(Oct. 1, 2021) Rohit Chopra is now the permanent director of the CFPB, with a five-year term, thanks to a 50-48 vote by the Senate on Thursday. He took a big step toward that vote earlier in the day when the Senate voted 51-50 – with Vice President Kamala Harris casting the tie-breaking vote – to cut off debate and proceed to the final vote on confirmation. Chopra replaces acting director Dave Uejio – who himself has been nominated to be assistant secretary for fair housing and equal opportunity at the Department of Housing and Urban Development (HUD) … NASCUS President and CEO Lucy Ito will be on the panel discussing “How to Increase Gender Diversity in the C-Suite” Nov. 3 (at 2:15 p.m.) as part of NCUA’s Nov. 2-4 Diversity, Equity and Inclusion (DEI) Summit. The panel – made up of all female credit union executives – will discuss successes and setbacks on their paths to leadership, according to NCUA. They will also discuss how to increase gender diversity in the upper ranks of financial institutions. Other panelists include CEOs of NASCUS-members Orange County’s CU and Navy Federal CU – Shruti Miyashiro and Mary McDuffie, respectively.
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(Oct. 1, 2021) Credit unions may begin submitting data on credit card agreements with their members, and applying data submission requirements, to the CFPB’s website for collecting credit card information, NCUA said this week.
In a “regulatory alert,” the agency said credit unions may begin submitting data to the bureau’s “Collect” website using submission deadline dates of:
- Feb. 14, 2022, for terms of credit card plans (TCCP) survey data;
- Jan. 31, 2022, for quarterly credit card agreement submissions;
- March 31, 2022, for annual reports related to college credit card marketing agreements and data.
On Aug. 20, the consumer bureau issued new technical specifications for complying with credit card agreement and data submission requirements under the Truth in Lending Act (TILA) and the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. In the specifications, the bureau said all submissions would be made via the agency’s Collect website beginning in January.
The Collect website has been available since July 2018 for those participating in the semiannual TCCP Survey. According to the bureau, 83% of survey submissions early this year were made via Collect.
NCUA, in the letter, reminded that credit unions selected to participate in the TCCP Survey or are required to submit an annual report of college student credit card agreements can register now. Any credit union with 10,000 or more credit card accounts as of any quarter-end is required to make quarterly credit card submissions to the CFPB, the credit union regulator said, and must register for Collect by Nov. 1, 2021.
“Once a credit union receives its login credentials, it will be able to review its current submissions and make the required submissions for the fourth quarter of calendar year 2021 starting on Dec. 1, 2021,” NCUA said.
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(Oct. 1, 2021) While not outright supporting the idea of an expanded NCUA Board membership, the chairman of the current board noted that there are some upsides to the idea during testimony Thursday at a Senate confirmation hearing.
NASCUS and the state system have long called for an expansion of NCUA Board from its current three members to five – and for requiring that at least one member of the board have state credit union regulator experience.
At the hearing, during questions to him from Sen. Steve Daines (R-Mont.) at the Senate Banking Committee hearing on NCUA Board Chairman Todd Harper’s nomination to a full term on the NCUA Board (and to continue as chairman), Harper acknowledged that there are two sides to expanding the membership of the NCUA Board.
“Certainly a disadvantage of going to a larger board would be higher costs for that board and perhaps slowing down the process,” Harper said. “On the flip side of that, though, it would create more voices at the table in order to have more informed decision making.”
Harper also noted “that state regulators have long called for an increase in the size of the NCUA board.” He also pointed out that, adding more members to the board could change a structural defect that limits communications among board members.
“The sunshine act rules make it difficult for me to talk one-on-one with my fellow board members because when you have a three-member board, two people talking together is a majority and you have to notice that,” he said, referring to publication of board meetings for public review in the Federal Register. “A larger board would facilitate the board-member-to-board-member interaction.”
Daines seemed to be open to the idea of an expanded board, saying he appreciated Harper’s view. He said “looking at the reality” of how many members the agency board has had since its 1979 inception (22), and a four-year run of having only two board members during the last decade, “there’s an argument for considering making the board larger.”
Any change in the size of the NCUA Board would require a change in the Federal Credit Union Act; there is currently no legislation before Congress calling for that.
Harper was nominated last month by President Joe Biden (D) to a term on the NCUA Board ending in 2027; the White House has indicated Harper will continue as chairman. Harper’s nomination is somewhat a first among NCUA Board members as he is essentially succeeding himself (he is now serving in a “holdover” status as the term he was serving officially ended in April).
