(Aug. 13, 2021) NCUA Board Chairman Todd Harper, employment guru Diane Reed, mortgage lending expert Tracy Jean Ashfield and NASCUS President and CEO Lucy Ito are among the headliners for next week’s 2021 NASCUS State System Summit (S3), a virtual meeting for the state credit union system.

Others leading sessions at the Tuesday and Wednesday event (Aug. 17-18, which kicks off both days at 1:30 p.m. ET) include Economist Thomas Siems, NCUA Deputy Director, Office of Examination and Insurance Tim Segerson and NASCUS Executive Vice President and General Counsel Brian Knight.

The 2021 S3 is the flagship event for NASCUS and the annual conference for the state credit union system. It’s 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 during two days of learning and networking with friends, colleagues, and industry leaders from across the country.

New this year at S3 is an attendee hub (for registered participants in S3), via NASCUS.org, that provides access to presentation downloads and on-demand videos of each session. Also new will be “gamification,” in which attendees earn points just by visiting the hub and interacting with the website. Participants with the greatest number of points win a prize.

NASCUS’ Lucy Ito will be delivering her final “State of the State System” remarks as CEO of the association at the first day of S3; she announced earlier this year she will retire at the end of 2021. NCUA’s Harper (who was just renominated for a new term on the agency board; see additional item) will participate in a conversation with Ito in the following session.

Other sessions include:

  • Diane Reed, president of HRDoc in Fairfax, Va. and veteran credit union human resources professional, will address employment trends at credit unions in the context of the ongoing pandemic.
  • Thomas Siems, Ph.D., senior economist and director of research for the Conference of State Bank Supervisors (CSBS) in Washington on the latest economic trends and their effect on financial regulation.
  • Tracy Jean Ashfield, president of Ashfield & Associates, Madison, Wis., on mortgage lending trends and strategic planning.
  • Tim Segerson of NCUA and Brian Knight of NASCUS on developments in the appraisal industry and the implications of those for credit unions.

Additionally, NASCUS Regulator Board Chairman Rose Conner (administrator of the North Carolina Credit Union Division) and NASCUS Credit Union Advisory Council Chairman Mike Williams (president and CEO of Colorado Credit Union in Denver) will offer remarks from their perspectives as leaders of the association.

“Each year the S3 offers illuminating presentations, compelling dialog and new ideas for the state credit union system, and I expect this year’s Summit to live up to if not exceed our past performance,” NASCUS’ Ito said. “I hope as many members of the state system as possible will join me next week for my final state system Summit as president of NASCUS.”

LINK:

Registration, agenda, 2021 NASCUS S3 (State System Summit)

(Aug. 13, 2021) NCUA this month will begin transitioning to the new MERIT exam tool and other applications meant to modernize and streamline the agency’s operations, according to a letter to federally insured credit unions issued Thursday.

NCUA’s Letter to Credit Unions (LTCU) 21-CU-08 states that the new applications may be accessed through NCUA Connect, another of its applications debuting this month, which the agency described as a central user interface which credit unions use to securely interact with the agency.

In addition to MERIT (the Modern Examination and Risk Identification Tool) the applications include:

  • Data Exchange Application (DEXA): an “ingest tool” that provides authorized NCUA, state supervisory authority (SSA), and credit union users the ability to securely upload the credit union member loan and share data requested during the examination and supervision process.
  • Admin Portal: designed to provide authorized credit union administrative users with the ability to manage user access to NCUA Connect and other applications for their credit unions.
  • Consumer Access Process and Reporting Information System (CAPRIS, which replaces the Field of Membership Internet Application (FOMIA): for use by multiple common bond FCUs to submit field of membership expansion requests electronically.

Credit unions that want to use the applications, the letter notes, must identify two individuals as admin portal administrators with delegated responsibility for managing the users for their credit union. “Once approved and confirmed by the NCUA, administrators can add users and grant application access,” the agency stated. “As part of the process, the administrator will be granted access to NCUA Connect to access the Admin Portal application.”

The agency also noted that MERIT – which is designed to provide examiners with visualizations to identify trends and potential risks in credit unions through enhanced, integrated analytics – allows SSAs and NCUA to work jointly on examinations, “reducing redundancy, increasing efficiency, and improving communication.”

(NASCUS developed a team of state regulators to offer feedback to the agency as the system was developed; NASCUS will continue to consult with the agency as the system is deployed).

According to NCUA, MERIT gives examiners the ability to document examination results, generate the report issued to the credit union, and formally follow up on examination concerns. The agency said the new system allows credit unions to securely transfer documents to their NCUA and SSA exam teams (as applicable) through the system’s “survey” functionality. “Examiners can send a document request list (survey) through MERIT rather than through other manual or electronic means, thus improving the efficiency of the document request process,” NCUA said.

