Courtesy of the New York Credit Union Association
Mellin congratulated Hochul on her selection of former Rep. Antonio Delgado (D-19) as lieutenant governor, and thanked both Hochul and Delgado for their ongoing support of credit unions.
Mellin also shared his desire to work with the Governor’s office and the Department of Financial Services to enhance the state’s credit union charter in ways that will bring the benefit of credit union membership to more New Yorkers.
Superintendent Harris Announces New Guidance Prohibiting Unfair and Deceptive Overdraft and Non-Sufficient Fund Fees
Action Addresses High-Cost Fees That Disproportionately Impact Low-Income New Yorkers
July 12, 2022 — New York State Department of Financial Services (DFS) Superintendent Adrienne A. Harris today announced the issuance of new DFS Guidance to New York-regulated banking institutions to promote financial inclusion by prohibiting unfair and deceptive overdraft and non-sufficient funds (NSF) fee practices. Today’s Guidance continues the Department’s commitment to making affordable banking products and services available to underserved communities, including low- and moderate-income individuals, immigrants, and people of color.
“Access to safe, affordable banking services is a critical component of financial health and stability,” said Superintendent of Financial Services Adrienne A. Harris. “This Guidance sets clear expectations for New York banks and credit unions to prevent improper or unfair charges of overdraft and NSF fees, to encourage these institutions to address demand for low-cost banking services and to prevent harm to the most vulnerable consumers of banking services.”
“Overdraft fees fall most heavily on consumers who are most vulnerable, such as people who are living paycheck to paycheck or have very low balances. New Yorkers work hard for their money and should feel financial security when they deposit their hard-earned income into their bank accounts,” said Senator Sanders. “I applaud the stance of regulatory institutions such as DFS in curbing and combatting these deceptive fees that target vulnerable populations.”
Specifically, the Guidance informs all regulated depository institutions of the need to avoid the following practices:
- Authorize Positive, Settle Negative (“APSN”) Transactions: charging consumers an overdraft fee even though the consumer had a positive account balance sufficient to cover the transaction when it was authorized by the institution.
- Double Fees Arising from Futile Overdraft Protection Transfers: charging a fee to consumers for an “overdraft protection” transfer from a consumer’s other account that is of an insufficient amount to avoid an overdraft, resulting in the consumer being charged both an overdraft fee as well as a fee for the “overdraft protection” transfer.
- Representment Fees: charging a consumer more than one NSF fee for the same declined transaction, without adequate disclosures, where the merchant re-presents the same transaction to the banking institution in a second or third attempt to collect funds.
Today’s action follows April’s Guidance encouraging State-regulated banks to offer “Bank On” certified accounts to fulfill the state’s affordable banking requirements. Bank On accounts eliminate overdraft fees and are critical to attracting individuals from underserved communities into the banking system. More recently, DFS undertook a data-driven review of check cashing fees and the methodology used to calculate such fees, knowing that many New York consumers, particularly members of immigrant communities and people of color, depend on check cashers as an essential financial service. The proposed regulation is currently open to for public comment. DFS commits to creating more data-driven, practical policies so that New Yorkers continue to have access to affordable and safe products.
A copy of the guidance on DFS expectations for overdraft and NSF fees can be found on the DFS website.
Courtesy of Sharon Simpson, CreditUnions.com
The New York credit union addresses financial readiness for military members via basic budgeting guidance as well as more in-depth financial planning for soldiers heading down the wrong path.
AmeriCU Credit Union ($2.6B, Rome, NY) was founded on Griffiss Air Force Base in 1950. At that time, it served only civilian members. Today — after two mergers, three name changes, and a charter conversion — the credit union serves members of the armed forces, veterans, and their families as well as Department of Defense employees and retirees.
According to its website, AmeriCU strives to provide “convenience, services, and value.” As part of its Enhanced Military Benefits program, it offers one-day early advanced pay for direct deposits, ATM fee rebates, pre-approvals on credit cards or personal lines of credit, special loan programs and discounts, and fraud alerts. But that’s not all. The cooperative’s Fort Drum team also attends middle-of-the-night homecomings and shows up for military spouses and children in other ways as well.