Harper was one of three nominees to appear on a panel before the Banking Committee hearing Thursday; the other two are nominees to the Export-Import Bank (Exim Bank) of the United States. (They are: Judith DelZoppo Pryor as first vice president, and Owen Edward Herrnstadt as a member of the bank’s board.)
All three were repeatedly congratulated by senators from both parties on their nominations; none publicly voiced opposition to any of their nominations.
(Oct. 1, 2021) “Critical information” for compliance with expiring pandemic-era protection programs for homeowners are addressed in a letter to credit unions from NCUA this week.
The letter (LTCU 21-CU-09), sent to all federally insured credit unions, provides lenders and mortgage servicers with the information. Among the key points noted:
- The deadline was Thursday (Sept. 30) to grant forbearance through provisions of the Coronavirus Aid Relief and Economic Security Act (CARES Act). Section 4022 of the act, as amended, the agency noted, provides homeowners with federally backed mortgages the option to temporarily suspend their monthly mortgage payments up to 18 months. Borrowers who have not previously been in forbearance have until Thursday to request assistance.
- 4013 CARES Act loans may be modified – including forbearance – until Jan. 1 without designating the modification as a “troubled debt restructuring” (TDR) under certain criteria. Those include: the loan existed before Dec. 31, 2019; the modification is related to COVID-19; the borrower was less than 30 days past due as of Dec. 31, 2019; and the modification is executed between March 1, 2020 and the earlier of Jan. 1, 2022, or 60 days after the date of termination of the national emergency concerning COVID–19 outbreak declared by the president on March 13, 2020.
- The moratorium foreclosure expired July 31. However, the agency pointed out, the Consumer Financial Protection Bureau (CFPB) recently issued a final rule temporarily amending certain mortgage servicing requirements under Regulation X to assist borrowers affected by COVID-19. “Among other amendments, the final rule establishes temporary special COVID-19 loss mitigation procedural safeguards to ensure that a borrower has a meaningful opportunity to pursue loss mitigation options,” the letter states. It adds that, between Aug. 31 and year’s end, a servicer must meet at least one of the specified safeguards before initiating any judicial or non-judicial foreclosure processes where a borrower became more than 120 days delinquent on or after March 1, 2020.
- Although the eviction moratorium expired Thursday, its aim, the letter notes, is to keep people in their homes even after the home has been foreclosed.
The letter also outlines other homeowner and renter assistance programs, which NCUA said provides nearly $10 billion in assistance to keep owners in their homes. The money may be used, NCUA pointed out, for mortgage payments, utilities, insurance, and other needs.
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(Oct. 1, 2021) Other key moments of the Harper nomination hearing included:
- Harper again endorsed third-party vendor exam authority for NCUA (which would require a statutory change). “Bank regulators have authority to go into third-party vendors; NCUA does not,” Harper said in response to questions from Sen. Jon Ossoff (D-Ga.). Harper, as he has before, called lack of that authority “a blind spot” for NCUA. He told the senator NCUA is working on a white paper on the subject that Harper will provide to Ossoff if confirmed. (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.)
- The NCUA Board chairman indicated to Sen. Tina Brown (D-Minn.) that credit unions in all communities – large and small, urban and rural – should be cognizant of risks presented by climate change. He said NCUA must consider storms and all material risks that occur as a result of climate change, including such risks as credit unions attached to a particular industry that is facing structure changes due to climate change, or credit unions in areas of high concentration of agricultural areas where crops are affected by climate change.
- A commitment by Harper for “more specialized training” of examiners working in agricultural areas to assess risks particular to those areas, in response to comments by Sen. Kevin Cramer (R-N.D.). “One of the complaints I hear from credit unions in ag lending is ‘our [NCUA] examiners, they don’t know the particular crop; they don’t know how this farm works.’ That is something certainly I would commit to you, if confirmed, to working with you to make sure that we get more specialized training for our examiners and help in our exams in that way.”
- On repeated questions about his views of a proposal that credit unions and banks report to IRS the deposits and withdrawals made by members to determine their tax liability, Harper repeatedly answered that, while he was aware of the proposal, he hadn’t looked at it in detail and indicated he couldn’t render an opinion on it. He did say there would be administrative costs – but wouldn’t characterize how big (or small) those would be. He asked if he could get back to the panel members who inquired about it after he’s had more time to study the proposal, which has been roundly criticized by credit union industry trade groups.
