World Council of Credit Unions Tuesday issued “What Credit Unions Should Know About Sustainable Finance”, a guide to help credit unions understand many of the international standards and emerging regulatory frameworks surrounding climate-related and sustainable finance issues.
World Council has been working on this issue for many years, so that international standard setters tailor regulations to accommodate the credit union cooperative model. Further, World Council has been working to position credit unions as a differentiator on ESG-related issues, while ensuring that the benefits of the member-owned, not-for-profit model are contemplated.
“The past few years have dictated the need for flexibility in all areas of our lives, and the need to adapt holds equally true for the regulatory landscape. Credit unions must be ready to undertake new sustainable finance requirements, while finding new and innovative ways to support climate resilience,” said Panya Monford, World Council Assistant General Counsel of International Advocacy.
Specifically, the publication covers:
- How global frameworks are supporting climate change and sustainability. Global authorities set global standards and thresholds by which all supplementary standard setters and regulators should abide.
- How global and international standard setters are addressing climate change through guidance and regulation. While global frameworks are concerned with climate change en bloc, global standard setters are drafting regulatory guidance and regulation that not only supports climate-related matters, but issues that affect the environment, as well as investors who desire to be informed about the environmental risks associated with their investments.
- The need for global standard setters to require regulatory authorities at the national level to adhere to proportional regulation. This will ensure that small financial institutions are not overregulated by rules that are tailored for large, systemically important banks. Generally, standard setting bodies construct the rules, while regulatory authorities (typically at the national or jurisdictional level) enforce them.
- The commitment to sustainable finance and climate-related issues by the Basel Committee, International Accounting Standards Board, G20, European Commission, Financial Stability Board and European Securities Market Authority. While these standard setters are not the only authorities involved in structuring climate-related, sustainable finance rules, they are the leading authorities shaping sustainable finance regulation.
As implementation of these final and in-progress standards are adopted at the national level, this will be an evolving and emerging area where it is critical to ensure that the credit union voice is heard.
CFPB Enhances Tool to Promote Competition and Comparison Shopping in Credit Card Market
Today, the Consumer Financial Protection Bureau (CFPB) launched launched an improved survey of credit card issuers that can help consumers and families compare interest rates and other features when shopping for a new credit card. Americans pay $120 billion in credit card interest and fees each year, which contributes to the almost trillion dollars in nationwide household credit card debt. In the current high-rate environment, it is important for Americans to be able to be able to accurately compare products. Upgrades to the CFPB’s terms of credit card plans survey are designed to increase price competition in the credit card market by allowing people to comparison shop for the best prices and products. The survey will also help smaller credit card issuers, who often offer the lowest rates, reach comparison shoppers. Read more
2022 HMDA Data on Mortgage Lending Now Available
The Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) data for 2022 are now available on the Federal Financial Institutions Examination Council’s (FFIEC) HMDA Platform for approximately 4,394 HMDA filers. The published data contain loan-level information filed by financial institutions and modified to protect consumer privacy.
To increase public accessibility, the annual loan-level LAR data for each HMDA filer are now available online. Previously, users could obtain LAR data only by making requests to specific institutions for their annual data. To allow for easier public access to all LAR data, the Consumer Financial Protection Bureau’s (CFPB) 2015 HMDA rule made the data for each HMDA filer available electronically on the FFIEC’s HMDA Platform. This year, in addition to institution-specific modified LAR files, users can download one combined file that contains all institutions’ modified LAR data. Read more
Join us Monday, March 27, 2023, 1:00 – 3:30 pm EST
NASCUS is bringing back its “New Commissioner Orientation.” This 2.5-hour virtual event is designed to introduce new state agency heads and/or agency senior staff to NASCUS and our resources available to support your state agency’s mission. We will also provide a brief history of the credit union system and NASCUS’s beginnings, give an update on the current state of the credit union system, and discuss the hot topics in the sector today.
Whether you are new to your agency or have been involved with NASCUS for years but want a refresher, you are welcome to participate. Any senior agency staff are welcome are welcome to join us as well.
RSVP or Questions: To participate in the meeting, please RSVP to [email protected].
Location: A NASCUS Teams Link will be sent out to participants in advance of the virtual meeting.
Cost: There is NO cost for participating in this event.
