(Jan. 29, 2021) In addition to the three summaries of NCUA actions, NASCUS this week also posted a new summary of CFPB recent actions – this one on the bureau’s final rule on debt collection practices related to time-barred debts. The summary is available to members only.
Under the final rule, debt collectors are banned from making calls or taking other “non-litigation means” to collect on debt that is beyond the statute of limitations unless it is disclosed during an initial contact that the debt is, in fact, past the time limit. The final rule also requires the debt collector to inform the consumer that the statute of limitations on the debt has expired during any required validation.
The bureau has said that its own research has found that a time-barred debt disclosure helps consumers understand that they cannot be sued if they do not pay, which it noted can help consumers make better-informed decisions whether to pay the debt or not.
LINK:
NASCUS Summary: CFPB Rule on Debt Collection Practices (Time-Barred Debts)
Principles for assessing the financial stability efforts of federal oversight bodies – by third parties and on their own behalf – were published in a report Thursday by the Government Accountability Office (GAO).
The framework contains six components containing 18 key principles and related standards. It provides criteria for assessing the financial stability efforts of the Financial Stability Oversight Council (FSOC) and its member agencies (including NCUA), the GAO said.
GAO said the framework reflects consideration of its prior work and other relevant literature, internal control and risk-management standards, and discussions with a wide array of stakeholders. The components of the framework include mandate and scope; governance; risk assessment; risk mitigation; evaluation; and data and information.
“The framework principles reflect governance and operational standards and practices that, if met, promote sound decision-making around financial stability policy,” the report states. “As such, it is intended as a resource not only for GAO, but also for FSOC and its member agencies (in developing and implementing financial stability policy), the Inspectors General community (in overseeing FSOC and its member agencies’ activities), and Congress (in considering legislation related to financial stability). In addition, the framework may be used by legislators, regulators, and auditors in public-sector roles in other countries as well as by observers and analysts in the private sector.”
(Jan. 29, 2021) NASCUS summaries of recent NCUA letters to credit unions – and a summary of a regulatory alert issued by the agency – are among the latest to be published by NASCUS. All three are available to members only.
The two letters summarized are on the agency’s outline of the issues affecting credit unions contained in the Consolidated Appropriations Act, 2021 adopted by Congress Dec. 27 (letter 21-CU-01, issued by the agency the week of Jan. 4), and about NCUA’s Supervisory priorities for 2021 (letter 21-CU-02, issued by the agency last week).
The first letter notes that that most of the provisions of the consolidated appropriations bill extend portions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law last March as the impact of the coronavirus crisis became apparent. Those provisions are extended to Dec. 31, 2021, the letter notes. It also touches on provisions affecting the agency’s Central Liquidity Facility (CLF), troubled debt restructurings (TDRs), compliance with the Current Expected Credit Loss (CECL) accounting standard and more.
The second letter outlines the broad scope of the agency’s regulatory priorities for 2021, primarily focusing on challenges to credit unions posed by the ongoing coronavirus pandemic and steps to enhance the agency’s offsite monitoring of credit unions’ conditions. Additionally, the letter states that examiners will not be assessing credit unions’ efforts to transition to the CECL standard “until further notice.”
The summary of the regulatory alert (21-RA-01), released by NCUA earlier this month, outlines the agency’s view of CFPB’s action late last year to issue two final rules amending the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) in Regulation Z. The final rules would replace the 43% debt-to-income (DTI) ratio limit with price-based thresholds (under the bureau’s general QM final rule), and create a new category of qualified mortgage (known as the seasoned QM final rule).
LINKS:
NASCUS Summary: LTCU 21-CU-01, Summary of the Consolidated Appropriations Act 2021 (members only)
NASCUS Summary: LTCU 21-CU-02, NCUA’s Supervisory Priorities (members only)
NASCUS Summary: Regulatory Alert 21-RA-01: CFPB Amends Ability-to-Repay/QM Rule under TILA (members only)
(Jan. 29, 2021) The new acting director of the CFPB said in a statement released Thursday that the bureau will be taking “aggressive action” in response to cases where financial providers have violated COVID-19-related consumer protections. Making public a statement he provided to staff last week, Acting Director Dave Uejio included COVID-19 relief for consumers as one of two priorities he has for the bureau; the other is racial equity … Just a reminder that Jan. 31 (Sunday) is the deadline for filing federally insured credit unions to file their fourth quarter 2020 call reports with NCUA. Also to be updated by that date: the Credit Union Profile, which includes (among other things) information that infrequently changes (including emergency contact information, information systems and technology, member programs and services, and more) … The Virginia State Corporation Commission, Bureau of Financial Institutions, is recruiting for multiple credit union examiner positions. More details available through the NASCUS State Job Announcements page (see link below) … Eligible credit unions interested in the Treasury Department’s Emergency Capital Investment Program can get more information during an upcoming webinar hosted by NCUA next Wednesday (Feb. 3) starting at 2 p.m. Eastern. The one-hour program will discuss the program’s eligibility and application requirements; the financial instrument and terms used for the investment, and whether credit unions can use the investment as secondary capital.
