(Aug. 6, 2021) Evictions of tenants in counties experiencing substantial and high levels of community transmission levels of the coronavirus are banned until Oct. 3 under an order issued this week by the Centers for Disease Control and Prevention (CDC).
In issuing the order, CDC Director Dr. Rochelle Walensky said her agency had determined that evictions of tenants for failure to make rent or housing payments “could be detrimental to public health control measures to slow the spread of SARS-CoV-2, the virus that causes COVID-19.” The order, expiring in early October, applies to experiencing substantial and high levels of community transmission levels of SARS-CoV-2.
According to news reports, about 80% of U.S. counties have reached the “substantial or high” disease transmission rates; those counties hold about 90% of the U.S. population, the reports stated.
The CDC said its eviction moratorium allows additional time for rent relief to reach renters and to further increase vaccination rates. “In the context of a pandemic, eviction moratoria—like quarantine, isolation, and social distancing—can be an effective public health measure utilized to prevent the spread of communicable disease,” the agency said. “Eviction moratoria facilitate self-isolation and self-quarantine by people who become ill or who are at risk of transmitting COVID-19 by keeping people out of congregate settings and in their own homes,” the agency added.
However, there remains the question of whether the latest eviction ban will pass judicial review (extension of a previous ban was blocked by the Supreme Court, which ruled that Congress must act).
LINK:
CDC Issues Eviction Order in Areas of Substantial and High Transmission
(Aug. 6, 2021) Three key and “must attend” events for many in the state system are just days ahead. Here’s a rundown of the NASCUS-sponsored sessions, by their respective dates:
- Aug. 12 (Thursday) — NASCUS 101: The latest episode in this popular series covers, in just 30 minutes, NASCUS legislative and regulatory (L&R) resources, educational offerings and webinars, member engagement, as well as news and data. Additionally, the program shows members how to volunteer for a committee or working group, personalize member communications and sign up for regulatory and security alerts – as well as how to connect with other members to exchange ideas and collaborate. Also highlighted during the session: NASCUS’ latest product, Campus 365 (powered by BAI), which helps members hone their compliance and professional skills training, and more. The bi-monthly series — free and open to all NASCUS members — illustrates how collaboration among all 45 regulatory agency members, committees, credit unions, leagues, corporates, trade associations, and CUSOs can support the credit union system. NASCUS 101 is also scheduled for Oct. 14 and Dec. 9.
- Aug. 16 – KY Examiner School (open to all examiners): State credit union examiners from are invited to this session, developed to help examiners build skill sets and enhance their knowledge around a core area of topics. The virtual program starts 9 a.m. and runs until 4 p.m., ET. Among the scheduled speakers are Mark DeBree, managing principal, and Aaron Martini, director ALM services, both of Catalyst Strategic Solutions; Rayleen Pirnie, NEACH; Glory LeDu, president, LeagueInfoSight LLC; Kevin Chiappetta, president, QuantyPhi; and Brian Knight, NASCUS executive vice president and general counsel.
- Aug. 17-18 – 2021 NASCUS State System Summit (S3): NASCUS’ flagship event of 2021 (presented virtually) is a unique event which brings together credit union regulators and practitioners for a mutual exchange of dialog, problem-solving, and shared resources within the system. Key sessions scheduled at the two-day event include: Employment Trends: What is the New Reality?; The Changing World of Real Estate and Mortgage Lending; The Economic Landscape: 2021 and Beyond; Appraisal Industry in Conflict: Implications for Credit Unions. Also on the agenda: A “state of the state system” address by NASCUS President and CEO Lucy Ito, and comments from NASCUS state regulatory and credit union leadership.
LINKS:
Aug. 12 NASCUS 101 (via the NASCUS Member Portal)
Aug. 16 KY Examiner School Virtual Event Agenda, Registration
Aug. 17-18 Agenda, registration for NASCUS 2021 State System Summit (S3)
(Aug. 6, 2021) After finding that an effective date extension of two final rules under fair debt collection laws is unnecessary, the CFPB late last week said the rules would take effect, as originally planned, on Nov. 30.
In a release, the bureau said an extension to Jan. 29 of two rules under the Fair Debt Collection Practices Act (FDCPA), as proposed in April, was not necessarily supported by commenters. The agency said it had proposed the extension to allow stakeholders affected by the COVID-19 pandemic additional time to review and implement the rules. Most commenters said that they were ready to comply by the Nov. 30 date, and did not, CFPB said, focus on whether more time was needed to put the rules into effect).