CFPB Heightens Scrutiny of Unlawful Collection of Payments on Discharged Student Loans
The Consumer Financial Protection Bureau (CFPB) released a bulletin warning servicers of their obligation to halt unlawful conduct with respect to private student loans that have been discharged by bankruptcy courts. The bulletin details recent findings by CFPB examiners that certain loan servicers were illegally returning loans to collections after bankruptcy courts had discharged the loans. The CFPB is directing these servicers to return illegally collected payments to affected consumers and immediately cease these unlawful collection tactics. The bulletin also makes clear that the CFPB will continue to examine student loan servicers’ handling of these loans to detect whether these illegal practices persist at other companies. Read more
PUBLISHED MAR 15, 2023
The Consumer Financial Protection Bureau (CFPB) issued the 2022 Financial Literacy Annual Report to Congress.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) mandates that the Director of the Consumer Financial Protection Bureau (CFPB) submit to Congress an annual report on the CFPB’s financial literacy activities and strategy to improve the financial literacy of consumers.1 We are pleased to submit this 10th Financial Literacy Annual Report. The report covers fiscal year 2022 (FY22), the period from October 2021 through September 2022. Read more
PUBLISHED MAR 15, 2023
CFPB Releases 2023 HMDA Transactional and Institutional Coverage Charts
The CFPB released the 2023 HMDA Transactional and Institutional Coverage Charts. These charts update the closed-end threshold pursuant to the United States District Court for the District of Columbia September 23, 2022, order in NCRC et al. v. CFPB.
You can access the 2023 HMDA Transactional and Institutional Coverage Charts here: www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/hmda-reporting-requirements/.
Sen. Elizabeth Warren, D-MA, on Tuesday proposed a legislative route to do the same, but Republicans and even some Democrats are waiting on the Fed’s review of recent bank failures.
The Federal Reserve is reviewing the capital and liquidity requirements it imposes on banks with between $100 billion and $250 billion in assets, The Wall Street Journal and the Financial Times reported Tuesday, citing a person familiar with the matter.
Such an adjustment would have put Silicon Valley Bank, which counted $209 billion in assets before it failed Friday, and Signature Bank, which had $110 billion, under potentially stricter guidelines.
The Fed in October proposed requiring banks with between $250 billion and $700 billion in assets to carry long-term debt that would be converted into equity to recapitalize the bank in times of extreme stress. That would put the burden of losses on investors rather than taxpayers in a bailout situation.
Additionally, Michael Barr, the Fed’s vice chair for supervision, warned in December that the central bank would complete a “holistic” review of the framework behind stress tests that set capital requirements, but he didn’t give a time frame then.
Last week’s bank failures may well hasten that timeline.
Proposed changes may require more banks to report unrealized gains and losses on some securities as part of their capital, according to The Wall Street Journal. Silicon Valley Bank, for example, concentrated its balance sheet in long-term assets, leaving it more susceptible to failure if customers withdrew their funds immediately.
The rule-change process for the Fed’s October proposal on $250 billion-to-$700 billion-asset banks allows for public comment and takes months. The central bank, however, can choose, under Title 12 of the U.S. Code, to issue an order placing new requirements such as resolution plans, counterparty credit limits or annual stress tests, on banks with more than $100 billion in assets to protect financial stability, American Banker reported.
“That’s something that the Fed could do tomorrow,” Peter Conti-Brown, a professor at the University of Pennsylvania’s Wharton School of Business, told the publication.
Some lawmakers are blaming event bank failures, in part, on a 2018 rollback of parts of the Dodd-Frank Act.
S. 2155, sponsored by Sen. Mike Crapo, R-ID, raised — from $50 billion in assets to $200 billion — the threshold of banks subject to the Fed’s toughest supervisory measures, including stress tests and capital and liquidity requirements.
Sen. Elizabeth Warren, D-MA, on Tuesday proposed a bill to repeal S. 2155.
Courtesy of Dan Ennis, BankingDive
The NCUA held its third open meeting of 2023. Chairman Todd Harper kicked off the meeting further, reinforcing his statement from March 13, that the credit union system remains well-capitalized and on a solid foundation. He also reiterated the many liquidity sources available to credit unions. Vice Chair Kyle Hauptman and Board member Rodney Hood echoed Chairman Harper’s comments.