Call Report Filing Deadline for the December 31 Call Report Cycle
NASCUS State Job Announcements
NCUA webinar on Treasury Emergency Capital Investment Program
(Jan. 29, 2021) On behalf of the state system, NASCUS President and CEO Lucy Ito congratulated new Chairman Harper, noting his experience with credit unions.
“State regulators and credit unions recognize the breadth and depth of his knowledge of the consumer financial services market and his dedication to a robust dual chartering framework that ultimately benefits members of both state and federal credit unions,” Ito said in a press statement. “Working together, we hope to achieve our shared objectives of a safe, sound and strong credit union system that can innovate and grow in the interests of our members.”
The NASCUS leader also extended thanks to former Chairman Hood for working with the state system over the past two years. “We are especially grateful for his support of the 2019 Document of Cooperation between NCUA and NASCUS which provides a durable roadmap for federal-state partnership,” she said.
Finally, Ito said the state system looks forward to working with Vice Chairman Hauptman, who also serves as the NCUA Board liaison to NASCUS, “particularly as both NASCUS and the agency foster collaboration and alignment between state and federal regulators and the whole NCUA Board.”
(Jan. 29, 2021) Most consumers with savings would pay down some credit card debt but would also preserve a savings cushion rather than spend all of it retiring the balance, according to the results of an “online experiment” released by CFPB this week.
The findings of the study, according to the bureau, suggest that participants want to preserve a savings cushion. “In nine of the 10 hypothetical savings scenarios, fewer than half of participants put the maximum amount of savings toward debt reduction,” according to a release from CFPB. ”Only in the hypothetical scenario where savings was double the size of the debt ($10,000 versus $5,000), did even a majority of participants—77% —eliminate credit card debt.”
More than 90% of participants used at least some of the savings to pay down credit card debt, CFPB said, adding that suggests participants wanted to reduce debt. The agency said that, on average, participants allocated more than half of the savings they could to debt reduction, even among those assigned to the scenario with the lowest amount of savings.
“This study provides a valuable first step to understanding how consumers balance goals of preserving a savings cushion and pursuing debt reduction,” the agency said in the release. “Our results suggest that the savings-debt trade-off is a balancing act, with most participants in the hypothetical scenarios allocating some of the savings to debt reduction (50 to 85%) while preserving the rest as a savings cushion.”
LINK:
Balancing savings and debt: Findings from an online experiment
(Jan. 29, 2021) Todd M. Harper is now the NCUA Board chairman, succeeding Rodney Hood in the position, as the result of designation by President Joe Biden early this week. Harper is the 12th person to be chairman of the federal credit union regulator board.
“The credit union system now sits at the intersection of several crossroads, and the agency faces many decisions ahead related to the economic fallout of the COVID-19 pandemic and the need to advance economic equality and justice,” Harper said in a statement issued the day his designation was announced. “As NCUA Board Chairman, I will continue to focus on four policy priorities: capital and liquidity, consumer financial protection, cybersecurity, and diversity, equity and economic inclusion. Each of these priorities are vital in responding to current economic and marketplace realities.”
Prior to joining the NCUA Board, Harper served as director of the agency’s Office of Public and Congressional Affairs and chief policy advisor to former Chairmen Debbie Matz and Rick Metsger. He is the first member of the NCUA staff to become an NCUA Board member and chairman. Before joining the agency, he worked for the U.S. House of Representatives as staff director for the subcommittee on capital markets, insurance, and government-sponsored enterprises and as legislative director and senior legislative assistant to former Rep. Paul Kanjorski (D-Pa.).
Harper was confirmed by the Senate as a member of the NCUA Board in April 2019. His term expires in just about two months (in April), but he can continue to serve in a holdover capacity until a successor is confirmed.
But Harper is the lone Democrat on the board, serving alongside Republican appointees Hood and Vice Chairman Kyle Hauptman. Because he is the only Democrat, it’s likely that the White House will keep him in the seat until at least another position opens on the board. That may be a while, however: the term of Hood (who remains on the board as a member) ends in August 2023, and Hauptman’s in August 2025.
Hood and Hauptman also released a statement this week congratulating Harper, with Hauptman saying he looked forward to working with the new chairman “to provide a regulatory framework that helps credit unions meet the evolving needs of members,” and Hood saying he would work in partnership with both board colleagues to address the impact of COVID-19 on credit unions, and other things, “in a bipartisan manner.”