(However, the agency noted, some commenters recommended, in the alternative to an extension, that the rules be reconsidered. The bureau rejected that view, noting that approach “was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act.” There is some wiggle room, apparently: the agency said “nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date.”)
The two rules now set to take effect Nov. 30 are:
- One adopted in October of last year that focuses on debt collection communications and clarifies the FDCPA’s prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
- One adopted in December 2020 that aims to clarify disclosures debt collectors must provide to consumers at the beginning of collection communications. It also prohibits, the agency pointed out, debt collectors from suing or threatening to sue consumers on time-barred debt. The second rule also requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency, CFPB stated.
“The CFPB will consider additional guidance for debt collectors, including those that service mortgage loans, as necessary,” the agency noted, adding that it “recognizes that mortgage servicers are expected to receive a potentially historically high number of loss mitigation inquiries in the fall as large numbers of borrowers exit forbearance and that, as a result, mortgage servicers in particular may face capacity constraints.”
LINK:
CFPB Confirms Effective Date for Debt Collection Final Rules
(Aug. 6, 2021) Miguel A. Polanco, a former Army officer and investment banker, is now the top workforce and supplier diversity officer NCUA, the agency announced this week. The agency said Polanco will serve as director of the agency’s Office of Minority and Women Inclusion (OMWI); he most recently served as deputy director. He replaces Millie Avalos, who was serving as acting director.
Polanco’s other roles at the credit union regulator included managing the agency’s supplier diversity program. He also worked for the Small Business Administration (SBA) and its 8(a) program (a business assistance program for small, disadvantaged businesses). Prior to that, he worked in investment banking at Citibank Puerto Rico, and served as U.S. Army intelligence officer, NCUA said.
He is a graduate of the U.S. Military Academy at West Point and the Kellogg Graduate School of Management at Northwestern University.
LINK:
Polanco Named NCUA Director for the Office of Minority and Women Inclusion
(Aug. 6, 2021) The financing of fees and commissions continue to be prohibited for federally insured credit unions, despite adoption of a new rule earlier this year allowing capitalization of loan interest, NCUA said in a letter issued Thursday.
In Letter to Credit Unions 21-CU-07, the agency said that maintaining the prohibition on capitalization of fees “is an important consumer protection feature of the rule for member borrowers.”
In June, the agency’s board voted unanimously to lift the prohibition of capitalization of interest in connection with loan workouts and modifications; the rule took effect late last week (July 30). The change was made, NCUA said, to give borrowers additional access to loan workouts, perhaps caused by the economic disruption caused by the coronavirus crisis.
The rule also sets documentation requirements to help ensure that the addition of unpaid interest to the principal balance of a mortgage loan does not hinder the borrower’s ability to become current on the loan.
Although the final rule prohibits capitalizing loan fees and commissions, the letter notes it does continue to allow advances to cover third-party fees to protect loan collateral, such as for force-placed insurance or property taxes.
The letter also suggests that “a prudently underwritten and appropriately managed loan modification, consistent with safe and sound lending practices” is the best approach for helping borrowers.
Other key points of the letter include:
- All documentation for loan capitalizations, including required disclosures, must be accurate, clear and conspicuous, “and consistent with applicable federal and state laws and regulations.” The agency said any adverse credit reporting must be accurate and comply with the requirements of the Fair Credit Reporting Act, and, when applicable, state law.
- Credit unions should document why capitalizing interest is the best course of action when determining the terms of the modification. “Further, the rule requires the credit union’s policy ensure that a credit union makes loan workout decisions based on a borrower’s renewed willingness and ability to repay the loan,” the letter states.
- A credit union’s policy must also establish limits on the number of modifications permitted for an individual loan. “If a credit union restructures an individual loan more than once a year or twice in five years, examiners will expect the documentation to reflect the borrower’s continued willingness and ability to repay the loan,” the letter states.
NASCUS wrote in its comment letter on the proposal earlier this year, that it had the capacity to provide credit unions with greater flexibility to work with economically distressed members (including those affected by the coronavirus crisis). “That enhanced flexibility benefits distressed credit union borrowers by expanding the options for repayment programs as the member regains their economic footing,” NASCUS wrote.
