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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.
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