to ensure a transparent and open discussion of several policy issues affecting federally insured credit unions.
Both open meetings will be streamed live via audio webcast on NCUA.gov and are scheduled to begin at 10 a.m. (ET).
CUNA wrote to Chairman Rubio and Ranking Member Cardin of the Senate Small Business Committee with credit unions concerns with the Paycheck Protection Program (PPP) that could be alleviated by Congressional action. Credit unions helped facilitate more than 170,000 PPP loans averaging $49,000 per loan.
The National Credit Union Administration (NCUA) released the schedule for monthly meetings in 2021. Read the full press release below.
CUNA and other organizations wrote to the Office of the Comptroller of the Currency (OCC) urging the OCC to postpone consideration of a national bank charter application for an uninsured depository institution. The Nevada-based Figure Bank submitted an application to the OCC at the beginning of November.
“Given the significant policy, legal, systemic, and other implications that chartering an organization like Applicant, with its unique business model and structure, would have for the banking system, the Associations urge the OCC to postpone its consideration of Figure Bank’s application until after it has solicited and evaluated public comments, and consulted with Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Department of Justice."
The Senate will convene at 3:00 pm on Monday, December 7 and resume consideration of Stephen Sidney Schwartz to be a Judge of the United States Court of Federal Claims for a term of fifteen years.
The House of Representatives will consider the conference report to H.R. 6395, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021.
Both chambers of Congress are expected to consider legislation to fund government operations beyond Friday, December 11th, the current deadline. It is likely that the Congress will pass a short-tern continuing resolution to give budget negotiators more time to reach a compromise FY 2021 omnibus spending bill. Congressional leadership is also negotiating the terms of a possible COVID-19 relief package that may be added to an omnibus spending deal.
As Congress considers end of year legislation, including a potential COVID recovery package, we wrote to Republican members of the Senate Banking Committee and leadership of the House Financial Services Committee to ask that the following CARES Act provisions be extended through the end of 2021:
Section 4013 - Troubled Debt Restructuring (TDR). This provision makes it easier for consumers impacted by the pandemic to obtain loan modifications by giving credit unions flexibility not to consider these modifications as troubled debt for supervisory purposes. If this provision expires, it will be harder for credit unions and banks to help consumers impacted by the pandemic. Section 4016 - Central Liquidity Facility (CLF). This provision provided for a temporary expansion of the National Credit Union Administration's (NCUA) Central Liquidity Facility (CLF), allowing corporate credit unions to act as agents for natural person credit unions and expanding the CLF's borrowing authority from 12 times the paid in capital to 16 times. These changes make the CLF more accessible to credit unions ensuring that credit unions have adequate supply of emergency capital.
House and Senate legislators unveiled the compromise FY21 National Defense Authorization Act (NDAA) without a language provision that would allow certain banks to obtain cost waivers to operate on military installations. CUNA, the Leagues, and the Defense Credit Union Council fought to exclude this provision, which was included in the Senate-passed NDAA, from the final bill.
The Senate confirmed Kyle Hauptman for a seat on the NCUA board. Hauptman will serve a term through August 2025 once sworn in. “CUNA, Leagues, and credit unions congratulate Kyle Hauptman for his confirmation as an NCUA board member. With his record of engagement with Leagues and credit unions, we look forward to working with him on ways NCUA can help credit unions more efficiently serve members through the duration of the pandemic and through the economic recovery. We hope he will continue NCUA’s trend in recent years as an efficient, effective regulator.” - Jim Nussle, CUNA's President & CEO
This week the Senate Banking Committee and House Financial Services Committee held their quarterly hearings on the CARES Act. CUNA wrote to leaders of both Committees prior to the hearings with Treasury and Federal Reserve Leaders on implementation of the CARES Act.