LINK:
NCUA Letter to Credit Unions 21-CU-07: Capitalization of Unpaid Interest
(Aug. 6, 2021) Whether the new Juneteenth federal holiday (federally observed for the first time this past June) counts as a business day or federal holiday for purposes of mortgage rescissions and disclosures depends on when the relevant time period for the loan began, CFPB said in an interpretive rule issued Thursday.
According to the bureau, if the relevant time period began on or before June 17, then June 19 was a business day. If the period began after June 17, then June 19 was a federal holiday. The timing effects rescission of closed-end mortgages and TILA-RESPA integrated disclosures, the bureau said.
CFPB also said its interpretive rule explains that creditors are not prohibited from providing longer time periods than required.
For example, CFPB said, if a time period began on or before June 17, creditors could still consider June 19 a federal holiday. “Friday, June 18, the day of federal observance for the 2021 Juneteenth holiday, was considered a business day because when a federal holiday falls on a Saturday, the day of federal observance is considered a business day for these time-sensitive consumer protections,” the agency stated.
The federal holiday was officially observed June 18 (since June 19 was a Saturday). The holiday became law June 17, the day it was enacted by President Joe Biden’s (D) signature. The holiday went into effect the following day, June 18.
The agency noted that Regulation Z of its mortgage rules establishes timing requirements, calculated in business days, for when borrowers must receive certain disclosures and when borrowers have the right to cancel some mortgages. “Because the Juneteenth National Independence Day Act was signed into law two days before the newly created holiday on June 19, many participants in the mortgage industry reported being unsure of how to treat the day for purposes of regulatory compliance.
“The mortgage industry can refer to today’s interpretive rule when determining how to treat June 19, 2021,” CFPB added.
LINK:
(Aug. 6, 2021) Congress should give NCUA authority to examine (and enforce actions) over third party vendors, NCUA Board Chairman Todd Harper said in testimony to the Senate Banking Committee this week. He also urged Congress to make several improvements to the National Credit Union Share Insurance Fund (NCUSIF).
In May, Harper made similar requests before the House Financial Services Committee.
On exam authority, Harper asked Congress to give his agency exam and enforcement oversight of third-party vendors, including credit union service organizations (CUSOs). Calling the lack of authority a “regulatory blind spot,” Harper asserted that NCUA should have comparable authority as other federal financial institution regulators already have.
“While there are many advantages to using these service providers, the concentration of credit union services within CUSOs and third-party vendors presents safety and soundness and compliance risk for the credit union industry,” Harper told the committee.
He said the top five credit union core processor vendors provide services to approximately 87% of total assets held by credit unions. Additionally, he said, the top five CUSOs provide services to nearly 96% of total credit union system assets.
“A failure of even one of these vendors represents a significant potential risk to the (National Credit Union) Share Insurance Fund and the potential for losses from these organizations are not hypothetical,” Harper asserted. “Between 2008 and 2015, CUSOs contributed to more than $300 million in losses to the Share Insurance Fund alone.”
The NCUA Board chairman told the committee that the continued transfer of operations from credit unions to CUSOs and other third parties diminished the agency’s ability to “accurately assess all the risks present in the credit union system and determine if current CUSO or third-party vendor risk-mitigation strategies are adequate.”
NASCUS supports the agency obtaining the power over technology service providers (TSPs) that provide services to federally insured credit unions — provided that any such authority requires NCUA to rely on state examinations of such service providers where such authority exists at the state level. Further, NASCUS supports efforts to strengthen state regulatory exam and supervision of third parties providing services to state-chartered credit unions.
Regarding the insurance fund, Harper made three legislative requests to the committee:
- Increase the fund’s capacity by removing the 1.50% statutory ceiling on its capitalization;
- Remove the limitation on assessing premiums when the equity ratio exceeds 1.30% of equity in the fund to insured shares, giving the NCUA Board discretion on the assessment of premiums;
- Institute a risk-based premium system.
LINK:
(Aug. 6, 2021) The Massachusetts Division of Banks is looking for candidates to fill the position of chief director of risk management (safety & soundness) supervision. For more information, see the NASCUS Career/Job Postings page (link below) … Federal credit unions were advised by NCUA this week that the 18% loan ceiling was continued by the agency, following board action in June. The 18% ceiling runs for 18 months, expiring March 10, 2023. The current 18% loan rate ceiling for FCUs ends Sept. 10.
LINKS:
NCUA Letter to FCUs 21-FCU-04: Permissible Loan Interest Rate Ceiling Extended