Here, Alissa Sykes Tulloch, executive vice president and chief operating officer, and Tina Thornton, assistant vice president of financial services, talk about how AmeriCU continues to focus on its military members even as its field of membership has expanded under a community charter.
AmeriCU’s membership eligibility is now geographic rather than tied directly to the military. Why does serving the military remain so important to the credit union?
Alissa Sykes Tulloch: Serving the military is in our roots. It goes back to how and why AmeriCU was established. We believe in what our service members do for our country, so we want to give back and support their needs throughout all their phases — from enlisted personnel to retirees — while providing for individuals and their families in all aspects.
How did AmeriCU choose to offer the specific items included in its Enhanced Military Benefits?
Tina Thornton: We started with advanced pay because we saw a need for it. When soldiers are in training, money management can become more difficult. Advanced pay provides our military members access to their direct deposit one day early.
We also recognize that the military is very mobile, so we created a checking account that offers up to $10 in monthly rebates on ATM withdrawals. Loan discounts are available for our military members as well, and we’ve enhanced fraud alerts and our online services in recent years to make it easier to apply for loans and manage money on the go.
AST: When soldiers are deployed or in training, they still have a life to manage. We need to have a direct understanding of what they face and find ways to serve them. For example, many are overseas, and a few countries trigger strict card fraud rules. As our members’ financial partner, we understand a military member’s behavior is different from a member who can simply call us to put a travel advisory on their card. A soldier might not know where they are going or their orders might be changed on a dime. So, we must be flexible and able to respond quickly whether that means express shipping a new card to the consulate or figuring out another solution
Courtesy of CUToday.info
June 28, 2022 — The U.S. Supreme Court has declined to review a decade-old New York court ruling that upheld a rule requiring federal credit unions in the state to impose the state’s mortgage recording tax.
Challengers to the law had argued the Federal Credit Union Act exempts federally chartered CUs from “all taxation,” other than taxes on real property and tangible personal property.
As CUToday.info reported earlier, home builder O’Donnell & Sons Inc. had argued in a petition filed in March that FCUs were exempt from the tax. O’Donnell & Sons had also filed a putative class action after Hudson Valley FCU, its lender, had passed the mortgage recording tax onto the company.
On Oct. 18, 2012, the New York Court of Appeals had held that federal credit unions are subject to New York State’s Mortgage Recording Tax, which requires a payment to New York State of one half of one percent (.5%) for the privilege of recording a mortgage.
In that case, the Court of Appeals in Hudson Valley Federal Credit Union v. New York State Dep’t of Taxation and Finance found that “[f]ederal credit unions are private associations chartered under federal law” and, although regulated by a federal agency, “they are wholly owned, funded and managed by their members.”
The court rejected HVFCU’s argument that a federal credit union is akin to a governmental agency providing immunity from state tax obligations, as well as other arguments made by the credit union.
NFT (non-fungible token) Vending Machine in New York
Courtesy of Jennifer A. Kingson, Axios
Why it matters: While most people would be hard-pressed to define what an NFT is, the tokens were all the rage at SXSW this year, and their arrival in an ATM in New York City’s Financial District may mean NFT-dispensing machines could grow as ubiquitous as cryptocurrency ATMs.
What they are: NFTs are “unique digital assets — often works of art, game characters and other creative products — that are recorded on a blockchain, or persistent digital ledger,” writes Axios tech editor Peter Allen Clark.
- “Think of them as digital collectibles.”
How it works: The ATM at 29 John St. in lower Manhattan was put there by Neon, which calls itself “a marketplace and gallery built on the Solana blockchain.” Neon sells unique digital pieces of art, in familiar forms like Baby Yoda.
- “The NFT ATM works very similarly to traditional ATMs,” according toCointelegraph. “You can purchase NFTs through the machine with your credit or debit card, and it will dispense boxes that contain unique codes that you can redeem through Neon’s platform.”
- “Much like Easter egg capsules, buyers will not know what NFT they’re getting until they redeem it.”
- Prices range from $5.99 to $420.69 (a tongue-in-cheek number derived from 420 — a marijuana reference — and a sex joke).
- Once a QR code inside the box is scanned, “the user can see their new piece of art on any smartphone, laptop or tablet,” Reuters says.