In the letters, CUNA reminded the Committees of the role credit unions have played in carrying the spirit of the CARES Act to their members by participating in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), modifying troubled loans and ensuring that members get the assistance they need to weather this crisis. Our comments on the implementation of the CARES Act include views on how SBA and Treasury have implemented the PPP, but also called on Congress to extend essential CARES Act provisions that expire at the end of the month, including the Troubled Debt Restructuring (TDR) and Central Liquidity Facility (CLF) provisions.
CUNA Chief Economist Mike Schenk presented before the NCUA Board regarding the agency’s 2021-2022 draft budget.
We appreciate the NCUA’s effort in publishing a detailed draft budget that rationalizes agency expenditures. We, once again, find the NCUA’s Budget Justification document to be clear, comprehensive, and well-developed. The proposed activities and expenditures described generally align with previously announced and vetted strategic initiatives. It also appropriately responds to changing supervisory priorities, especially in light of the COVID-19 crisis.
The CFPB issues a final Advisory Opinions (AO) Policy to address regulatory uncertainty and provide guidance to covered entities.
Under the final Policy, any person or entity can submit a request for an AO via email to email@example.com. The Bureau will review the submissions received, prioritize certain requests for response, and issue opinions with a description of the incoming request. The Bureau may also decide to issue advisory opinions on its own initiative.
To increase transparency, the Bureau will publish all AOs in the Federal Register and on its website here.
As part of a joint trades group representing important financial services, health care and other industries, CUNA conducted outreach to Federal Communications Commission (“FCC” or “Commission”) staff regarding the Commission’s proposed Telephone Consumer Protection Act of 1991 (“TCPA”) robocalling regulations and requests for comments regarding current TCPA exemptions. The FCC’s recent TCPA notices were required by the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act of 2019 (TRACED Act).
The joint trades emphasized that the FCC’s record clearly demonstrates the need for telephone providers to prevent erroneous call blocking and labeling of legitimate calls and to require quick and effective resolution of such errors. Examples of credit unions facing these problems were discussed, and the group reiterated the need for a 24-hour time-frame for resolution of such problems.
Register Now for Webinar on NCUA’s Response to COVID-19
ALEXANDRIA, Va. (Nov. 16, 2020) – Federally insured credit unions can learn more about the National Credit Union Administration’s response to the COVID-19 pandemic by participating in a webinar hosted by the agency on Thursday, December 3, beginning at 1 p.m. Eastern.
During the webinar, NCUA staff will also discuss recently issued guidance and regulations, as well as other agency initiatives.
The Senate will resume consideration of Taylor B. McNeel, of Mississippi, to be United States District Judge for the Southern District of Mississippi.
The House of Representatives will consider H.R. 3884, the MORE Act of 2019.
CUNA submitted comments to the Federal Reserve Board and the Financial Crimes Enforcement Network (FinCEN) in response to their joint notice of proposed rulemaking (JNPRM) lowering the threshold for collection, retention and transmittal of information for international funds transfers, and clarifying the treatment of convertible virtual currencies and other assets with legal tender status. Most significantly, the proposal would lower this critical threshold from transactions valued at $3,000 and above to $250 and above.
The NCUA and other Federal financial regulators issued a joint fact sheet regarding compliance efforts required to meet Bank Secrecy Act (BSA) due diligence requirements for customers that are charities and other nonprofit organizations.
In the joint statement, the agencies stated that the due diligence efforts should be based on the money laundering risks posed by the customer relationship. The clarification was issued to recognize that legitimate charities and nonprofits deserve and benefit from access to financial services, and “do not present a uniform or unacceptably high risk of being used or exploited for money laundering, terrorist financing, or sanctions violations . . ..” Accordingly, the due diligence expected of credit unions and other banks should be based on the risk profile of individual charitable customers, and the fact sheet gives examples of useful customer data that credit unions may want to collect to help determine those risks.
The fact sheet was developed and disseminated by the National Credit Union Administration, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, and the Office of the Comptroller of the Currency.
