Removing Barriers Blog

2016 Regulatory Outlook
Posted January 04, 2016 by CUNA Advocacy

We expect 2016 to be very busy on the regulatory side of things. One of CUNA’s top issues right now is the NCUA’s Field of Membership proposed rule, which has a comment period that ends on February 8th.

We also anticipate that NCUA will propose a separate rule as an ancillary to the recent final Risk-Based Capital rule that will allow the acceptance of Supplemental Capital that could be included in the numerator of the risk-based capital ratio. 

As President Obama heads into his last year in office, we at CUNA expect the issuance of proposed and final rules from agencies to become a major priority for the Administration. Many of the regulatory issues on which we’ve been following and working with agencies, are expected to move forward this year. Accordingly, we will continue firmly urging federal agencies to remove regulatory burdens impacting the ability of credit unions to serve their members.

Below are some of the issues that the Administration has indicated are on the priority list, and that we may see action on before the end of the year.

Consumer Financial Protection Bureau

Payday and Small-Dollar Lending

We are expecting a proposed rule on payday and small-dollar lending in early 2016. We’ve been continually telling CFPB staff that it is important to credit unions that members and others in their communities have access to credit on the best possible terms. Accordingly, we have cautioned the CFPB that adding more requirements to NCUA’s PAL program (and other similar programs at state chartered credit unions) could have the effect of causing credit unions to reevaluate their participation in this market – and hinder other credit unions from entering it. We’ve urged the CFPB to exempt credit unions entirely, and instead concentrate its rule on predatory lenders.

Overdraft Protection

The CFPB is continuing is multi-year research of this issue, so we do not expect a proposed rule for overdraft services for a few months. We believe some of our efforts have been effective in forcing the CFPB to spend more time studying this issue. It originally projected a pre-rule action in the fall of 2015, which has now been pushed to 2016. The latest rulemaking agenda indicates that the CFPB plans to release additional research in January 2016. We expect that the CFPB will hold a SBREFA panel in 2016 and we plan to participate.

Debt Collection

The CFPB published an ANPR for this rule in fall of 2013, but has not moved forward on a proposed rulemaking – likely because of the complexity and size of this undertaking. In the ANPR, the CFPB asked whether the scope of any rulemaking that would apply to third-party debt collectors should also apply to first-party creditors, and we filed comments opposing this. We expect a SBREFA panel for the proposed rule to be held in the first half of 2016 and we plan to participate.


In October, the CFPB released proposals under consideration for the arbitration SBREFA panel, and a CUNA member testified at the field hearing announcing them. We have also met with the CFPB to discuss the credit union perspective on arbitration, and sent a letter in response to the proposals under consideration. We expect a proposed rule on arbitration in 2016.

Prepaid Cards

A final rule for prepaid cards is expected in the first half of 2016. We’ve met with the CFPB to discuss the proposed rule, and filed formal comments in response to it. Our greatest concern with this rulemaking is the proposal to define prepaid card overdrafts as extensions of credit under Regulation Z.

U.S. Department of Labor

Overtime Pay

The Department of Labor (DOL) rulemaking agenda has indicated that a final rule for overtime pay could be released in July 2016. We filed comments with the DOL concerning this proposed rule which would raise the salary threshold to be eligible for overtime pay from $23,660 to $50,440 a year – nearly doubling the 2004 levels and encompassing five million more employees. In our comments, we argued that the proposed salary threshold for overtime is not appropriate for credit union employees in general, but may be particularly inappropriate for small credit unions and those in rural and underserved areas because a disproportional number of them will fall under this threshold.

Fiduciary Rule

We also believe that the DOL will publish the final rule concerning the proposed regulation defining who is a “fiduciary” of an employee benefit plan under the Employee Retirement Income Security Act of 1974 (ERISA) which includes adding brokers and advisers providing advice to individual retirement accounts. We filed comments with the DOL during the comment period, and filed additional comments in response to subsequent hearings the DOL held about the proposed rule. Our comments stated that we agree with the DOL that credit union members, and all consumers, deserve the best possible service when seeking information about retirement plans or Individual Retirement Account (IRA) distributions. However, it is important to have rules that encourage and promote retirement savings – rather than potentially chill the ability of credit unions, or other financial institutions, to provide these products and services.


Credit Impairment (CECL)

The Financial Accounting Standards Board (FASB) is in the final stages of reviewing a proposed standard that would drastically change the accounting method for assessing credit impairment. The proposal would require a forward-looking “current expected credit loss”—or CECL—model instead of the current “incurred loss” approach. We expect FASB to publish the final standard in the first quarter of this year. CUNA has been extremely active in advocating improvements to this proposal.

We are closely following the trajectory of all of these rulemakings and are continually engaging with the agencies on the impact to credit unions.