Before credit unions request to obtain access to information from MERIT (or DEXA), NCUA said credit unions should wait until they are notified of their first exam in MERIT. Doing so before that, NCUA suggested, would be fruitless since there is no information specific to credit unions in the system until the first MERIT exam. “Further, as part of enhanced security, user accounts are locked after a period of inactivity, and user access would need to be restored once notified of an upcoming examination,” the agency said.

The LTCU also lists user training opportunities for the new systems, complete with Internet links.

LINK:

NCUA LTCU 21-CU-08: Implementation of Modernized Systems

(Aug. 13, 2021) NASCUS’ Lucy Ito congratulated Harper for the renomination. She noted his experience with credit union issues in both regulatory and legislative areas, and his focus on consumer protections and capital requirements for credit unions. “NASCUS has established a strong rapport with the chairman, which enables both sides to share insights and concerns candidly for the ultimate benefit of a strong dual chartering system,” Ito said. “We look forward to continuing the dialog with Chairman Harper and wish him the best as the confirmation process unfolds.”

(Aug. 13, 2021) A mutual membership alliance between NASCUS and the African-American Credit Union Coalition (AACUC) was announced this week, with the aim of strengthening the state credit union system and enhancing diversity, equity, and inclusion (DEI) engagement strategies within the industry, the groups said.

The alliance results in AACUC holding associate member status with NASCUS, and NASCUS maintaining a corporate membership with AACUC.

“With the NASCUS mission focused on forging a vibrant dual charter system and a strong, healthy state charter option, this partnership enhances dialogue among regulators and state credit unions while also promoting personal and professional growth within the state system,” said NASCUS President and CEO Lucy Ito.

AACUC was founded in 1999 to increase the strength of a global credit union community through professional development and advocacy. It includes in its membership credit union practitioners and volunteers, and groups from insurance, regulatory agencies, consultants and others in the credit union system. Renée Sattiewhite is president and CEO.

“AACUC and NASCUS are structured to create a fair and equitable industry while encouraging growth and living the ‘people helping people’ philosophy,” Sattiewhite said. “I look forward to deepening our collaborative relationship and working together to make a positive lasting impact on the lives of millions of Americans.”

The alliance, according to both groups, will result in members from each organization with the opportunity to learn best practices, expand their knowledge of real-world issues, and deliberate on the regulatory landscape. The groups also noted that the alliance offers the opportunity to expand diversity, equity and inclusion (DEI) initiatives within the state system.

LINK:

NASCUS and AACUC Announce Mutual Membership Alliance

(Aug. 13, 2021) Revised guidance on effective authentication and access risk management principles and practices related to digital banking services and information systems was issued this week by NCUA and other federal financial institution regulators.

The guidance, issued by the regulators as FFIEC members (including the State Liaison Committee (SLC)), replaces direction issued in 2005 and 2011 on Internet-based services, focusing not only on customer access but also access by employees and third parties, the exam council said.

“This Guidance acknowledges significant risks associated with the cybersecurity threat landscape that reinforce the need for financial institutions to effectively authenticate users and customers to protect information systems, accounts, and data,” the guidance states in its introduction. “The Guidance also recognizes that authentication considerations have extended beyond customers and include employees, third parties, and system-to-system communications.”

The exam council said the revised guidance:

  • Highlights the current cybersecurity threat environment including increased remote access by customers and users, as well as raids that leverage compromised credentials; and mentions the risks arising from push payment capabilities.
  • Recognizes the importance of the financial institution’s risk assessment to determine appropriate access and authentication practices to determine the wide range of users accessing financial institution systems and services.
  • Supports a financial institution’s adoption of layered security and underscores weaknesses in single-factor authentication.
  • Discusses how multi-factor authentication or controls of equivalent strength can more effectively mitigate risks.
  • Includes examples of authentication controls, and a list of government and industry resources and references to assist financial institutions with authentication and access management.

LINK:

FFIEC Issues Guidance on Authentication and Access to Financial Institution Services and Systems

(Aug. 13, 2021) Todd Harper could remain chairman of the NCUA Board through at least 2024, and would be able to stay on the agency board (either as board leader or a member) until at least April 2027, if the Senate confirms him to another term as recommended by the White House this week.

On Tuesday, President Joe Biden (D) sent Harper’s nomination to continue to be a member of the NCUA Board to the Senate. The White House release noted the action is a “reappointment” to the agency board, and would be for a term expiring April 10, 2027.

