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During its Board meeting, FASB addressed several operational issues related to the CECL (current expected credit loss) accounting standard. The issues were brought to the Board’s attention during a June meeting of FASB’s Transition Resource Group (TRG) on Credit Losses. The TRG, which includes credit union and other financial institution representation, has an ongoing mandate to examine CECL and alert potential problems with implementation to the Board so it can address those issue
The Bureau issued an interpretive rule clarifying changes made to HMDA reporting by S. 2155.
The rule is effective upon publication in the Federal Register and appears to be straight-forward guidance providing clarification on the Bureau’s interpretations of the new HMDA partial exemptions. The Bureau plans on issuing textual changes to Regulation C for notice-and-comment “at a later date.”
CUNA sent comments to NCUA regarding the agency’s supplemental proposal to amend the 2015 Risk-Based capital rule. The proposal would increase the threshold for compliance eligibility from $100 million to $500 million. CUNA believes the threshold would be more appropriately set at $10 billion.
The Wage and Hour Division of the Department of Labor will host a series of listening sessions to gather feedback related to its overtime regulations under the Fair Labor Standards Act (FLSA).
The “Overtime Rule” was finalized in May 2016 but a federal court enjoined the rule prior to its effective date. Last year, the Dept. issued a Request for Information (RFI) to solicit comment on the appropriate salary level for the “white collar” exemption and methodologies for calculating the threshold. In response, CUNA raised concerns that the rule nearly doubled the prior threshold and established overly strict compliance requirements.
CUNA joined other trade associations in sending a letter to Senate Leadership to ensure regulatory relief language remains in the conference committee version of the 2019 FSGG Appropriations bill. The signers The signers called for the bill to retain the text of the H.R. 1153, Mortgage Choice Act, a bipartisan bill that has passed the House in February and is consistent with CUNA’s Campaign for Common-Sense Regulation.
Specifically, H.R. 1153 would make minor adjustments to the Truth in Lending Act definition of "points and fees" to ensure greater consumer choice.
NCUA issued Supervisory Letter 18-01, outlining examination expectations regarding Bank Secrecy Act and Anti-Money Laundering compliance. NCUA’s updated BSA examination questionnaire is expected to be included in the September AIRES release, with examinations including the updated compliance violation schedule commencing subsequent. The letter notes that credit unions making good faith efforts to effectively comply the FinCEN’s May 11, 2018 Customer Due Diligence rule shall not be subject to compliance violations for infractions thereto.
The Senate is expected to consider executive and judicial nominations.
The House remains in recess until September 4, 2018.
The IRS released interim guidance regarding certain UBIT provisions in the Tax Cuts and Jobs Act of 2017 (TCJA). Notice 2018-67 will be published in Internal Revenue Bulletin 2018-36, dated September 4, 2018.
The new tax law requires the separate computation of UBIT for tax-exempt organizations with more than one unrelated trade or business. Before the TCJA, when a tax-exempt organization operated more than one unrelated trade or business activity, losses generated by one business could be used to offset income derived from another. Now, losses generated by one unrelated trade or business cannot be used to offset income derived from another unrelated trade or business. Clearly, this results in an increase in unrelated business taxable income and must be reported in a revised IRS Form 990-T. This provision became effective on January 1, 2018.
The Senate overwhelmingly passed a fiscal 2019 funding package, H.R. 6157, to fund the departments of Defense, Labor, Education and HHS. The leadership of both parties in the Senate are attempting to avoid a government shutdown on October 1, 2018, the first day of the 2019 fiscal year.
The BCFP issued its annual threshold adjustments for regulations implementing TILA and amendments to TILA, including the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA) and the Dodd-Frank Act. These thresholds are adjusted annually based on changes in the Consumer Price Index.
Of note, after being unchanged in 2018, the CARD Act penalty fee safe harbor is being increased by $1 for 2019. As a result, the penalty fee safe harbor for violating the terms of an open-end consumer credit plan will be $28 for a first violation and $39 for a subsequent violation.
The Bureau released its fourth Quarterly Consumer Credit Trends Report. These quarterly reports are based on analysis of about five million de-identified records from the three credit reporting agencies.
The current report focuses on telecommunications debts – i.e. consumer debts for landline/cell phone, cable, and internet services – in consumer credit records. According to the Bureau, these debts are “among the most common debts that creditors or debt collectors seeks from consumers.”