The chairman’s complete statement from Thursday’s board meeting can be found here.
A single agenda item was considered, a final rule on subordinated debt, which the board voted to approve. The final rule makes two changes to the current subordinated debt rule that was finalized in 2020. Specifically, the rule replaces the 20-year maximum maturity of Subordinated Debt Notes and Grandfathered Secondary Capital (GSC) to the later of 30 years from the date of issuance or January 1, 2052. Second, the final rule extends the regulatory capital treatment of any credit union seeking to issue notes with maturities exceeding 20 years and must demonstrate how the instrument would continue to be considered “debt.”
The final rule also includes four technical amendments from the current rule, which include:
- Amending the definition of “Qualified Counsel” to clarify that such person(s) is not required to be licensed to practice law in every jurisdiction that may relate to an issuance
- Amending two sections to remove the “statement of cash flow” from the Pro Forma Financial Statements requirement and replace it with a requirement for “cash flow projections”
- Revising the section of the current rule on filing requirements and inspection of documents
- Removing a parenthetical reference related to GSC that no longer counts as Regulatory Capital
The final rule will become effective 30 days after publication in the Federal Register.
Courtesy of Sarah Stevenson, Vice President, Regulatory Affairs, NASCUS
LIVE IN-PERSON, SCHOOL & CONFERENCE
Event Date: June 06 – June 08, 2023
Location: Omni Royal Orleans Hotel, New Orleans, LA
Stand up to credit union cyber threats
Learn about emerging cybersecurity trends, threats, and hot topics through technical and operational cybersecurity training at Cybersecurity Conference with NASCUS/CUNA this June. Attendees will choose breakout sessions based on the track that best fits their educational interests and credit union needs. Each track has a focus based on the key pillars of cybersecurity: People, Processes, Technology.
As fraud and other cybercrimes continue to evolve, the task of protecting your credit union is becoming more complex. Join CUNA and NASCUS to:
- Explore a variety of popular and important cybersecurity topics.
- Learn the latest strategies and tactics on how to keep your data safe.
- Learn ways to better prevent, detect and respond to today’s security challenges.
- Gain access to technical and operational cybersecurity training
NASCUS members receive CUNA member pricing. To receive this pricing, or for quicker registration, email [email protected] or call 800-356-9655.
Request to be notified when more details are available.
Who should attend?
This conference has been created with I.T. and compliance professionals, C-Suite, risk managers and examiners in mind as well as anyone else in the credit union who would benefit from cybersecurity training.
LIVE IN-PERSON, SCHOOL & CONFERENCE, RECORDED
Event Date: November 05 – November 09, 2023
Location: Omni Las Colinas Hotel, Irving, TX
NASCUS members receive CUNA member pricing. To receive this pricing, or for quicker registration, email [email protected] or call 800-356-9655.
Protect against BSA/AML threats
Bank Secrecy Act (BSA) and Anti-Money Laundering (AML)-related crimes are evolving, and members expect you to protect them from these threats while still providing the services they need. You need a thorough understanding of illicit financial activities to keep your members safe and your credit union compliant.
At the BSA/AML Certification Conference with NASCUS/CUNA, you’ll hone your acumen as a reliable, confident authority on all things relevant to the BSA, culminating in the chance to earn or recertify your Bank Secrecy Act Compliance Specialist (BSACS) designation.
Learn about the latest in financial crimes, including:
- Bank Secrecy Act (BSA)
- Anti-Money Laundering Act (AML)
- Countering the financing of terrorism (CFT)
- Elder abuse
- Human trafficking
- How to protect your members and credit union
The agenda also includes can’t-miss general sessions for all levels.
Who should attend
BSA officers, compliance officers, CEOs, risk managers, examiners (state and federal), operations professionals with BSA-related duties
NASCUS Summary: Registry of Supervised Nonbanks that Use Form Contracts To Impose Terms and Conditions That Seek To Waive or Limit Consumer Legal Protections
12 CFR Part 1092
The Consumer Financial Protection Bureau (CFPB) is issuing this proposed rule to require that nonbanks subject to its supervisory authority, with limited exceptions, register each year in a nonbank registration system established by the CFPB information about their use of certain terms and conditions in form contracts for consumer financial products/services that pose risks to consumers.
