(Aug. 27, 2021) Two new summaries of recent CFPB rules – on clarifying the impact of the Juneteenth holiday, and Military Lending Act (MLA)-related exams – have been developed and posted by NASCUS. The summaries are available to members only.
In an interpretive rule issued in July, the bureau attempted to clarify when the new Juneteenth 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. According to the rule, that depends on when the relevant time period for the loan began. 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.
Regarding MLA, the agency said in an interpretive rule effective in June that examinations under the law will now resume, asserting that the prior administration’s reasoning for discontinuing the reviews were not found persuasive. The rule explains the basis for its authority to examine supervised financial institutions for risks to active duty servicemembers and dependents from conduct that violates the MLA. (The MLA, enacted in 2006, and implemented by the Department of Defense, applies to consumer credit offered to military service members and their dependents by, among other things, limiting the interest rates that may be charged on many types of consumer loans to no more than 36%.)
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(Aug. 27, 2021) The NASCUS/CUNA cybersecurity eSchool kicks off next week (Sept. 3) for a 10-week run focusing on key tactics in cybercrime prevention and response from the credit union system. Designed for both regulators and credit union practitioners, the virtual eSchool runs through Nov. 9.
As fraud and other cybercrimes continue to evolve, protecting credit unions is becoming more complex, this in-depth program explores a variety of popular and important cybersecurity topics and offers the opportunity to learn the latest strategies and tactics on maintaining data security.
Among other things, the program offers sessions on:
- Requirements of Part 748 and the GLBA;
- Basic terminology of the cybersecurity space;
- Fundamental components of cybersecurity;
- CIS best practices;
- Cybersecurity requirements and how they are woven throughout the enterprise.
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NASCUS Cybersecurity eSchool, in Partnership with CUNA
(Aug. 27, 2021) Digital currency and related media (including non-fungible tokens and other blockchain technologies) was the subject of an in-depth discussion held this week among members of the NASCUS Legislative and Regulatory (L&R) Committee along with other NASCUS members. The session is one of a series of discussions about digital currency that the L&R Committee hopes to hold over the next year or so; NASCUS members are invited to participate. A recording of this week’s session is posted on the website (available to members only) … NASCUS Report is taking a break next week; publication will return, as usual, the following week on Sept. 10. In the meantime: Have a safe and happy Labor Day holiday!
(Aug. 27, 2021) Credit unions seeking certification as community development financial institutions (CDFIs) can apply for NCUA’s streamlined qualification process between Sept. 12 and Oct. 15, the agency said this week.
The CDFI certification is open only to federally insured credit unions that hold the agency’s low-income credit union designation. Those certified are eligible to apply for financial and technical assistance awards from the Treasury CDFI Fund to support their work in low-income and underserved people and communities.
To qualify for the streamlined process, low-income-designated credit unions must register in the NCUA’s CyberGrants system and complete an online participation form. The agency said its Office of Credit Union Resources and Expansion will review each credit union’s products, services, and other indicators to determine whether the credit union qualifies for the streamlined certification application.
Qualified credit unions will be given the information they need to complete and submit the streamlined certification application to the CDFI Fund, the NCUA said. The CDFI Fund will make the final certification decisions.
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Streamlined CDFI Application Qualifying Round Opens Sept. 12
(Aug. 27, 2021) Card issuers required to supply credit card agreement terms and other data to the CFPB must make all submissions via the agency’s Collect website (collect.consumerfinance.gov) beginning in January, according to a notice providing new technical specifications for submissions.
According to the bureau, the Collect website has been available since July 2018 for those participating in the semiannual Terms of Credit Card Plans (TCCP) Survey, and 83% of survey submissions early this year were made via Collect.
The bureau outlined the website in a notice published Monday in the Federal Register.
The credit card plan submissions are made by selected card issuers under requirements of the Truth in Lending Act (TILA) and the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). Submissions include the semiannual Terms of Credit Card Plan (TCCP) Survey; quarterly credit card agreements; and annual reports related to college credit card marketing agreements and data.
In an email late last week, the bureau said card issuers will be required to use the Collect website for the following submissions on the dates noted and after:
(1) TCCP Survey data (for the Feb. 14, 2022), deadline,
(2) quarterly credit card agreement submissions (for the Jan. 31, 2022, deadline), and
(3) annual reports related to college credit card marketing agreements and data (for the March 31, 2022, deadline).
Issuers have until Nov. 1 of this year to register for Collect; those that have registered before to submit their TCCP Survey data will not need to register again.
To register, the bureau said, fill out and email the Collect registration form to [email protected]. (Download he registration form here.) Once card issuers receive their login credentials, starting on Dec. 1, they will be able to review their current submissions and make the required submissions for the fourth quarter of calendar year 2021 using Collect, the CFPB said.
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(Aug. 27, 2021) Concern over reports that nonfinancial corporations are not, in most cases, being offered alternatives to the soon-to-be-defunct LIBOR reference rate was expressed by leaders of agencies overseeing financial markets in a letter released this week.
The letter was signed by Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome H. (“Jay”) Powell, Securities and Exchange Commission Chair Gary Gensler, Federal Reserve Bank of New York President and CEO John C. Williams, and Commodity Futures Trading Commission Acting Chairman Rostin Behnam.
The communiqué followed up on a meeting among them and representatives of nonfinancial corporate stakeholders on the transition away from LIBOR, now scheduled for discontinuation at the end of this year (however, existing contracts will be allowed to use LIBOR until June 30, 2023).
“The transition is at a critical juncture, and we were thus concerned to hear your members report that nonfinancial corporations are, in most cases, not yet being offered such alternatives despite the short amount of time left in the transition,” the leaders wrote. “Accordingly, we invite you to continue to share your experiences and views with us as the transition, and the dialogue with your lenders, continues.”
In April, the nonfinancial corporate stakeholders – the Association for Financial Professionals, National Association of Corporate Treasurers, and the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness – wrote of their concern that non-financial corporates (NFCs) were challenged to obtain loan agreements based on alternatives to LIBOR, including the Secured Overnight Financing Rate (SOFR) even after those NFCs had indicated that loan agreements based on SOFR would be their preferred choice.
The group requested a meeting with the federal regulators to express their concerns in person.
(SOFR was developed by a group sponsored by the Federal Reserve the Federal Reserve Bank of New York; the Fed, including Vice Chairman for Supervision Randal Quarles, have said repeatedly that they recommend use of SOFR.)
The regulators agreed that the LIBOR transition presents operational, technological, accounting, tax and legal challenges to Main Street companies, and that firms
“The official sector has consistently supported a transition from LIBOR that leads to a more stable financial system, while also meeting the needs of all the parties who will be impacted by it, including nonfinancial corporate and noncorporate business borrowers, consumers, and investors, as well as financial institutions,” the letter from the regulators stated. “We have stressed the importance of reference rates built on deep, liquid markets that are not susceptible to manipulation.
“Although the official sector is not positioned to adjudicate the selection of reference rates between banks and their commercial customers, borrower preferences and needs clearly have a significant role to play in the selection of such rates,” the regulators wrote.
NCUA, for example, has not endorsed a specific alternative rate to LIBOR, including SOFR. LIBOR is used widely among credit unions for determining rates for adjustable rate mortgages and student loans.
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Treasury Department Releases Letter to Nonfinancial Corporate Stakeholders on LIBOR Transition