NCUA Chairman Hood sent a letter to federal credit unions outlining relief measures around meeting flexibility due to the COVID-19 pandemic. CUNA has been advocating for these changes during meetings with the NCUA over the past few months.
The Board issued a proposed rule to allow the capitalization of interest in connection with loan workouts and modifications. The proposal would remove the current prohibition on capitalizing interest, which according to the agency “may be overly burdensome and, in some cases, hamper a federally insured credit union’s good-faith efforts to engage in loan workouts with borrowers facing difficulty because of the economic disruption that the COVID-19 event has caused.”
Earlier this week, CUNA wrote to Chairman Shelby and Ranking Member Leahy regarding the Committee’s release of twelve fiscal year 2021 appropriations bills.
Credit unions have interest in several programs and report language included in these bills and as we continue to endure the
COVID-19 pandemic and ensuing e
CUNA joined 80 other trade associations in writing to Congressional, Treasury and Small Business Administration leadership with concerns over a new Paycheck Protection Program (PPP) review process established by the Treasury and SBA that includes “Loan Necessity Questionnaires.”“Unfortunately, the questionnaires introduce a confusing and burdensome process for both borrowers and lenders, and we fear that it could lead the agencies to inappropriately question thousands of qualified PPP loans made to struggling small businesses,” the letter reads. “On behalf of the millions of American workers supported by PPP loans, we urge you to act quickly to work directly with SBA and Treasury to avoid this unintended consequence.”
CUNA has submitted comments to the Financial Crimes Enforcement Network (FinCEN) in response to its advance notice of proposed rulemaking (ANPRM) on anti-money laundering (AML) program effectiveness.
The ANPRM provided a broad definition of an “effective and reasonably designed” AML program as one that:
Reminder that NCUA will be conducting two webinars this week.
PALs and Short-Term Lending Webinar
TODAY: Monday, Nov. 16 at 3:00 p.m. – 4:00 p.m. EST
Fair Lending and Consumer Compliance Regulatory Update Webinar
Tomorrow: Tuesday, Nov. 17 at 3:00 p.m. – 4:00 p.m. EST
The Senate will convene at 3:00 pm on Monday and resume consideration of Kristi Haskins Johnson to be a United States District Judge for the Southern District of Mississippi. The House of Representatives will consider H.R. 8294, the National Apprenticeship Act of 2020.
NCUA’s proposed 2021–2022 budget is now available for review and comment. The proposed budget summary and detailed budget justification are available on the Budget and Supplementary Materials page of NCUA.gov. Comments must be emailed to NCUA at BudgetComments@ncua.gov by Dec. 11.The agency will hold a public budget briefing on Wednesday, Dec. 2 beginning at 10 a.m. (ET).
The CFPB announced that next Combined Advisory Committee Meeting is scheduled to occur on the afternoon of November 18.
The focus of the meetings will be broad policy matters related to the Bureau’s Unified Regulatory Agenda and general scope of authority, including:
Those interested in streaming the meeting via WebEx can RSVP here.
CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior to the House Financial Services Committee hearing with financial regulators. In the letter, CUNA wrote that the NCUA and Congress should take further steps to ensure credit unions remain in position to serve members during and after the pandemic. NCUA Chairman Rodney Hood testified at the hearing, which also featured discussion of two CUNA-backed bills.
The National Credit Union Administration (NCUA) released the agenda for the November Board meeting scheduled for 10:00 AM ET on November 19th.
CUNA wrote to Chairman Crapo and Ranking Member Brown prior to the Senate Banking Committee's hearing with financial regulators. In the letter, CUNA wrote that credit unions remain in a position to help consumers, but looming stress suggests Congress and regulators need to act quickly to avoid a deeper economic crisis. CUNA’s letter notes two surveys that indicate significant economic assistance to consumers and small businesses is critically important.“As Congress contemplates further COVID-recovery legislation and exercises its oversight responsibilities over the Federal financial regulators, it is critical that policy be examined and modified to ensure credit unions remain in a position to serve their members throughout and after this crisis,” the letter reads.
