Feb. 1, 2019 NASCUS Report

A big first: world’s largest FCU joins
with support for dual-charter system

Support for the dual-chartering system received a big shot in the arm this week as NASCUS welcomed Navy Federal Credit Union as a member of the association, becoming the first federal credit union to do so.

Navy Federal, based in Vienna, Va., serves all Department of Defense and Coast Guard active duty, veterans, civilian and contractor personnel and their families, with about 8 million members and more than $97 billion in assets (making it the largest credit union in the nation – and the world).

“Because of Navy Federal’s desire to strengthen all credit unions, both federal and state, it is exactly the kind of organization we’re excited to have as a member of NASCUS,” said association President and CEO Lucy Ito. “Since its inception in 1933, Navy Federal has been committed to providing safe and sound financial services to its unique field of membership and to being a strong supporter of the credit union movement.”

Navy Federal President and CEO Mary McDuffie said her institution is pleased to join with NASCUS members and the state system in advocating for policies and regulations that will improve the experience for credit union members. “We support NASCUS’ work to ensure a strong dual-charter system and its work to positively impact the important industry discussions that are already taking place,” she said.

NASCUS press release: NASCUS welcomes Navy Federal as its first federal credit union member


Ensuring the continued implementation of last year’s financial regulatory reform law and continued examination of whether rules should be tailored to help financial firms (including credit unions) serve their local communities are among the objectives outlined in a Senate Banking Committee agenda released this week by the panel’s chairman, Sen. Mike Crapo, R-Idaho.

In conducting “ongoing oversight,” the agenda notes the committee will continue to monitor operations of the federal agencies within its jurisdiction – NCUA and the federal banking agencies among them – and examine whether regulators are properly implementing recently enacted laws such as the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155, enacted into law last spring). “In particular, the Committee will continue to examine whether the regulations, guidance and supervisory expectations are consistent with the intent of the sponsors of EGRRCPA,” the agenda states. “The agencies have proposed other rules to right-size regulations, and the Committee will closely monitor progress to final rules.”

EGRRCPA, among other things, effectively excluded all credit union loans made on any 1-to-4-unit family dwelling from a federally insured credit union’s member business loan (MBL) cap (NCUA made the change to its rules June 1 to reflect changes in the law

The committee will also “continue to examine whether regulation should be tailored for financial companies to ensure they can adequately deliver credit to local communities,” the agenda states. “Similarly, the Committee will conduct oversight when financial companies use their market power to manage social policy by withholding access to credit or services to customers and industries they disfavor.”

Crapo Outlines Banking Committee Agenda for 116th Congress


Bipartisan legislation designed to strengthen efforts to deter abuse of financial technology passed the House by voice vote this week and heads to the Senate for consideration. H.R. 56, the Financial Technology Protection Act, re-emerged after being considered in the previous Congress, where last September it was also adopted on voice vote; it was not taken up in the Senate. The legislation would, among other things, create the “Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing” to conduct independent research on terrorist and illicit use of new financial technologies, including digital currencies; and develop legislative and regulatory proposals to improve counter-terrorist and counter-illicit financing efforts. It would report yearly to Congress on its proposals. The task force would include the Treasury secretary and federal law enforcement and intelligence community leaders. The Treasury secretary would also name to the panel six members to represent the private sector, including the banking industry, nonprofit groups and think tanks. At least two of these private-sector posts would be reserved for individuals with experience in the fintech industry.

H.R. 56: the Financial Technology Protection Act


A final rule requiring financial institutions to accept flood insurance policies that meet the statutory definition of “private flood insurance” – and to allow financial institutions to exercise their own discretion in accepting other plans, including those by mutual aid societies – was on the cusp this week of being adopted by all federal financial regulators (along with the Farm Credit Administration (FCA)). The FDIC and OCC have adopted the rule; action by NCUA and the Federal Reserve was pending as of today.

Action on the new rule was first reported by the Wall Street Journal Monday.

The rule represents amendments to current regulations of the agencies which implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. The rule is expected to be released jointly by the regulators once the Fed and NCUA give final approval.

“Specifically, the final rule requires regulated lending institutions to accept policies that meet the statutory definition of ‘private flood insurance’ in the Biggert- Waters Act,” the summary of the final rule states. The summary also notes that the final rule “permits regulated lending institutions to exercise their discretion to accept flood insurance policies issued by private insurers and plans providing flood coverage issued by mutual aid societies that do not meet the statutory definition of ‘private flood insurance,’ subject to certain restrictions.”

The final rule takes effect July 1; it affects loans in areas having special flood hazards.

In October 2016, the five agencies issued a joint notice of proposed rulemaking to implement provisions of the Biggert-Waters Act that required regulated lending institutions to accept certain private flood insurance policies in addition to policies made available by the Federal Emergency Management Agency (FEMA). The rule unveiled this week follows up on that proposal.

Rule text: Loans in Areas Having Special Flood Hazards

Wall Street Journal: Private Flood Insurance Gets Boost From Regulators (subscription required)


A reference tool, in the form of a very long chart, for data points required to be collected, recorded, and reported under Regulation C (Home Mortgage Disclosure Act (HMDA)) was published Thursday by the consumer financial protection agency.