Harper joined the board after confirmation by the Senate in March 2019, following his nomination to the seat by President Donald Trump (R) in February. He was named chairman of the board, succeeding Republican appointee Rodney Hood, in January of this year by the newly inaugurated Biden.

If confirmed, Harper may continue to be chairman of the three-member board. However, should Biden serve only one term (by not prevailing in the 2024 election, for instance), the next president could designate another board member as chairman. In any event, the chairman serves at the pleasure of the president, whoever that may be.

Since joining the board, Harper was filling a term that was held by former NCUA Board Chairman Debbie Matz and that began in 2015. Matz resigned in 2016, and the seat had been open until Harper filled it two years ago.

However, that six-year term officially ended in April and Harper has been serving in a holdover capacity since then (which he can do until his successor is confirmed by the Senate). In this case, Harper will be his own successor. Typically, NCUA Board members cannot succeed themselves – but there are exception and different interpretations of the exceptions. The Biden White House has essentially established a precedent in interpreting the Federal Credit Union Act to allow someone appointed to fill an unexpired term to be reappointed for a full six-year term.

Harper was the first NCUA staffer to become an agency board member and chairman. He had previously served as head of the agency’s Office of Public and Congressional Affairs and was the chief policy advisor to two former agency board chairmen, including Matz as well as Rick Metsger. He previously served in the U.S. House of Representatives as staff director for the on capital markets, insurance, and government-sponsored enterprises subcommittee and as legislative director and senior legislative assistant to former Rep. Paul Kanjorski (D-Pa.).

The nomination will head for consideration to the Senate Banking Committee, whose chairman (Sherrod Brown, D-Ohio) issued a statement this week saying he looks “forward to considering Chairman Harper’s renomination in the Committee and looks forward to continuing to work together to strengthen the NCUA and ensure credit unions can serve their members.”

No confirmation hearing date has yet been set by the Senate panel.

LINK:

White House nominations sent to the Senate

(Aug. 13, 2021) The renomination of Harper to a seat on the NCUA Board holds some other significance. First, it would keep him on the board much longer than the other two current members of the board. Second, the NCUA Board seat is only one of five federal financial institution regulators that are currently open (or filled with “acting” or holdover incumbents) for which the White House has seen fit to recently submit a nomination.

If confirmed to a new term, NCUA Board Chairman Todd Harper would immediately snare the longest tenure of the three current members of the NCUA Board. Now-Member (and former chairman) Hood’s term ends two years from now (in August 2023). The term of Vice Chairman Kyle Hauptman (also a Republican nominee) ends in August 2025.

By naming Harper to a new term, the Biden administration is attempting to fill permanently (that is, not in an acting or holdover capacity) one of five empty or expired financial regulators’ terms. Four of those are still seeking a nominee to fill the seat permanently. Those are:

  • Comptroller of the Currency (now filled by Acting Comptroller Michael J. Hsu);
  • Vice chairman of the FDIC Board (now vacant);
  • Member of the Federal Reserve Board (now vacant);
  • Member of the FDIC Board (now held by Martin Gruenberg, serving in a holdover capacity since December 2018).

No one has been nominated to permanently fill any of those vacant, acting, or holdover positions.

A sixth position, for a permanent director of the Consumer Financial Protection Bureau (CFPB), has a nominee – Rohit Chopra, now a member of the Federal Trade Commission (FTC). Chopra’s nomination was recommended to the full Senate by tied vote (12-12) in March. The nomination, for a five-year term, now awaits action by the Senate; no vote has yet been scheduled. In the meantime, Dave Uejio has been filling the seat – but his days at the helm of the bureau may be numbered. On Aug. 5, Uejio appeared before the Senate Banking Committee for a confirmation hearing on his nomination to be assistant secretary of Housing and Urban Development (HUD).

(Aug. 13, 2021) Just a reminder that state credit union examiners from around the country can participate in Monday’s (Aug. 16) Kentucky Examiner School, developed to help examiners build skill sets and enhance their knowledge around a core area of topics. The program starts 9 a.m. and runs until 4 p.m., ET; cost is $200 for NASCUS member examiners. See link below for registration information … Credit card account limits declined overall during the COVID pandemic – the largest declines being for high-credit-score borrowers – though a spike in account closures early in the pandemic began a decline after May 2020 that continued through at least May 2021, the CFPB said this week. According to the bureau, credit limits for prime and near prime borrowers broke with their previous upward trend and largely flattened out beginning in March 2020; they began to grow more quickly beginning in February 2021. At the other end of the credit spectrum, the bureau reported, credit card limits for subprime and deep subprime borrowers changed little during the pandemic.

LINKS:

Agenda, registration, KY Examiner School Virtual Event

Credit card limits are rising for most groups after stagnating during the pandemic