The FHFA announced the validation and approval of the Classic FICO credit score model for use the Enterprises. The validation and approval of Classic FICO by the Enterprises allows them to continue supporting the mortgage market while assessing more modern credit score models.
CUNA weighed in on the FHFA’s 2018 request for comment regarding use of several credit score models by the Enterprises. In our letter, we stressed the importance that the FHFA work to find the right balance between safety and soundness on the one hand, and credit availability for American consumers on the other. Having a housing finance market that provides liquidity throughout the country requires strong participation by a wide range of lenders, including small lenders and lenders serving rural areas. Qualified financial institutions and creditworthy eligible borrowers should have fair and equitable access to the financial services offered by the Enterprises.
The Senate will convene at 3:00 pm on Monday and resume consideration of James Ray Knepp II to be a United States District Judge for the Northern District of Ohio. The House of Representatives will be in pro forma session this week.
CUNA submitted comments to the Treasury in response to the recently proposed potential revisions to the application as part of its ongoing review of policies and procedures. In the letter, CUNA wrote that the proposed Community Development Financial Institution (CDFI) Certification Application is flawed and should be reconsidered.“While CUNA supports the CDFI Fund’s ongoing efforts to evaluate and consider the efficiency and relevance of its certification and monitoring process, we strongly believe the proposed revisions to the certification application fail to achieve these goals nor would they further the purposes of the CDFI Program,” the letter reads. “In fact, the proposed application changes could ultimately serve as unnecessary barriers for qualified credit unions to access the CDFI designation.”
CUNA has filed reply comments with the Federal Communications Commission (FCC) for its regulatory review of certain exemptions to the Telephone Consumer Protection Act (TCPA). The review was mandated by the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act).
In its letter, CUNA argues that “the initial comments demonstrate overwhelming support for retaining the current exemptions, particularly the exemption for commercial informational calls to residential lines, without imposing additional restrictions.” The letter also points out the importance of such critical informational calls to credit union members, and highlights submitted comments against arbitrary caps or “opt out” requirements. In addition, CUNA echoed trade group requests for modest modifications to the financial services exigency exemption to make it more effective, and reiterated its longstanding request for the FCC to extend existing residential informational call exemptions to wireless phones.
The NCUA will host a webinar on November 17th where staff from the NCUA’s Office of Consumer Financial Protection will discuss the focus areas for the agency’s consumer compliance exams in 2021, including a review of COVID-19-related loan modifications and credit reporting, and fair lending policies and procedures. The discussion will also include the findings from the 2020 consumer compliance exam reviews.
The CFPB released its final rule on debt collection. The rule prescribes certain disclosures and conduct limitations for covered debt collectors, as that term is defined under the Fair Debt Collection Practices Act (FCDPA). The FDCPA and the Bureau’s final rule will regulate the activities of third-party debt collectors and not entities collecting their own debts, commonly referred to as “first-party debt collectors.”“Credit unions treat members with respect during the debt collection process, and given current environment, need to be free of regulatory hurdles,” said CUNA President/CEO Jim Nussle. “While this rule is designed to implement the FDCPA, we remain concerned about the potential impacts the rule could have on the credit ecosystem. Because they are the owners of the credit union, credit union members have an interest in debt collection practices that are effective, fair and efficient. We will continue to evaluate the rule to determine its full impact on credit unions and their partners."
CUNA filed a comment letter in response to the agency’s RFC on the operating fee and overhead transfer rate methodologies. We emphasized our position that “It is not our intent, nor should it be that of the NCUA, to benefit a federal credit union (FCU) over a federally insured state-chartered credit union (FISCU) or a FISCU over a FCU. . . . Our goal is to ensure a fair distribution of the charges for the supervision of credit unions—consistent with the FCU Act—for all credit unions regardless of charter type.”