The 38-page chart, the Consumer Financial Protection Bureau (CFPB) noted, reflects amendments made to HMDA Rules that were issued Oct.  15, 2015, and Aug. 24, 2017. It also reflects changes made through last year’s regulatory relief legislation (specifically, section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155)) as implemented and clarified by the interpretive and procedural rule issued on Aug. 31, 2018 (the 2018 HMDA Rule).

The chart also incorporates – for ease of reference, the bureau said — information found in the 2019 Filing Instructions Guide (Section 4.2.2) and provides when to report “not applicable” or “exempt,” including the codes used for reporting those conditions from section 4 of the 2019 Filing Instructions Guide.

However, the chart does not provide data fields or enumerations used in preparing the HMDA loan/application register (LAR), CFPB said.

Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart for HMDA Data Collected in 2019

More information on preparing the HMDA LAR

NASCUS CFPB news, updates


“Trouble during payment process” and “struggling to pay mortgage” were the leading complaints consumers had about mortgages between November 2016 and October 2018, CFPB said in a “snapshot” this week – the first such report on the year.

In its “Complaint snapshot: Mortgages” the bureau said complaints about trouble in payment processes made up 42% of the complaints it received, while the “struggling to pay mortgage” made up 36%. Overall, the agency said, about 11% of the complaints it received over 24-month period were about mortgages.

However, CFPB said, mortgage complaints began trending downward over the last few months of the two-year period. There were 15% fewer mortgage complaints from August 2018 to October 2018 compared to August 2017 to October 2017, the agency said. In October alone, CFPB said, compared to the monthly average of the 24-month period, mortgage complaints were down 18%.

In other complaints received by the bureau (and outlined in the report):

  • A 26% increase in the number of complaints about prepaid cards, the greatest increase among several products. The three-month average was 180 complaints in the period August-October 2017, and 228 complaints in August-October 2018.
  • A 25% decrease in complaints about student loans, the greatest decline reported by the bureau. The monthly average of complaints in this area was 1,086 from August-October 2017, and 818 from August-October 2018, it said. “This year-over-year decline is likely because student loan complaint volume was elevated in 2017 following the Bureau’s enforcement action against a student loan servicer,” the bureau wrote in its report.

NASCUS catalogues and posts all “complaint snapshots” on its website, for easy access for the state credit union system. To see the latest updates, see our CFPB pages.

NASCUS CFPB news, updates


The latest list of consumer reporting companies was released by the CFPB Thursday, which includes the three nationwide credit reporting companies as well as other companies that focus on certain market areas and consumer segments. The 2019 list includes 51 companies in 11 areas: nationwide consumer reporting companies, employment screening, tenant screening, check and bank screening, personal property insurance, medical, low-income and subprime, supplementary reports (which supplements reports from other companies), utilities, retail, and “gaming.” The listing notes that the companies use the information in the reports they develop to inform decisions about providing consumers with credit, employment, residential rental housing, insurance, and in other decision-making situations.

Know your data: Our latest list of consumer reporting companies


Credit union service organizations (CUSOs) have 60 days — from today to March 31 — to complete their annual, required reaffirmations with the CUSO Registry maintained by the NCUA. Launched in 2016, the CUSO Registry is part of the CUSO rule approved by the NCUA Board in November 2013. CUSOs are required to report financial and regulatory information to NCUA on an annual basis through the registry. A searchable version of the registry is available online.

Requirements for CUSO registration were detailed for credit unions in a 2016 NCUA Letter to Credit Unions. The letter notes that federally insured credit unions are required to enter into written agreements with any CUSOs they make loans to or invest in.

NCUA CUSO Registry (login required)

NCUA Letter 16-CU-02

NASCUS summary: NCUA LTCU 16-CU-02 (members only)

TRANSITION: Retirement in WA

Long-time Washington state regulator Gloria Papiez has announced plans to retire from her post as director of the state’s Department of Financial Institutions (DFI) after 35 years of state service overall, and two decades at the DFI (including as director since 2017). She is also a former assistant director for administration with the Washington Utilities and Transportation Commission, and assistant director for audit with State Auditor’s Office. Gov. Jay Inslee (D) praised Papiez’s tenure at the agency, noting “she played a pivotal role in building DFI into one of the top financial regulatory agencies in the nation, known for innovative regulation, consumer protection and an ongoing commitment to financial education, outreach and support.” A search for her successor is underway, but If one is not named by March 31, the governor’s office said he will name an acting/interim director.

BRIEFLY: Members of key committee on Leg/Reg named; VP candidates sought

NASCUS has named 55 regulators and state credit union system leaders to its 2019 Legislative and Regulatory Affairs Committee, the association’s largest advisory group, which works to advance legislative and regulatory solutions that preserve a viable and attractive state credit union system. The 23 regulators and 32 state credit union (and state league/association) representatives on the committee help develop comment letters, recommend policy positions, and guide legislative activity for NASCUS … Meanwhile, NASCUS continues to look for candidates for its open position of the newly created role of vice president of state programs and supervisory policy at the association. Candidates should have bank or credit union examination experience. For details, and to apply, see the link below.

NASCUS Legislative and Regulatory Affairs Committee

NASCUS career opportunity: Vice President of State Programs & Supervisory Policy

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