MBL rule adopted; ‘proof will be in the pudding’
Although a new member business lending rule was adopted unanimously Thursday by the NCUA Board, NASCUS President and CEO Lucy Ito points out that what remains to be seen about the regulation is whether the spirit of the discussion by board members regarding state MBL rules ultimately is implemented by the agency. In adopting the regulation, the board included a key NASCUS recommendation: That the rule delegate the power to state supervisory authorities to administer a state MBL rule that is at least as stringent as NCUA’s rule. But Ito noted that, while the rule permits state innovation in adopting their own business lending rules, “the proof is in the pudding.” “Our concern is that the ultimate interpretation of the rule stays consistent with the intention expressed at the table Thursday during the NCUA Board’s discussion,” she said.
The impact of the new rule on state chartered credit unions emerged as a major topic of discussion during the board meeting. For example, NCUA Director of Examination and Supervision Larry Fazio said that if states with MBL rules, which meet the core criteria of the federal MBL rule, want to include a “particularly novel approach” outside of federal regulation, NCUA could entertain approving that approach, if it applies for all federally insured credit unions. Further, all three NCUA Board Members cited the NASCUS comment letter about the proposed MBL rule during their remarks. (Note: The final rule includes two key provisions recommended by NASCUS in its Aug. 31 letter: That delegating SSAs authority to administer their own MBL rules, and; that boards of credit unions offering business loans be required to approve a comprehensive, written commercial loan policy.) The 137-page final rule, which drew more than 3,100 comment letters (many from commercial bankers in opposition), takes effect 60 days after publication in the Federal Register.
Incorporating in one place all federal share insurance rules – as NASCUS has urged –would be one way that NCUA could respond to the call of nine senators who last week urged that agency and other federal financial institution regulators to take action under the Economic Growth and Regulatory Paperwork Reductions Act (EGRPRA) to ease credit unions’ and community banks’ regulatory burden. In a Feb. 12 letter, Senate Banking Committee members Mike Crapo (R-Idaho), Dean Heller (R-Nev.), Jerry Moran (R-Kan.), Tom Cotton (R-Ark.), Michael Rounds (R-S.D.), Pat Toomey (R-Pa.), Ben Sasse, (R-Neb.), David Vitter, (R-La.), and Mark Kirk (R-Ill.) called on the leaders of NCUA, Federal Reserve, FDIC and the OCC to update them on the status of the EGRPRA-mandated interagency review of regulations to eliminate outdated, unnecessary or unduly burdensome rules. In its most recent comment letter on EGRPRA (for round three, comments for which were due last September), NASCUS pointed out that several of the rules covered by that notice for comment applied to federally insured state-chartered credit unions (FISCUs) by way of incorporation by reference in Part 741, Requirements for Insurance. NASCUS is currently developing comments for a March 22 deadline on EGRPRA round four, which covers 15 subjects in the two categories of “rules of procedure” and “safety and soundness.” (And, by the way, there are at least five other comment periods on other issues pending right now; see the link below to our “Regulatory Resources” page.)
Six things regulators and credit unions can do right now to improve their information security is one of the featured sessions at the NASCUS/CUNA Cybersecurity Symposium, Aug. 1-2 in Chicago. Registration is now open for the two-day event, which includes more than 13 hours of educational presentations, discussions, demonstrations and panel/group discussions led by cybersecurity experts from across the nation. In particular, the “six things” session will offer techniques and tips to fine-tune credit union information security programs, and is built for both credit union practitioners and examiners alike. Other top sessions at the Cybersecurity Symposium include: Understanding the laws protecting members’ information; choosing the right cybersecurity risk assessment tool; cybersecurity, anti-money laundering, and identity theft red flags, and; rightsizing the cybersecurity budget. Leading the program again this year is Tom Schauer of CliftonLarsonAllen in Seattle (formerly CEO of TrustCC).
With nearly 5,000 credit union advocates in Washington next week for the CUNA Governmental Affairs Conference (GAC), NASCUS will speaking out on behalf of state credit union regulators and the state system on the Hill, in the halls of regulators and in conference with credit union groups from around the nation. And all of that will be capped off with a meeting of the NASCUS joint leadership late in the week, including both state regulators and credit unions. On the Hill, NASCUS leaders will be meeting with supporters of the NCUA Budget Transparency Act (H.R. 2287) and other legislation. In the regulatory realm, NASCUS leadership will sit down with NCUA leaders, CFPB representatives and more. Conferring with credit union groups will include sit-downs with CUNA Mutual, NACUSO, NAFCU, PSCU, World Council and others. And, NASCUS Past Chairman and Washington Division of Credit Unions Director Linda K. Jekel will participate in a GAC breakout session titled “Regulation vs. ‘Guidance’/’Best Practices:’ Implications for Credit Union Examinations and Compliance Efforts.”
Our latest video – featuring Lucy Ito urging viewers to comment on the overhead transfer rate (OTR) methodology – has drawn well more than 100 views since it debuted last week. Our other featured video about the OTR – OTR in Brief, published last summer – benefitted from the newest video, also drawing more than 100 views just last week (since it debuted, it has been viewed more than 1,300 times). Haven’t seen either? See the links below … and start thinking about your comments! … The 2016 NASCUS National Meeting (regulators only) March 14-15 in Washington will have representation from at least 34 states … NASCUS is attending the National Mortgage Licensing System (NMLS) conference this week in Phoenix …
Patrick Keefe, NASCUS Communications, firstname.lastname@example.org or (703) 528-5974
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