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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.
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