Dec. 23, ’16 NASCUS Report

NASCUS delivers results for the states in 2016

It is hard to believe that another year has come and gone – time certainly flies by when there’s plenty to do. In our first issue of 2017, we’ll give you an idea of where we see things going in the New Year; for now, here’s a look back on what we think are crucial accomplishments for the year now drawing to a close:

  • Secured reduction in OTR (first time since 2013): For more than 20 years, NASCUS has advocated reform of the overhead transfer rate. As a result of this diligent approach, NCUA in 2016 accepted comments on the rate’s methodology, and in November reduced the rate from 73.1% to 67.7% — the first reduction since 2013 –— with a promise of a future fair, transparent and understandable methodology, hopefully this spring.
  • Marshaled voice of CU system for changes in OTR methodology: When NCUA opened a comment period of 90 days on the OTR methodology in January, NASCUS urged the state credit union system to weigh in – and it did. All of the comments received – including by the national trade associations representing nearly all credit unions nationwide – had one thing in common: changes must be made to the OTR methodology.
  • Developed compendium of NCUA rules affecting state charters: For years, state regulators and credit unions have had to struggle with determining the impact of federal rules in their states, with specific references to states sprinkled throughout the regulations. The Part 741 Compendium developed and posted on our website references all of the rules affecting state charters in one, convenient place — and is updated with the latest changes (for members only).
  • Published 2016 state-by-state profile of regulatory regimes: A complete overview in 2016 of the powers, practices, rules, laws, field of membership requirements, funding, branching and chartering – and more – is contained in this on-line database developed by NASCUS, which is made up of survey responses from the state supervisory authorities (for members only).
  • Analyzed and weighed in on crucial issues: NASCUS regularly conducted expert analysis of regulatory actions, communiques and rulings focused on state-chartered credit unions, publishing 45 summaries of proposed and final rules, guidance, Letters to Credit Unions, Regulatory Alerts, legal opinion letters and Supervisory Letters issued by such entities as NCUA, the Consumer Financial Protection Bureau (CFPB), the Financial Crimes Enforcement Network (FinCEN) and more.
  • Advocated for states in federal legislation: We urged Congress to take action – or supported the actions taken – on various pieces of pending legislation, including reforming the NCUA Board (contained in the Financial CHOICE Act, H.R. 5983), and H.R. 5869, requiring transparency for the OTR.
  • Directed a vigorous education program focused on key state issues: We presented or co-hosted more than 20 conferences and schools throughout the year in 15 different states, often in conjunction with state regulators and state associations and leagues all across the country. Our topics included member business lending, the “current expected credit loss” (CECL) accounting standard, bank secrecy act requirements, cybersecurity, marijuana business banking – and much more. Together with our signature events of the annual NASCUS State System Summit, the Cybersecurity Symposium and the Bank Secrecy Act (BSA) Conference – as well as our examiner training program and directors’ colleges  – NASCUS trained and informed more than 1,000 practitioners and regulators within the state system.
  • Increased the number of NASCUS-accredited state regulatory agencies: Nationwide, about 86 percent of state chartered credit union assets are supervised by the 27 state agencies that have now earned NASCUS accreditation, which assures quality standards of state credit union examination and supervision, and applies standards of performance to each state’s regulatory program.

Throughout the year, NASCUS also ensured the voice of the state credit union system was heard by NCUA, other federal agencies whose actions affect the system, and the financial community at large in Washington — through our comment letters, briefings, testimony, press releases and interviews with the press, our weekly NASCUS Report, op-eds, videos and other channels. It’s been a busy year for the state credit union system – setting the stage for what will likely be an even more active 2017 and beyond. Thanks for your support!


Rep. Rick Mulvaney (R-S.C.), author of H.R. 5869, legislation aimed at increasing transparency of the Overhead Transfer Rate (OTR), has been named by President-elect Donald Trump the director of the Office of Management and Budget (OMB) when the new administration takes office next month. The agency is the executive branch organization which administers the federal budget and oversees the performance of federal agencies; the position of director is subject to Senate approval. H.R. 5869 – which Mulvaney co-sponsored with Rep. Denny Heck (D-Wash.) — would require that NCUA publish a detailed analysis of how its expenses are assigned between prudential activities and insurance-related activities, and the extent to which those expenses are paid from FCU operating fees, or transferred from the National Credit Union Share Insurance Fund via the OTR. A provision mirroring the Mulvaney-Heck bill is also contained in the Financial CHOICE Act (H.R. 5893), passed by the House Financial Services Committee this fall, and authored by Chairman Jeb Hensarling, R-Texas.