The Senate Banking committee voted in favor of Kathy Kraninger to become the permanent director of the Bureau of Consumer Financial Protection (BCFP). Kraninger, who currently serves in the Office of Management and Budget, was nominated by President Donald Trump in June to take the place of Acting Director Mick Mulvaney.
CUNA looks forward to learning more about Kraninger's views on consumer protection regulation, supervision and enforcement.
The Wall Street Journal posted CUNA’s response to last week’s opinion piece by the President of the Florida Bankers Association.
“Critics of the credit union tax status say credit unions use a tax advantage to create a stranglehold on the market, a claim that is patently false. While credit unions were established to provide many of the same services as banks, their tax status has always been about the structure and mission of credit unions; it has never been about the size or powers of credit unions. A credit union’s growth is a key indicator that it is doing exactly what Congress intended when it established their tax status: it is successfully serving its members."
CUNA and the League system are seen as the most influential financial services organizations and one of the most effective advocacy organizations in Washington, according to an independent study conducted by Ballast Research (formerly National Journal Research). Once again, CUNA is the leading association at representing the interests of its members, due to its success in creating the credit union narrative and sharing their story among Washington policymakers.
“The CUNA/League system is viewed as the trusted voice of credit unions and a respected advocate for credit union interests among policymakers,” said CUNA president/CEO Jim Nussle. “The competition for awareness on Capitol Hill is fierce, so knowing where we stand among influencers in Congress is important. Being an influential and effective source among policymakers means they welcome our calls and visits. We educate and fight for credit union issues on Capitol Hill and are proud to celebrate this major accomplishment.”
CUNA Senior Director of Advocacy and Counsel Alexander Monterrubio appeared on CUBroadcast recently to discuss CUNA’s latest efforts at finding a solution to credit unions being hit with abusive lawsuits under the Americans with Disabilities Act (ADA). Credit unions are facing these lawsuits due to uncertainty about how the ADA applies to websites.
Monterrubio said finding a solution is one of CUNA's top advocacy priorities, and the issue is likely to persist Department of Justice (DOJ) comes out with some form of guidance or rulemaking. He also noted that there has been a slowdown in the number of lawsuit filed and demand letters, but that could always change.
The NCUA announced its first-ever Financial Regulatory Agencies’ Diversity and Inclusion Summit, to be held Thursday, September 13, from 8 a.m. to 12:30 p.m. at the Federal Reserve Bank of New York, 33 Liberty Street, New York, NY.
The Summit will give stakeholders opportunities to:
FASB agreed to
propose a change regarding the effective date of the CECL (current expected
credit losses) standard as it applies to credit unions and other non-Public
Business Entities (non-PBE).
Critics of the credit union tax status seem to have it all figured out. They say credit unions use a tax advantage to create a stranglehold on the market that puts banks at a competitive disadvantage. Of course, this claim is patently false, blatantly misleading, and willfully ignorant.
Credit unions were established to provide many of the same services as banks, and that is where the similarities between credit unions and banks end.
Last week, the President of the Florida Bankers Associations published an opinion piece in the Wall Street Journal attacking the tax status of America’s credit unions.
The House of Representatives remains in recess until September 4, 2018.
The Senate reconvenes today to consider H.R.6157, the Minibus Appropriations Act (Defense and Labor/HHS).
In a Mortgagee Letter dated August 15, the Federal Housing Administration (FHA) announced new policies to prevent foreclosures in areas affected by Hurricane Maria.
Specifically, servicers of FHA loans in Presidentially-Declared Major Disaster Areas (PDMDAs) in Puerto Rico and the U.S. Virgin Islands are asked to evaluate borrowers’ eligibility for relief under the FHA’s disaster Loss Mitigation Waterfall where the following criteria are met:
1. The Mortgage was current or less than 60 days past due as of the date of the applicable Disaster Declaration;
2. The Mortgagee confirms that the Borrower’s income (e.g., wages, social security, pension, annuity, etc.) is equal to or greater than it was prior to the Disaster;
3. The Borrower demonstrates the ability to resume total monthly mortgage payments of Principal, Interest, Taxes, and Insurance (PITI);
4. The dwelling is owner-occupied;
5. The total Principal and Interest (P&I) amount of a Borrower’s monthly Mortgage Payment does not change;
6. The Mortgagee waives the Borrower’s accumulated late fees; and
7. The Disaster Standalone Partial Claim is subject to the maximum statutory value of all Partial Claims for an FHA-insured Mortgage.
