(Nov. 6, 2020) Continuing its streak of accreditation, the NASCUS-CUNA BSA/AML Certification eSchool – now underway through Dec. 7 – has again been certified for continuing education units (CEUs) by the Association of Certified Anti-Money Laundering Specialists (ACAMS), the premier body for educating and accrediting anti-money laundering specialists around the world. The certification means that participants at the NASCUS-CUNA eSchool will earn one CEU (as a CAMS credit) for each session they attend in conjunction with the school. Those sessions include: BSA in the Virtual World; Don’t Build a House on Sand: Risk Assessment; De-Risking: No Joking Matter/Fine Tuning Your CDD; BSA Leadership; A View from the Regulator; Future of BSA: SBA, Lending, and Other Updates BSA; Roundtable Q & A. Credits are only eligible for those individuals who participate during the live delivery of the program. See the link for more information on the eSchool … Comments are due Jan. 4 on an interagency proposal (including by NCUA, CFPB and the federal banking agencies) on the role of supervisory guidance in regulation. See the CFPB Rules and Summaries page on the NASCUS website for more information.
LINK:
NASCUS & CUNA BSA/AML Certification eSchool
NASCUS web page: CFPB Rules and Summaries 2020
(Nov. 6, 2020) The CFPB’s Credit Union Advisory Council (CUAC), along with the Consumer Advisory Board (CAB) and the Community Bank Advisory Council (CBAC), are scheduled to meet in a combined, public virtual session from 1 to 5:30 p.m. ET Nov. 18, according to bureau notices issued this week. The agenda, detailed on the agency’s website, includes discussion of:
- section 1071 of the Dodd-Frank Act, which revised the Equal Credit Opportunity Act (ECOA) to call for financial institutions’ collection and reporting of data regarding applications for credit for women-owned, minority-owned, and small businesses (the bureau began inviting public feedback on an outline of proposals in September);
- consumer access to financial records under section 1033 of Dodd-Frank (currently addressed in an advance notice of proposed rulemaking); and
- mortgage trends and themes specifically related to the impacts of the COVID-19 pandemic.
The meeting will be held virtually via the Internet, and is open to the public. Advance registration is required.
LINK:
Bureau advisory groups to meet Nov. 18
(Nov. 6, 2020) Increases in the overhead transfer rate (OTR – the rate at which dollars transferred from the National Credit Union Share Insurance Fund (NCUSIF) to fund insurance-related costs of NCUA) lead to the “incontrovertible truth” that doing so means the insurance fund has less resources to face financial troubles for credit unions, NASCUS wrote in a comment letter late last week.
That is, unless the agency decides to charge an insurance fund premium, NASCUS indicated.
In its comment letter to the agency on its request for information about the methodologies used to determine the OTR (and the federal credit union (FCU) operating fee), NASCUS noted that the current proposal for next year’s OTR reflects an increase. The association asserted that the allocation of agency expenses to the insurance fund take on a “particular importance against the backdrop of the ongoing pandemic in the United States and resulting economic dislocation.”
NASCUS pointed out that every dollar the agency pulls from the insurance fund to cover the expenses of the agency is a dollar not available to cover credit union losses, such as those resulting from the financial impact of the coronavirus pandemic. It also means that’s a dollar that may need to be replaced in the insurance fund through an insurance premium being charged.
And there are more issues to be considered, the state system declared through NASCUS.
“Furthermore, the allocation of NCUA’s operating expenses and the corresponding effect on FCU chartering fees has the potential to imbalance the dual chartering system by disadvantaging the state system in an inequitable and inorganic manner,” NASCUS wrote.
The state system also noted that for more than 20 years there has been an imbalance in how the agency covers its expenses from the insurance fund through the OTR, forcing federally insured, state credit unions (FISCUs) to “shoulder an inordinate cost of supervising the safety and soundness of the credit union system.” NASCUS pointed to mid-year statistics from federally insured credit unions showing FISCUS holding nearly 50% of all insured shares, but number only 37% of the federally insured credit unions. Put another way, NASCUS wrote, FISCUs pay half the NCUSIF’s costs but are only 37% of the work.
“Some stakeholders are apt to assert that FCUs pay an aggregate greater amount of NCUA’s overall budget when the total expense to FCUs of the operating fee and OTR are aggregated,” NASCUS wrote. “But this assertion ignores the fact that the NCUSIF is NOT expending resources to conduct examinations on a majority of FISCUs because it relies on the exam work conducted by the states — exam work which is paid for entirely by FISCUs.”
