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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
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.
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.
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.
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
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
U.S. Department of
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.
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
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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