NASCUS letter to Mulvaney and Rep. Denny Heck (D-Wash.) in support of H.R. 5869


Only four federally insured, state chartered credit unions are among the 24 that were assessed civil money penalties by NCUA for filing their call reports late in the second quarter, the agency reported this week. Total fines assessed to the four state credit unions were $1,045 (out of a total of $9,364 assessed to all 24 credit unions). According to NCUA, penalty assessments are primarily based on three factors: the credit union’s asset size, its recent call report filing history and the length of the filing delay. In a release, the NCUA stated that it has informed the credit unions of the penalties they face and advised them they could reduce their penalties by signing a consent agreement. The agency also said it would initiate administrative hearings against credit unions that did not consent. The state credit unions assessed penalties are one each in Michigan, Missouri, North Carolina and Texas. NASCUS President and CEO Lucy Ito said the relatively low number of state credit unions filing late reports reflects a joint effort, over the last few years, by NCUA and state regulators to minimize late call reports and fines assessed on state credit unions.

NCUA release: 24 credit unions assessed penalties for late Call Reports


Redlining, mortgage and student loan servicing, and small business lending are among the key areas where CFPB will focus in 2017, according to a recent posting by the bureau. In its “Fair Lending Priorities in the New Year,” the bureau stated that the lending areas it will be focusing on are part of its overall effort to identify new and emerging fair lending risks, and that it will be monitoring institutions for compliance. In increasing its focus in 2017 to these areas, the bureau stated, it is shifting from such areas as auto lending and the credit card market. CFPB stated it is making the shift to fair lending topics because the issues “also present substantial risk of credit discrimination for consumers.” Specifically, regarding its three areas of focus, CFPB stated:

  • On redlining. The bureau will continue to evaluate whether lenders have intentionally avoided lending in minority neighborhoods;
  • On mortgage and student loan servicing: CFPB stated it will determine whether some borrowers who are behind on their mortgage or student loan payments may have more difficulty working out a new solution with the servicer because of their race or ethnicity;
  • On small business lending: Since Congress expressed concern that women-owned and minority-owned businesses may experience discrimination when they apply for credit, Congress has required the bureau to take steps to ensure their fair access to credit.

CFPB posting: Fair lending priorities in the New Year

BRIEFLY: eRegulations (from CFPB); Consumer trends tracker; Cybersecurity ’17 registration open; Last NASCUS Report of 2016

The CFPB has introduced “eRegulations,” a web-based “open-source” platform that the bureau asserts “makes regulations easier to find, read and navigate.” According to the agency, the platform “clarifies regulations by bringing official interpretations, regulatory history and other information to the forefront.” The platform now includes Regulations B, C, D, E, J, K, L, M, X, Z and DD … Also from the CFPB: Consumer Credit Trends, a web-based tool to help the public monitor developments in consumer lending and forecast potential future risks, was unveiled late last week by the CFPB. The beta version of the tool covers the mortgage, credit card, auto loan, and student loan markets, and the bureau stated it illustrates: a sharp uptick in mortgage originations from August to October compared to last year; growth in credit card lending to lower-income consumers: fewer auto loans to borrowers with lower credit scores, and; a slight slowdown of new student loans … Registration for the 2017 Cybersecurity Symposium, June 5-6 in San Diego, is now open; see the link below for program details and hotel reservations … This is the final issue of NASCUS Reportfor 2016; we’ll publish again on Jan. 6. Until then: Happy holidays to you and yours!

eRegulations: The CFPB tool to ‘read regulations’

Consumer credit trends web tracking tool

2017 Cybersecurity Symposium registration (June 5-6, San Diego)

Fall calendar '16


Information Contact:
Patrick Keefe, NASCUS Communications, [email protected] or (703) 528-5974

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