“As an NFT collector, over time, one of the things you love is the randomness of, ‘Which one are you going to get?'” Kyle Zappitell, CEO of Neon, said in an interview with Reuters.
- The target customer is “the crypto curious, the people who tried to buy cryptocurrency or they were interested in buying an NFT, but they just hit too many barriers.”
What’s next: Neon plans to add more artists to its platform and open more NFT ATMs in different cities, Jordan Birnholtz, co-founder and chief marketing officer of Neon, tells Cointelegraph, a news outlet that covers fintech, blockchain and the future of money.
- “NFTs are going to let a variety of visual, multimedia and performing artists create new ways to build relationships with and monetize their audience,” Birnholtz told the publication.
NCUA Returns Control of GA and NY Credit Unions to Members
March 1, 2022 – The National Credit Union Administration today announced that Southern Pine Credit Union of Valdosta, Georgia, will once again be under the control and direction of its members, effective March 17, 2022.
Southern Pine Credit Union is a federally insured, state-chartered credit union with 1,594 members and assets of $42,842,199, according to the credit union’s most recent Call Report. Southern Pine Credit Union serves current and retired employees of Packaging Corporation of America, Valdosta, Georgia, and their immediate family members.
NCUA placed Southern Pine Credit Union into conservatorship in June 2020. The credit union is the second federally insured credit union to emerge from NCUA conservatorship in 2022.
Municipal Credit Union, located in New York City, is once again under the control of its members after release from conservatorship, the National Credit Union Administration (NCUA) and the New York State Department of Financial Services (DFS) announced. DFS took possession of Municipal Credit Union in May 2019 and appointed the NCUA as conservator to ensure the credit union’s financial stability and safe-and-sound operation. Member services continued uninterrupted.
“Municipal Credit Union’s emergence from conservatorship is a significant victory for the hundreds of thousands of New Yorkers who rely on the institution for their financial needs,” said DFS Superintendent Adrienne A. Harris. “This successful collaboration of state and federal regulators puts the credit union back under New York State supervision, and we look forward to its continued operation in a safe and sound manner.”
According to its most recent Call Report, Municipal Credit Union is a federally insured, state-chartered credit union with 586,597 members and assets of more than $4 billion. Municipal Credit Union serves persons working for the city of New York, along with other approved groups and associations.
ACTING SUPERINTENDENT ADRIENNE A. HARRIS ANNOUNCES PROPOSED AMENDMENT TO PROTECT CONSUMERS FROM PREDATORY DEBT COLLECTION
Proposed Amendment to Debt Collection Regulation Will Help Ensure New Yorkers Pay Only Debts They Owe and Only Pay Them Once
December 15, 2021 — Acting Superintendent of Financial Services Adrienne A. Harris today announced that the New York State Department of Financial Services (DFS) proposed a new amendment to 23 NYCRR 1, the Department’s regulation governing debt collectors and debt buyers, to protect consumers from predatory debt collection practices and scams. Considering the findings from DFS’ investigations of abusive and deceptive debt collection, as well as data on consumer complaints to regulators, the Department is proposing the amendment to ensure consumers pay only debts they owe and pay them only once.
“Predatory debt collection practices can deceive consumers and ultimately lead them further into economic hardship,” said Acting Superintendent Harris. “DFS’ proposed amendment requires clear communication on consumer debt obligations and ensures the consumer has the right information to dispute the validity of the debt. This amendment enhances consumer protections through increased transparency and prevention of harassment, helping put people on a path to financial well-being.”
This proposed amendment will enhance disclosures to consumers, reduce opportunities for debt collectors to mislead consumers about their debt obligations, and prevent harassment of consumers with excessive communication through stricter limits on phone calls than federal regulations impose. The proposed amendment will:
- Help ensure consumers pay only debts they owe and pay them only once by mitigating opportunity for predatory debt collection through changes that address specific actors and specific harms;
- Require debt collectors to provide key data about the alleged debt to the consumer and maintain records relating to the alleged debt so that the consumer can identify the debt or dispute the allegation;
- Reduce opportunities for debt collectors to mislead consumers about the character of the debt and their obligations to pay through disclosure requirements, including mandated written disclosures; and
- Limit harassing phone calls and other excessive communication from debt collectors.