We provided input on several aspects of the RFC, including increasing the operating fee exemption for credit unions below $10 million in assets. In addition, we offered suggestions on how the agency can improve the annual diversity self-assessment, which we stress must remain voluntary.
The National Credit Union Administration will host a webinar for credit unions interested in offering payday alternative loans or other forms of short-term lending.
Register here for the November 16th webinar scheduled for 3:00 PM ET.
The NCUA board voted at a special meeting Wednesday to issue a joint interagency proposal on the role of supervisory guidance. The proposal was announced last week, and comments will be due within 60 days of its publication in the Federal Register.
Specifically, it codifies a September 2018 statement that supervisory guidance does not have the force and effect of law. Agencies issuing the rule include the Office of the Comptroller of the Currency, Federal Reserve, Federal Deposit Insurance Corporation and Consumer Financial Protection Bureau.
CUNA wrote to the CFPB in support of the intent to eliminate abusive credit card practices but warned against requirements that would make compliance more cumbersome for credit unions. The letter was in response to a request for information on the consumer credit card market, the CARD Act and its implementing regulations.“While CUNA continues to support the stated intent of the CARD Act, which is to eliminate predatory credit card practices, we caution against any expansion of regulatory requirements that would make CARD Act compliance more cumbersome for member-owned credit unions,” the letter reads. “The Bureau should focus on ensuring its rules provide meaningful consumer protections while minimizing regulatory compliance burdens on credit unions that already offer fair and sound credit card services to their members.”
CUNA filed comments with the Federal Communications Commission (FCC) on the latest round of Telephone Consumer Protection Act (TCPA) regulations. This rulemaking is designed to implement a TRACED Act provision requiring review of TCPA’s “prior consent” exemptions. In the letter, CUNA points out that credit unions, as non-profit cooperatives, have a unique relationship with their members that requires unfettered informational communications on issues ranging from governance and financial education to critical fraud alerts and account status calls and texts. Credit union members want and often need to receive these calls, and the adoption of an “opt-out” regime and record keeping obligations would treat these communications like telemarketing calls, hindering credit unions’ ability to provide vital information to their members.
CUNA’s letter further argues that the FCC should not adopt limitations on the number of calls that can be made pursuant to the exemptions for these informational or non-solicitation calls, and asks for an expansion of the existing exemptions for informational calls and texts to wireless phones. CUNA has a petition requesting similar relief on file with the FCC.
CUNA filed a comment letter in support of NCUA’s proposal to amend its regulation governing assessment of the annual operating fee to FCUs. The proposal would primarily:
The Consumer Finance Protection Bureau (CFPB or the Bureau) issued a final rule extending the sunset date for the GSE Qualified Mortgage (QM) Patch. The GSE QM Patch temporarily defines certain mortgages eligible for purchase by Fannie Mae and Freddie Mac as QMs that receive liability protections against claims that the loans were originated in violation of the Truth in Lending Act. This final rule amends Regulation Z to replace the previous January 10, 2021 sunset date of the GSE QM Patch with an expiration on the mandatory compliance date of final amendments to the General QM loan definition, which is being determined through a separate rulemaking.
The National Credit Union Administration will host a webinar on financial inclusion and minority depository institutions on October 21.
Registration is now open for this webinar, “Pathways to Consumer Financial Well-Being: The Importance of Financial Inclusion and Minority Depository Institutions.” It is scheduled to begin at 2 p.m. Eastern and run approximately 60 minutes. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. They should allow popups from this website.
This webinar is open to consumers, credit unions, and parties interested in working with credit unions to expand access to safe and affordable financial services in underserved communities.
CUNA filed a comment letter in support of the NCUA’s proposed rule that would allow credit unions to phase-in over three years the day-one adverse impact on regulatory capital that will likely result from adoption of CECL. Consistent with regulations issued by the federal banking agencies, the proposed rule would temporarily mitigate the adverse PCA consequences of the day-one capital adjustments, while requiring that credit unions account for CECL for other purposes, such as Call Reports. While consistent with the rule recently adopted by the banking regulators, the NCUA proposal includes a few differences.