Illustrating its point, NASCUS noted that in 2019 nine states sent their examiners to more 6,793 hours of non-NCUSIF funded training, paid for by state credit union fees of more than $25.2 million for examination and supervision in those nine states alone. “A similar story can be told in the remaining 36 state regulatory agencies,” NASCUS wrote.
Two other imbalances lie within the current system, NASCUS pointed out: the OTR is borne by state-chartered CUs in lost NCUSIF dividend opportunity or as additional insurance premium costs (as may be the case in 2021), and an “inverse benefit” for FCUs through application of the OTR.
“The larger the OTR, the more modest the FCU operating fee,” NASCUS wrote. “That inequitable result is one reason why the OTR methodology is so important to the state system.”
In other comments, NASCUS:
- Supported including the agency’s budget for capital projects within the annual budget subject to the OTR (although it noted doing so “may not be equitable” in some cases under how it is defined in the methodology).
- Disagreed that allocating NCUA work related to CUSOs and other third-party vendors as solely related to the insurance fund is consistent with the principles of the methodology or with the practical reality of a chartering authority. “The allocation of third-party regulatory and supervisory work takes on an enhanced importance given NCUA’s interest in obtaining direct supervisory authority over such entities,” NASCUS wrote. “Should NCUA obtain that regulatory and supervisory authority (which NASCUS supports), ensuring equitable allocation of associated expenses will be essential.”
- Deferred comment on providing an incentive (through a discount in operating fees) for FCUs to complete the voluntary diversity self-assessment “So long as there was no corresponding effect on the OTR from any shortfalls in operating fee funding resulting from the proposed discounts.”
LINK:
NASCUS Comment: Request for Comment, OTR and Operating Fee Schedule Methodologies
(Nov. 6 ,2020) Ending an eight-month role as “acting” top supervisor for NCUA, Myra Toeppe has formally been named the director of the agency’s office of examination and insurance, according to a release issued Monday.
Since March, Toeppe has been serving as acting director of the agency’s office of examination and insurance. That position, according to NCUA, ensures the safety and soundness of federally insured credit unions, and manages risk to the National Credit Union Share Insurance Fund (NCUSIF). The release said the NCUA Board unanimously approved her selection as permanent director.
Toeppe replaced as E&I director Larry Fazio, who was named NCUA executive director last spring.
Prior to her role as acting director, Toeppe served nine years in executive positions with NCUA, including as an associate regional director, regional director, and strategic advisor, NCUA said. Before that, the agency said, she served 25 years with the Office of Thrift Supervision and the Federal Home Loan Bank of Atlanta.
She holds a B.S.B.A. and M.B.A. from the University of Central Florida. She is a 2011 graduate of the Stonier Graduate School of Banking and its Wharton Leadership Program; she has completed the Leadership for a Democratic Society Program at the Federal Executive Institute.
LINK:
Myra Toeppe Named Director of the Office of Examination and Insurance
(Nov. 6, 2020) Registration for CU Campus 365 – the NASCUS partnership with the Bank Administration Institute offering affordable, customizable on-line compliance and education for credit unions – is open now via the NASCUS website.
To register for the program, see the link below.
The partnership offers credit union members of NASCUS access to education and compliance training anytime, anywhere, on affordable terms. CU Campus 365 is offered through the digital resources of BAI, a non-profit, prominent provider of research, training, and leadership programs for credit unions, banks and other financial institutions of all sizes.
Through CU Campus 365, credit union training administrators can deploy customized training to their staff on a wide variety of subjects and disciplines. That includes choosing from a library of hundreds of courses ranging from lending laws and regulations to BSA/AML laws and regulations. Credit union staff will also be able to access training from a professional skills library that will cover coursework from effective leadership to social media marketing through CU Campus 365.
LINK:
Welcome to CU Campus 365 (information and registration)!
(Nov. 6, 2020) Two webinars – one on fair lending and consumer compliance and another on financial literacy and consumer financial protection for servicemembers – are on the horizon for NCUA (in partnership, for the latter, with CFPB).
On Nov. 17, the credit union agency hosts a “Fair Lending and Consumer Compliance Regulatory Update” at 3 p.m. ET, to run about one hour. According to the agency, the webinar will feature staff from the NCUA’s Office of Consumer Financial Protection discussing focus areas for consumer compliance exams in 2021, including a review of COVID-19-related loan modifications and credit reporting; fair lending policies and procedures; and findings from the 2020 consumer compliance exam reviews.