Comments must be received by April 3, 2023, and the proposed rule can be found here.
Log-in required to view the entire summary
CFPB Publishes New Findings on Financial Profiles of Buy Now, Pay Later Borrowers
The CFPBhas published a new report analyzing the financial profiles of Buy Now, Pay Later borrowers. While many Buy Now, Pay Later borrowers use the product without noticeable indications of financial stress, the report finds that Buy Now, Pay Later borrowers are more likely to be active users of other types of credit products like credit cards, personal loans, and student loans. They are also more likely to exhibit measures of financial distress than non-users. For example, Buy Now, Pay Later borrowers are more likely to be highly indebted or have revolving balances or delinquencies on their credit cards compared to consumers who do not use Buy Now, Pay Later products. Buy Now, Pay Later borrowers are also more likely to use high-interest financial services such as payday loans, pawn loans, and bank account overdrafts. The report follows previous CFPB research on the Buy Now, Pay Later market.
CFPB Announces Appointments of New Advisory Committee Members
The CFPB announced the appointment of new members to the Consumer Advisory Board, Community Bank Advisory Council, Credit Union Advisory Council, and Academic Research Council.
The Dodd-Frank Wall Street Reform and Consumer Protection Act charges the CFPB with establishing a Consumer Advisory Board to provide advice on a variety of consumer finance issues. Members of the Consumer Advisory Board represent the various districts of the Federal Reserve System. Each member appointed to the Consumer Advisory Board was recommended by a president of a Federal Reserve Bank.
In addition, the Community Bank Advisory Council and Credit Union Advisory Council advise and consult the CFPB on financial issues related to community banks and credit unions. The Academic Research Council engages on the strategic research planning process and research agenda, and provides feedback on research methodologies and collection strategies.
New CFPB Issue Spotlight Examines High Fees that Chip Away at Public Benefits
The Consumer Financial Protection Bureau (CFPB) released a new issue spotlight examining how the financial products used to deliver public benefits, like Social Security and unemployment compensation, affect individuals’ ability to fully access the assistance provided through those programs.
Courtesy of Jesse Coghlan, CoinTelegraph.com
The United States commodities regulator is set to take a close look at the decentralized finance space at an upcoming meeting of its tech committee, where it has also invited crypto industry executives to present.
The Commodities Futures Trading Commission (CFTC) announced on March 1 that the agenda for the March 22 meeting of its Technology Advisory Committee will include a panel on “exploring issues in decentralized finance.”
Other panels will explore responsible Artificial Intelligence (AI) development and possible threats arising from AI along with cybersecurity threats to financial markets.
CFTC commissioner Christy Goldsmith Romero said in a statement the panel has an opportunity “to look past labels and examine the issues presented by DeFi thoughtfully and holistically,” adding:
“A discussion about DeFi, including cyber vulnerabilities, indicators of ‘decentralization,’ digital identity and unhosted wallets, will contribute to ongoing policy discussions in Washington, D.C. and beyond the beltway.”
The panel will include presentations that provide an overview of the DeFi ecosystem and will discuss decentralization issues, digital identity, noncustodial crypto wallets and exploits.
Executives from crypto companies including crypto custody platform Fireblocks, security company Trail Of Bits, venture capital firm Terranet Ventures and blockchain intelligence firms TRM Labs and Metrika are slated to present during the meeting.
The meeting agenda will also include a session that considers a subcommittee on crypto and blockchain technology in another move to help cement its bid to win regulatory jurisdiction over crypto.
Last month, the CFTC’s Global Markets Advisory Committee discussed digital asset markets at its inaugural meeting.
Related: Rep. Maxine Waters says all US regulators ‘better get together on crypto’
Commissioner Caroline Pham, who oversaw the Feb. 13 meeting, said that crypto markets are “truly borderless” and urged policymakers to “understand what is happening” so the policy approach by the U.S. “does not leave Americans behind and playing catch-up.”
The CFTC has been edging for regulatory control of the burgeoning crypto sector from the Securities and Exchange Commission, with CFTC commissioners urging Congress to give the regulator oversight overcrypto.