We wrote in to Senate Majority Leader McConnell urging that the bipartisan Paycheck Protection Program (PPP) forgiveness legislation be included in the current pandemic relief package being negotiated in the Senate. S. 4117, the Paycheck Protection Program Small Business Forgiveness Act was introduced by Sens. Kevin Cramer (R-ND), Bob Menendez (D-NJ), Thom Tillis (R-NC) and Kyrsten Sinema (D-AZ) at the end of June.“S. 4117 would ensure those businesses can focus their time, energy, and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms,” the letter reads.
The Board received a briefing on cybersecurity considerations for boards of directors during the pandemic.
CUNA submitted comments to the Financial Crimes Enforcement Network (FinCEN) in response to their update, without change, of certain Bank Secrecy Act (BSA) estimates of the industry burden imposed by customer identification program (CIP) regulations.
CUNA submitted comments to the Federal Housing Finance Agency in response to its proposed 2021 housing goals for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the GSEs).
Comments on NCUA’s current expected credit loss (CECL) proposal are among several comment deadlines for credit unions during October. CUNA calls on credit unions to submit comments and has prepared a summary of the proposal.
The CFPB released its Outline of Proposals Under Consideration for its small business data collection rulemaking pursuant to Section 1071 of the Dodd-Frank Act. As a result, the Bureau is extending the deadline for financial institutions to complete the Section 1071 One-Time Cost survey.
The survey will remain open until October 16 and is available on the Bureau’s website.
The National Credit Union Administration will host a webinar on financial inclusion and minority depository institutions on Oct. 21.
CUNA wrote to Representative Mike Gallagher (R-WI) in support of The Student Empowerment and Financial Literacy Act which would establish a Department of Education grant program encouraging K-12 schools to offer financial literacy programs. This legislation aligns with credit unions’ mission to improve the financial well-being of members.
The program outlined in the bill would award three-year grants through a competitive process, prioritizing educational institutions in underbanked communities.
CUNA submitted comments on the Federal Housing Finance Agency’s (FHFA) Strategic Plan for Fiscal Years 2021-2024. FHFA is responsible for oversight of the Federal Home Loan Banks (FHLBanks) System, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the GSEs).
The House voted to pass an updated HEROES Act COVID-19 relief legislation. CUNA wrote to House leadership noting areas of supports, specific concerns and additional suggestions. “We appreciate the swift response that Congress and the administration have undertaken to address the economic consequences of the pandemic. More needs to be done, and still more will need to be accomplished in the months and years ahead. As financial first responders, America’s credit unions stand willing and able to help consumers and small businesses during the crisis and into recovery.”
CUNA submitted comments generally supporting the CFPB's proposed “Seasoned” Qualified Mortgage (QM) to aid in the expansion of the residential mortgage market. The CFPB has proposed rulemaking to create a new category of QMs, Seasoned QMs, for first-lien, fixed-rate covered transactions that meet certain performance requirements over a 36-month seasoning period.“The potential of a Seasoned QM category to aid in the expansion of the residential mortgage market in a manner that balances consumer access to affordable credit with meaningful consumer protections is an appropriate use of the CFPB’s rulemaking authority and consistent with its statutory mission,” the letter reads.
CUNA joined other trades in writing to Congressional leadership in support of additional Paycheck Protection Program (PPP) funding and a simplified PPP loan forgiveness. The letter urges members of Congress not to leave Washington, D.C. without working to pass legislation to add additional PPP funding.“Throughout the pandemic, helping small businesses has consistently been bipartisan,” the letter reads. “As lenders that support our nation’s small businesses and stepped up to help deliver the critical relief the Paycheck Protection Program provided, we strongly urge members of the Senate and House to continue these bipartisan efforts by quickly supporting an extension of PPP funding and a simpler forgiveness process that will make converting loans into grants easier and less technical for millions of small business borrowers that have PPP loans.”