(Oct. 1, 2021) Payments systems, digital currencies, transition by large credit unions to specialized oversight by NCUA, the evolution of mortgage servicing in the wake of the Great Recession, and climate change were all topics for discussion between larger credit unions and state regulators at the first Credit Union and Regulator Engagement (CURE) event this week.
Sponsored by NASCUS and made possible, in part, by the Dual Charter Resource Initiative (DCRI), the inaugural CURE event brought together 28 credit union leaders, regulators and others from several states (including California, Iowa, Illinois, New York, North Carolina, Oregon, Washington and Wisconsin).
Participants attend by invitation only; leaders of state-chartered credit unions with assets of $4 billion – $10 billion are eligible to be invited.
Speakers at the inaugural CURE event included: Dr. Nina Chen, New York State Department of Financial Services director of sustainability and climate initiatives; Chuck Cross, CSBS SVP of nonbank supervision and enforcement section; Diana Dykstra California/Nevada Credit Union Leagues president and CEO; Dan Gonzalez, Federal Reserve Bank of Chicago vice president; Scott Hunt, director, NCUA Office of National Examinations and Supervision (ONES); Sharmynn Powell, Eastern Caribbean Central Bank chief risk officer; Meredith Ritchie, Alliant Credit Union SVP, general counsel and chief ethics and government affairs officer, and and Ken Schaafsma, Alliant Credit Union chief risk officer.
“The group was highly engaged in the topics at hand, as well as with each other,” said NASCUS’ Ito. “It was terrific to see differing points of view being brought to the table to better the industry.”
She said, for example, the group worked together to consider potential issues associated with climate change as a safety and soundness issue for credit unions. That included the very real threats of fires, floods, sea-level rise, and environmental catastrophes, and the effect of those events on future access to insurance and lending decisions. Also compelling, Ito said, were views expressed on the challenges of quantifying risk related to climate change, exercising proportionality in imposing reporting requirements on smaller financial institutions versus international banking entities, and reaching uniform standards between federal and state programs. “There was a common theme of ‘stronger together’ consistent with each discussion,” Ito said.
CURE is one of the initiatives sponsored by NASCUS and the DCRI, a partnership between the state system and key organizations within the credit union system at large committed to strengthening the state credit union charter by pursuing progressive legislation and regulation, building relationships to foster charter innovation, guarding against unnecessary federal pre-emption and expanding awareness of options available to state-chartered credit unions.
The next NASCUS/DCRI-sponsored event is the Exchange, Nov. 1-2 in Phoenix (an invitation-only event for regulators and leaders from credit unions with more than $10 billion in assets).
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NASCUS Launches Dual Charter Resource Initiative
(Oct. 1, 2021) Noting Harper’s comments about changes to the NCUA Board, NASCUS President and CEO said mandating that at least one board member have state credit union regulatory experience should be part of the conversation. “A board member who has served as a state credit union regulator would ensure that the state perspective is considered in the board’s deliberations, establishing diversity of voices and better fostering a robust dual charter system,” she said. “State-chartered credit unions now represent more than 50% of all credit union assets nationwide. Most state-chartered credit unions are federally insured. Without at least one board member with state credit union regulatory experience, NCUA has on occasion been prone to a federal credit union bias as the chartering body for federal credit unions.”
On third-party vendor authority, Ito reiterated NASCUS’ support for it, as long as NCUA relies on state exams for technology services providers where the authority exists. Further, she said, NASCUS supports efforts to strengthen state regulatory exam and supervision of third parties providing services to state-chartered credit unions.
(Oct. 1, 2021) More time – 30 days – is allowed for comments on NCUA’s request for information (RFI) about the impact of activities connected to digital assets and related technologies, according to a notice published this week in the Federal Register.
The original comments-due date was Monday (Sept. 27).
The request for information (RFI), was first issued in July by the NCUA Board. It highlights the agency’s interest in the impact of distributed ledger technology (DLT, such as blockchain) and decentralized finance (DeFi).
The RFI poses more than two dozen questions over five subject areas: the use of DLT and DeFi applications within the credit union system; development of such projects with third-party relationships or credit union service organizations (CUSOs); risk and compliance management; supervision, including whether and how regulation should be revised to address such activities; and share insurance and resolution – including, among other things, how to distinguish between uninsured digital assets and insured shares.
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