When the Act Becomes Law, Work Really Begins

A special message from Mary Martha Fortney, President and CEO,
September 17, 2010

Now that the Dodd-Frank Wall Street Reform and Consumer Protection Act is law, regulators have an enormous job in making the legislation into regulation.

The law requires 243 new rules, 67 one-time reports and 22 periodic reports. The bill also establishes a new Consumer Financial Protection Bureau (CFPB), housed at the Federal Reserve. The CFPB will examine institutions with more than $10 billion in assets.

At its September 16 board meeting, the National Credit Union Administration (NCUA) gave a briefing on the implementation of the Dodd-Frank Act. While the NCUA will retain almost all of its examination authority over credit unions, the CFPB has rule writing authority for consumer protection regulations and will collect data from federal agencies for its Office of Financial Research. This office will be the main center for national financial data and will require certain information from all federal agencies. NCUA staff at the meeting stated that they will have to tweak the information gathering mechanisms to eventually fit the standards set by the agency.

Further, regarding examinations, the CFPB requires prudential regulators to furnish examination reports for institutions under $10 billion in assets. The CFPB can also join the prudential regulator on consumer protection examinations if it wishes, or suggest enforcement actions it sees necessary. This new relationship between the CFPB and other state and federal regulators will require considerable coordination.

From the state credit union regulatory perspective, NASCUS will ensure that state regulators are consulted throughout this process. There are other regulations that will affect credit unions, namely interchange debit card fee regulations and disclosure of certain executive compensation arrangements. Interchange fee regulations and rules requiring the disclosure of all incentive based compensation arrangements for financial institutions over $1 billion in assets are both due by April 2011. There will also be changes to remittances transfers, due by January 2012, among other provisions.

While the bill did not disadvantage the state charter or affect state regulators’ authority, NASCUS will continue to be involved as the regulations are developed, as there are many aspects impacting our members. Further, from a systemic perspective, we will also continue to encourage Congress to defend against preemption and to make certain that state credit unions remain primarily regulated by those who know their communities and operations best – state regulators.

NASCUS will provide reports on implementation of the Dodd-Frank Act on its website as developments occur.