CUNA wrote to the House Financial Services Task Force on Financial Technology prior to the hearing on "License to Bank: Examining the Legal Framework Governing Who Can Lend and Process Payments in the Fintech Age." Credit unions welcome fintech innovation and competition, but are concerned that many products and services offered by fintechs skirt consumer protection regulations example and cited the “payment charter” proposed by Acting Comptroller of the Currency Brian Brooks.“Recently, Acting Comptroller of the Currency, Brian Brooks, has proposed what has been called a “Payment Charter,” but this appears to be a national money transmitter license that preempts state licenses requirement and provide a possible onramp for nonbanks to directly access to the Federal Reserve's payment clearing system,” the letter reads. “The Acting Comptroller has indicated in several forums that the OCC does not need to pursue rulemaking for the payments charter and that the Acting Comptroller can approve this charter at any time.
CUNA joined with other trade associations to send reply comments to the Federal Communications Commission (FCC) regarding its proposed regulations to eliminate unlawful robocalls pursuant to the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act). The TRACED Act, among other things, requires the FCC to ensure that robocall blocking services are provided to consumers with transparent and effective redress options for callers whose calls are erroneously blocked.
This week, the House of Representatives will complete consideration of H.R. 6270, the Uyghur Forced Labor Disclosure Act of 2020. In addition, the House may consider possible coronavirus relief legislation.
The Senate will convene at 3:00 pm on Tuesday, September 29, and resume consideration of H.R. 8337, the Continuing Resolution.
In addition to the hearings in Senate Banking and House Financial Services, two House Small Business Subcommittees met this week to discuss the Paycheck Protection Program. We took the opportunity to outline additional steps that should be taken if Paycheck Protection Program (PPP) funding becomes available and wrote in support of H.R. 7777, Paycheck Protection Program Small Business Forgiveness Act and its Senate companion S. 4117.
Below you will find the letter to each respective Committee:
CUNA sent a letter to the Federal Reserve Board in support of their FedNOW development efforts, an instant payment service that the Federal Reserve Banks are developing to enable financial institutions to provide safe and efficient instant payment services in real time.
Section 1071 requires financial institutions to compile, maintain, and report to the bureau certain information about applications for credit made by women-owned, minority-owned, and small businesses. To assist the process, the CFPB is conducting a survey of institutions offering small business credit products to determine potential one-time costs associated with complying with a small business data collection.
The House Financial Services Committee and the Senate Banking Committee both scheduled hearings on the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act - pandemic relief legislation which, among other things, created the Paycheck Protection Program (PPP).
Prior to the hearings with Secretary Mnuchin and Chairman Powell we wrote to the Chair and Ranking Member of each Committee urging for the passage of PPP loan forgiveness legislation. Credit unions facilitated more than 170,000 PPP loans averaging $49,000 each.
“While PPP lending has concluded, there are a number of steps that SBA should take if additional funds become available. SBA should improve their national and regional operation in order to provide more timely feedback to lenders and borrowers, including lender prioritization guidance, official guidance formalizing the use of PPP forms and guidance on the loan purchasing process,” the letter reads. “Furthermore, the SBA should issue guidance and forms to reflect that privately insured state-chartered credit unions are eligible to lend through the program.”
CUNA wrote to Chairman Wicker and Ranking Member Cantwell prior to the Senate Commerce Committee's data privacy hearing urging the Committee to enact meaningful data security and privacy legislation.
Last week, Senators Wicker, Thune, Fischer and Blackburn introduced the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act. If enacted, the bill would simplify privacy and data security laws by a creating national standard which would add protections for all Americans while reducing compliance burdens stemming from compliance with many standards across the states.
CUNA submitted comments supporting the Consumer Financial Protection Bureau’s proposed rule on higher-priced mortgage loan (HPML) exemptions. The CFPB proposed several amendments to Regulation Z to exempt certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for HPMLs.