To access a copy of the proposed amendment, please go to the DFS website.
Superintendent Lacewell Announces Proposed DFS Guidance to New York Insurers on Managing the Financial Risks from Climate Change
Proposed Guidance Outlines Expectations that New York Insurers Integrate the Consideration of Climate Risks into their Governance Frameworks, Risk Management Processes and Business Strategies, and Develop their Approach to Climate-Related Financial Disclosure
DFS Seeks Input on the Proposed Guidance During 90-Day Comment Period
March 25, 2021 — Superintendent of Financial Services Linda A. Lacewell today announced that the New York State Department of Financial Services (DFS) has issued proposed detailed guidance for New York-regulated domestic insurers setting out DFS’s expectations related to managing the financial risks from climate change.
The proposed guidance builds on the circular letter issued by DFS on September 22, 2020, which outlined its expectations that all New York insurers start integrating the consideration of the financial risks from climate change into their governance frameworks, risk management processes, and business strategies, and developing their approach to climate-related financial disclosure. DFS is seeking the interested parties’ input on the guidance, which will be finalized following a 90-day public comment period.
Department of Financial Services Issues Cybersecurity Alert to Regulated Entities Concerning Microsoft Exchange Email Servers
The New York State Department of Financial Services (“DFS”) today issued the following industry letter to all of its regulated entities following the recent discovery of cybersecurity vulnerabilities in Microsoft Exchange Server.
March 09, 2021 —In recent days, thousands of organizations were compromised via zero-day vulnerabilities in Microsoft Exchange Server. On March 2, 2021, Microsoft made patches available for these vulnerabilities but many organizations were compromised either before the patches were available or before the patches were applied.
The Department of Financial Services (“DFS”) urges all regulated entities with vulnerable Microsoft Exchange services to act immediately. Regulated entities should immediately patch or disconnect vulnerable servers, and use the tools provided by Microsoft to identify and remediate any compromise exploiting these zero-day vulnerabilities. The U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (“CISA”) has also released a current activity update outlining how to search for a compromise.
Public Deposits Granted to New York Credit Unions
In December, Gov. Andrew Cuomo signed legislation permitting New York credit unions to accept public deposits. Under the new law, credit unions can participate in the state’s Banking Development District Program.
According to the New York Credit Union Association, the BDD Program was created in 1997 to encourage financial institutions to establish branches in economically distressed communities throughout New York where there is a demonstrated need for banking services. Institutions that are approved for a BDD designation are eligible to receive up to $10 million in subsidized public deposits and other benefits, including below-market-rate deposits from New York state. These deposits are intended to lower the financial risk that the branch may incur when opening in an underserved community, usually comprised of low- and moderate-income households.
Marijuana Banking Rules Issued
July 10, 2018 — Recently, under the direction of New York Governor Andrew Cuomo, the New York Department of Financial Services (DFS) issued guidance encouraging New York State chartered banks and credit unions to consider establishing banking relationships with New York medical marijuana-related businesses that are in full compliance with state laws and regulations.
DFS noted that it will not impose any regulatory action on any state-chartered banks or credit unions for establishing a banking relationship with a medical marijuana-related business if the financial institutions comply with the requirements of:
- The 2014 Financial Crimes Enforcement Network guidance;
- The guidance and priorities set forth in the Department of Justice’s 2013 memorandum from Deputy Attorney General James M. Cole; and
- Is subject to the institution’s own evaluation of the risks associated with offering products and services and its ability and systems to effectively manage those risks – as all DFS-regulated institutions do with regard to all their banking relationships.
NYCUA’s resource page gives full comparison of state v. fed charter
Jan. 8, 2018 — Looking for a comprehensive examination of the state charter versus the federal charter? Look no further than the New York Credit Union Association’s (NYCUA) “State Charter Resource Center” on the web, which includes a 30-slide presentation that looks at topics including taxation, field of membership, lending, trust powers, low-income designation and more. The website also includes a cost comparison of the federal versus the state charter, a rundown of the state charter conversion process (and checklist), and sample bylaws. The resources were developed by the NYCUA, it says, to “assist credit unions to better understand the state charter and how it compares to the federal charter.”
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