CFTC chairman Rostin Behnam has similarly attempted to justify why the regulator should have authority over the space, saying the commission was “well positioned” to address regulatory shortfalls.
Courtesy of Anna Hrushka, BankingDive
Brief:
- Newark, Ohio-based Park National Bank agreed to a $9 million settlement with the Justice Department to resolve allegations the bank engaged in lending discrimination in the Columbus metropolitan area, the agency announced Tuesday.
- Park National failed to provide home loans in majority-Black and Hispanic neighborhoods in the Columbus area between 2015 and 2021, the DOJ said.
- The settlement is the sixth redlining-related penalty to be levied against a lender since the DOJ, in lock-step with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, stepped up efforts to crack down on the practice in 2021.
All of Park National’s branches and mortgage lenders in the Columbus area were concentrated in majority-white neighborhoods, the DOJ alleges in its complaint. The $9.8 billion-asset bank failed to take any meaningful measures to compensate for its lack of physical presence in majority-Black and Hispanic communities, the DOJ said.
As part of the consent order, Park National has agreed to invest at least $7.75 million in a loan subsidy fund to increase access to credit for home mortgage, improvement and refinance loans, as well as home equity loans and lines of credit in majority-Black and Hispanic neighborhoods in the Columbus area, the agency said.
The bank will also commit $750,000 to outreach, education and credit counseling initiatives, as well as $500,000 to developing community partnerships in majority-Black and Hispanic areas, according to the DOJ.
“When banks fail to provide equal access to lending services in neighborhoods of color, they engage in modern-day redlining and exacerbate the racial wealth gap in our country,” Kristen Clarke, assistant attorney general of the DOJ’s Civil Rights Division, said in a statement Tuesday. “The Justice Department will continue to fight to fulfill the promise of our nation’s fair lending laws while tearing down the discriminatory barriers that deny Black people and other people of color access to economic opportunity and homeownership.”
Park National said it has identified proactive steps to create more opportunities to connect with prospective borrowers and has several home lending initiatives underway.
“While we disagree with any suggestion that intentional discrimination took place, we are united with the DOJ in our commitment to ensuring equal access to credit for all consumers,” Park National CEO David Trautman said in a statement Tuesday.
In a separate statement to Banking Dive, Trautman said Park National Bank “takes pride in our heritage of corporate citizenship, philanthropy, and compassionate support for all communities.”
“We condemn discrimination in any form and stand firm in our commitment to providing equal access to credit for all borrowers,” Trautman said. “We look forward to creating even more opportunities for individuals and families to achieve the dream of home ownership.”
Tuesday’s consent order follows a $31 million settlement the DOJ reached with Los Angeles-based City National Bank in January over claims the bank avoided providing mortgage-lending services to majority-Black and Hispanic neighborhoods in Los Angeles County.
The DOJ said it has levied $84 million in penalties since the launch of its Combating Redlining Initiative.
Save the Date: July 17–19, 2023
Financial cooperative regulators are cordially invited to attend the International Credit Union Regulators’ Network (ICURN) annual conference to take place in the Washington, D.C. area at the National Credit Union Administration. We all look forward to returning to Washington, D.C. for the first time since 2016. Save the date and set your budgets to attend the important annual event anywhere for credit union supervisors!
Co-hosted by
REGISTRATION
The cost to attend the conference for regulators from G20 countries is US$1,550 per person or $995 per person for regulators from non-G20 countries. The registration fee includes: attendance to all conference activities Monday through Wednesday, conference materials, refreshment breaks, two lunches and one welcome dinner/cruise. The G20 countries are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, EU member countries.
VENUE & HOTEL BOOKING
The meeting will take place with the offices of the National Credit Union Administration (NCUA) at 1775 Duke Street, Alexandria, Virginia. As this is a US government building we will need to obtain your date of birth and passport number for security clearance. We have reserved a block of rooms at a special conference rate at the Embassy Suites Hotel which is adjacent to (NCUA). All rooms have a two room suite layout, a kitchenette and breakfast is included in the room rate. The hotel is located directly across from the King Street metro station which for any easy connection to Regan National Airport and to see the sights of Washington, D.C. or to walk though Old Town Alexandria. Waterfront amenities such as restaurants, bars, and water taxis are within a mile.