“We believe that this exemption represents a positive step forward to ensure that small, leanly staffed credit unions are not burdened with costly regulatory obligations that could prevent them from offering mortgage products that are right for a members’ financial situation,” the letter states. “We commend the Bureau for this codification of the statutory exemption.”
The House voted to pass two CUNA-supported pieces of legislation, H.R. 5532, the Ensuring Diversity in Community Banking Act of 2019 and H.R. 6735, the COVID-19 Fraud Prevention Act. Prior to the vote on the House floor, CUNA wrote to Speaker Pelosi and Minority Leader McCarthy in support of both pieces of legislation.
H.R. 5532 would encourage federal government deposits in Minority Depository Institutions (MDIs), establish a Small Business Administration task force focused on MDIs and Community Development Financial Institutions and require diversity and inclusion reports from each prudential regulator.H.R. 6735 would establish a working group that would be a collaboration between the Securities and Exchange Commission and Consumer Financial Protection Bureau with the goal of helping to protect scam attempts during the pandemic.
CUNA submitted comments to the CFPB regarding their proposed rule titled, “Higher-Priced Mortgage Loan Escrow Exemption (Regulation Z).” This rule amends Regulation Z to exempt certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for higher-priced mortgage loans (HPMLs).
This week, the House of Representatives will vote on a continuing resolution (text unavailable) to keep the government open past September 30th until December 11, 2020. In addition, the House may consider H.R. 4447, the Clean Economy Jobs and Innovation Act; H.R. 6210, the Uyghur Forced Labor Prevention Act; and H.R. 6270, the Uyghur Forced Labor Disclosure Act of 2020.
Also, the House will consider the following bills under suspension of the rules:
H.R. 6735 - COVID-19 Fraud Prevention Act, as amended (Sponsored by Rep. Cindy Axne / Financial Services Committee)
H.R. 5698 - Promoting Secure 5G Act of 2020 (Sponsored by Rep. William Timmons / Financial Services Committee)
H.R. 6294 - Improving Emergency Disease Response via Housing Act of 2020, as amended (Sponsored by Rep. Scott Tipton / Financial Services Committee
H.R. 5322 - Diversity in Community Banking Act, as amended (Sponsored by Rep. Gregory Meeks / Financial Services Committee)
H.R. 6934 - To amend the CARES Act to require the uniform treatment of nationally recognized statistical rating organizations under certain programs carried out in response to the COVID–19 emergency, and for other purposes (Sponsored by Rep Madeleine Dean / Financial Services Committee)
H.R. 7592 - STIFLE Act of 2020 (Sponsored by Rep. Ben McAdams / Financial Services Committee)
The Senate will convene at 3:00 pm on Monday, September 21st and resume consideration of Executive Calendar #603, Edward Hulvey Meyers, of Maryland, to be a Judge of the United States Court of Federal Claims for a term of fifteen years.
Summary of the September 2020 NCUA Board Meeting.
CUNA wrote to NCUA Chairman Rodney Hood to engage with NCUA on pandemic-related issues.
FinCEN is issuing a final rule implementing sections 352, 326 and 312 of the PATRIOT Act and removing the anti-money laundering program exemption for banks that lack a Federal functional regulator, including non-federally insured credit unions.
Prior to the House Financial Services Committee hearing re: “Prioritizing Fannie’s and Freddie’s Capital over America’s Homeowners and Renters? A Review of the Federal Housing Finance Agency’s Response to the COVID-19 Pandemic,” CUNA wrote to Chairwoman Waters and Ranking Member McHenry about how mortgage forbearance, homeowner and rental assistance programs, and the refinance fee increase affect credit unions and their members.
Our letter writes in support of H.R. 6729, the COVID-19 Homeowner Assistance Fund Act, which provides $75 billion for states and territories to prevent mortgage defaults, foreclosures, and displacements of individuals and families experiencing financial hardship due to COVID-19.
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