The Senate Commerce Committee held an oversight hearing on the Federal Communications Commission (FCC). Prior to the hearing, CUNA wrote to Chairman Thune and Ranking Member Nelson telling them that credit unions need regulatory relief from the Telephone Consumer Protection Act.
It’s been widely reported that the BCFP is considering ending examination activities related to the Military Lending Act (MLA). This policy shift is proposed in an internal memo arguing that the Bureau does not currently have the authority to conduct such examinations.
Director Mulvaney has maintained on several occasions that the Bureau should aim to limit its authority to situations where such authority has been clearly provided by Congress. In this case, the Dodd-Frank Act provides the BCFP with the authority to conduct examinations related to provisions in Dodd-Frank and other “enumerated consumer laws.” However, the MLA does not appear on the list of enumerated laws in Dodd-Frank.
CUNA and credit union league staff attended the American Legislative Exchange Council (ALEC) in New Orleans. ALEC is America’s largest nonpartisan voluntary membership organization of state legislators dedicated to the principles of limited government, free markets, and federalism. Comprised of nearly one-quarter of the country’s state legislators and stakeholders from across the policy spectrum, ALEC members represent more than 60 million Americans across the country.
This week, the Senate will confirm two more circuit court nominees and begin processing H.R. 6157, the Defense-Labor-HHS-Education appropriations bill.
The House remains in recess until September 4, 201
On August 15, at 2pm Eastern, NCUA’s Office of Credit Union Expansion & Resources will host a free webinar on Share Insurance. Questions may be posed in advance.
CUNA will conduct two training programs for young credit union professionals in September, building off the successful program CUNA hosted last year. Registration is open now for the all-day programs, scheduled for September 10 and September 24 in CUNA’s Washington, D.C. office.
The Small Business Administration’s (SBA) Office of Advocacy filed an ex parte communication memo with the Federal Communications Commission (FCC). In their letter, the SBA shared credit union concerns regarding the Telephone Consumer Protection Act (TCPA). CUNA’s Small Credit Union Committee requested that the SBA advocate on behalf of credit unions and appreciate their efforts.
CUNA has urged the FCC to clarify several issues under the TCPA, as it creates compliance burdens and potential liability for credit unions trying to communicate important account information to members.
“Defining key statutory terms such as an automatic telephone dialing systems (ATDS) and ‘called party’ and identifying reasonable methods to revoke consent consistent with the TCPA’s language and intent will substantially reduce uncertainty and help mitigate the onslaught of TCPA litigation. The commission should also use this opportunity to update antiquated distinctions between wireless and wireline calls when companies make informational calls to their customers or members, as requested in CUNA’s petition for declaratory ruling.”
A lawsuit against Aurora Policeman CU (APCU) in Illinois was dismissed by the U.S. District Court for the Northern District of Illinois for lack of standing. Similar predatory lawsuits have detrimentally impacted credit unions nationwide alleging non-compliance with the Americans with Disabilities Act (ADA).
At the end of February, CUNA and the Illinois Credit Union League filed an amicus brief support of Aurora Policeman's motion to dismiss the complaint. APCU was one of many credit unions in Illinois and across the country that received a demand letter threatening litigation or has been sued for alleged non-compliance with the ADA.
CUNA's President and CEO, Jim Nussle published an op-ed in the Credit Union Journal celebrating the 20th Anniversary of the enactment of H.R. 1151, the Credit Union Membership Access Act. As a Member of Congress, Jim was a proud supporter of the legislation because he understood it was necessary for credit unions to be able to continue to serve their members and their communities.
“Today, I am even prouder of the work credit unions have done since to take advantage of H.R. 1151 – growing the credit union movement to more than $1 trillion in assets, expanding service to more than 110 million Americans and delivering billions of dollars of financial benefit every year.” -- Jim Nussle
CUNA and credit union league staff joined more than 5,000 attendees in Los Angeles at the National Conference of State Legislatures (NCSL) Legislative Summit.