The following day (Nov. 18), NCUA and CFPB partner on a session covering servicemember financial literacy and consumer protection, which starts at 2 p.m. ET and runs for about 45 minutes, according to both agencies. The “Financial Readiness Resources and Information for Servicemembers, Veterans, and their Families” webinar, featuring NCUA’s Office of Consumer Financial Protection, is scheduled to highlight financial literacy resources for servicemembers and their families (on NCUA’s consumer-facing website, MyCreditUnion.gov), and provide a brief overview of servicemember consumer financial protection laws and regulations.
CFPB’s Office of Servicemember Affairs will highlight its own interactive learning tools and resources for servicemembers and their families, according to the agencies.
Advance registration is required for both; see the links below.
LINKS:
NCUA Hosting Webinar on Fair Lending and Consumer Compliance Updates
Registration Now Open for Webinar on Consumer Financial Protection for Servicemembers
(Nov. 6, 2020) A final rule focusing on communications between consumers and debt collectors under the Fair Debt Collection Practices Act (FDCPA) was released late last week by the CFPB, with that final rule scheduled to take effect one year following its publication in the Federal Register. (As of Thursday, the final rule had not yet been published.)
The bureau said the rule is intended to “restate and clarify” prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
Issued in May 2019 (and followed by a supplemental proposal this February), the proposal revised the bureau’s Regulation F, focusing on the timing and means of communications between consumers and debt collectors and clarifying how the protections of the FDCPA, enacted in 1977, apply to newer communication technologies, such as email and text messages.
Not included in the final rule is a safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission, the bureau said. “That provision was proposed to bring greater clarity to this issue but, after receiving questions and comments from many stakeholders concerning the proposal, the Bureau has decided not to finalize that provision,” the bureau said.
However, the final rule summary does note inclusion of a safe harbor for debt collectors from civil liability “for an unintentional third-party disclosure if the debt collector follows the procedures identified in the rule when communicating with a consumer by email or text message.”
Meanwhile, the bureau said it plans to issue a consumer disclosure-focused final rule in December to clarify the information that a debt collector must provide to a consumer at the outset of debt collection and to provide a model notice containing the information required by FDCPA section 809(a). It will also, the bureau said, address consumer protection concerns related to requirements prior to furnishing consumer reporting information and the collection of debt that is beyond the statute of limitations (i.e., time-barred debt, addressed in the above-noted supplemental proposal).
The final rule also contains provisions on disputes, and record retention, among other topics.
LINK:
Final rule notice for Federal Register
(Nov. 6, 2020) While the presidential election contest remained too close to call days after the election, legalizing marijuana for personal or medical uses in five states was a different story: initiatives passed or were leading in each state by relatively healthy margins.
Voters in Arizona, Mississippi, Montana, New Jersey and South Dakota are giving or have given the green light to statewide ballot measures asking them to legalize marijuana for personal or medical use (or both in one case).
In Arizona, voters approved – by 59.8% (with 89% of votes reported as of Thursday) – a measure legalizing possession and use of marijuana for persons who are at least 21 years old, enacting a tax on marijuana sales, and requiring the state to develop rules to regulate marijuana businesses.
Montana voters agreed (with 57.8% in favor) to a state constitution amendment allowing for the legislature or a citizen initiative to establish a minimum legal age for the possession, use, and purchase of marijuana, similar to the regulation of alcohol under the state constitution.
In New Jersey, voters are giving the thumb’s (by 66.9%, and 63% of votes reported as of Thursday) to a measure legalizing the possession and use of marijuana for persons age 21 and older and legalizing the cultivation, processing, and sale of retail marijuana.
South Dakotans had two marijuana-related measures to consider: one legalizing the recreational use of marijuana and another requiring the state legislature to pass laws providing for the use of medical marijuana and the sale of hemp by April 1, 2022. The former was approved by 54.2% of voters, the latter by 69.9%.
Finally, Mississippi voters have given approval handily to medical use of marijuana, despite a relatively convoluted process. First, voters were asked to give the OK to either (or both) of measures advanced by state citizens (through an initiative process), or an alternative of that version advanced by the state legislature (as allowed under state law). In the first stage, voters could choose “either” or “neither.” Voters said OK to “either’ by 67.8%.
Second, those voters who chose “either” were asked to select which one of the “eithers” they supported. The citizens’ measure won overwhelmingly, with 73.9% of the vote. That version would amend the state constitution to create a medical marijuana program administered by the state health department for persons with qualified debilitating medical conditions.
NASCUS has been a leader in the credit union system to call for clarity in federal law regarding financial institutions’ ability to serve legal marijuana businesses. The federal government continues to classify marijuana, also known as cannabis, as an illegal controlled substance, which complicates the ability of credit unions to serve legal marijuana-related businesses within their states. To date, 44 states and the District of Columbia have legalized marijuana use and possession for either recreation or medical use.