Engagement at the NCSL Legislative Summit is particularly important because legislators adopt policies in NCSL’s eight standing committees. The adopted policies become the backbone of NCSL’s efforts to fight unwarranted federal preemption of state laws, unfunded mandates, and federal legislation that threatens state authority and autonomy. Of note, the NCSL passed a directive calling on Congress to amend the Controlled Substances Act to remove cannabis from scheduling, thus enabling financial institutions the ability to provide banking services to cannabis related businesses. The directive passed without dissent.
The NCUA board issued a lending proposal, finalized a suspensions and debarment rule and extended the federal credit union loan interest rate ceiling, among other items on the agenda at its most recent board meeting. The board also approved a proposed rule to delay NCUA’s risk-based capital rule by one year.
The Senate voted in favor of the National Defense Authorization Act (NDAA) conference report that omits a harmful provision to military credit unions. As a result, credit unions will continue to receive exemption from costs associated to the furnishing of office space and/or land (including ATM placement) on military bases – as governed by Section 124 of the Federal Credit Union Act.
CUNA strongly pushed for removal of Section 2808 from the NDAA which intended to treat federal or state charted insured depository institutions equally with respect to the financial terms of leases, services and utilities. However, the definition of "insured depository institutions" excluded credit unions.
The Senate passed its Financial Services and General Government (FSGG) Appropriations Act for Fiscal Year 2019 as part of four appropriations bills. Prior to the Senate's vote, CUNA wrote to Majority Leader McConnell and Minority Leader Schumer in support of this legislation.
“We thank the Senate for passing the bill, and for the attention of Senate appropriators to call for full funding for several important funds that credit unions are able to leverage to better serve their members and communities,” said CUNA President/CEO Jim Nussle.
This legislation includes CUNA-supported funding of $250 million for the Community Development Financial Institutions (CDFI) Fund. This account is fully funded at Fiscal Year 2018 levels, an achievement in this austere fiscal climate. The House passed counterpart to this week’s Senate bill includes $248 million for the CDFI Fund. We remain confident that the Senate position on CDFI funding will prevail in the final funding bill for fiscal year 2019.
This legislation also includes CUNA-supported funding of $2 million for the Community Development Revolving Loan Fund. This is same amount received by the Fund in Fiscal Year 2018 levels, a significant achievement in this austere fiscal climate.
The NCUA Board met today for its July meeting (postponed from last week). The Board issued a proposal to delay the effective date of the agency’s risk-based capital rule by one year (from January 1, 2019, to January 1, 2020). The proposal would also raise the asset threshold for a complex credit union from $100 million to $500 million.
The Treasury Department released its much-anticipated Report on Nonbank Financials, Fintech, and Innovation. This is the fourth and final report on the financial regulatory landscape to be issued by the Department, which was required to conduct its review pursuant to an executive order by President Trump.
In total, the Report contains over specific 80 recommendations for regulatory and legislative action that would better encourage innovation and regulatory efficiency. While many expected the Treasury Department to voice its support for the creation of a unified “regulatory sandbox” and the national bank charter for online lenders, there are several other recommendations that stand out as especially noteworthy for credit unions.
CUNA joined other financial trade associations in sending a letter to Chairman Latta of the Subcommittee on Digital Commerce and Consumer Protection. In the letter, the trades wrote about how major merchant data breaches continue to put millions of consumers at risk.
The letter highlights principles the trades believe should be part of any data breach bill:
CUNA wrote to Chairman Latta of the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection. In the letter CUNA wrote that mitigating losses from data breach remains a top credit union priority.
Data breaches that expose card information and consumers’ personally identifiable information, such as what happened with the 2017 Equifax data breach, cost credit unions and their member owners enormous sums of money and, in the case of Equifax, give criminals much personal information which can be used to directly defraud credit unions and other financial institutions.
CUNA submitted comments to NCUA on the agency’s proposed payday alternative loan (PAL) II rule. While CUNA appreciates NCUA’s efforts to increase short-term, small-dollar lending opportunities, CUNA believes the current proposal does not go far enough. In particular, the proposed APR rate cap (unchanged from PAL I) of 28% is too low and misaligned with the BCFP’s Payday Lending rule, as well as the DoD’s Military Lending Act-both of which set the maximum APR at a more realistic 36%.
New bank tax savings
vs. the “cost” to the taxpayers of the credit union federal income tax status.
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© 2019 Credit Union National Association
ADA Compliance Notice & Legal
© 2019 Credit Union National Association
ADA Compliance Notice & Legal