(Feb. 4, 2022) On a personal level, I thank Pat for his years of dedicated work supporting NASCUS, first on staff and then these past years as our outside editor of NASCUS Report. Week after week, Pat produced NR (as we refer to it on staff) expertly blending fresh reporting of relevant issues with the highlights of NASCUS’s work on behalf of the states and the credit union system. Most graciously, Pat delayed his desired retirement several times to provide NASCUS the time for its transition. Pat’s insight, knowledge of the financial services sector, thoughtfulness, and wry humor will be missed. We wish him the best.
I am pleased to announce that NASCUS Report’s editorial role will be assumed by NASCUS’s Senior Director of Communications and Marketing, Amanda Tuckey. As NASCUS Report is adjusted to Amanda’s style and touches, the quality you have come to expect will be unchanged. Watch for next Friday’s new NASCUS Report. And thank you for joining the NASCUS community every week when you open your edition of the NR.
Brian Knight
President & CEO
(Feb. 4, 2022) A reminder that federally insured credit unions must comply with rules governing disclosure in mortgage loans, particularly those meeting four criteria, is outlined by NCUA in a “regulatory alert” issued this week.
In its regulatory alert 22-RA-01 (Home Mortgage Disclosure Act Data Collection Requirements for Calendar Year 2022), NCUA said credit unions making the home loans, and meeting the four criteria, must comply with the CFPB’s Regulation C, which implements the Home Mortgage Disclosure Act (HMDA).
The agency stated that the rule requires credit unions (and other financial institutions) to collect HMDA data associated with mortgage loan applications processed during 2022 if the credit union:
- Has total assets of more than $50 million as of Dec. 31, 2021;
- Had a home or branch office in a Metropolitan Statistical Area on Dec. 31, 2021;
- Created at least one home purchase loan (other than temporary financing such as a construction loan) or refinanced a home purchase loan, secured by a first lien on a one-to-four unit dwelling during 2021; and
- Originated at least 100 covered closed-end mortgage loans in each of the two preceding calendar years (2020 and 2021) or at least 200 covered open-end lines of credit in each of the two preceding calendar years (2020 and 2021).
LINK:
Feb. 4, 2022 — The phrase “overdraft protection” does not appear in the “semiannual regulatory agenda” published this week by the CFPB in the Federal Register. But there may be more to come on that, in future, on that and other issues.
According to the agenda filed by the bureau, it expects that its new director – Rohit Chopra, confirmed last fall by the Senate – “will assess what regulatory actions the Bureau should prioritize to best further its consumer protection mission and that the Spring 2022 Agenda will reflect his priorities.”
Recently, Chopra has signaled that the agency is looking closely at overdraft programs. In December, the agency released a statement that three of the nation’s largest banks brought in more than two of every five dollars charged in overdraft fees in 2019, while smaller financial institutions – which charged less on average – were also heavily reliant on the fee income from the programs. In a statement, Chopra said then the bureau would be taking action “to restore meaningful competition to this market.”
However, he gave no timing for the action.
In the meantime, apparently, the bureau is continuing to work on other issues that may emerge in 2022 as rulemakings. Among them, according to the semiannual regulatory agenda published by the agency:
- Public availability from financial institutions of certain information from credit applications made by women-owned, minority-owned, and small businesses.
- Addressing the availability of consumer financial account data in electronic form.
- Certain regulations relating to “Property Assessed Clean Energy” (PACE) financing (a tool for consumers to finance certain improvements to residential real property).
- Quality controls for automated valuation models (AVMs), with other federal financial institution regulators
- Closing out its rulemaking over the discontinuation of LIBOR, in particular by helping “to ensure that any changes to an index underlying [certain] loans (including home equity, student, reserve mortgages and others) as a result of the transition to a different index due to the discontinuation of LIBOR are done by industry in an orderly, transparent, and fair manner.”
LINK:
CFPB Semiannual Regulatory Agenda
(Feb. 4, 2022) FDIC Board Chairman Jelena McWilliams is scheduled to step down today (Friday, Feb. 4), following through on the announcement she made late last month.
In her resignation letter submitted to the White House on New Year’s Eve, McWilliams gave no indication why she was resigning, three-and-a-half years into her five-year term (she was nominated by President Donald Trump [R] in December 2017 and confirmed by the Senate in late May 2018).
Since then, the White House has been silent about who will succeed McWilliams, either as a permanent chairman of the agency’s board or as an acting chairman to take over after she leaves today. The only member of the agency’s board who was appointed (and confirmed by the Senate) specifically to serve on the panel is Board Member (and former chairman) Martin Gruenberg, a Democratic appointee. He is serving in a “holdover” capacity since his term expired in December 2018. Unless he resigns, he may remain on the board until a successor is confirmed by the Senate.
Meanwhile, McWilliams received a note of acknowledgement from her regulatory colleagues at NCUA with a joint statement signed by all three board members.
NCUA Chairman Todd M. Harper said he had “seen firsthand the expert knowledge, considerable skill, and strategic insights she provides in issues and making decisions.” Vice Chairman Kyle Hauptman said McWilliams is “an inspiring example of the American dream, an immigrant from a statist regime who then achieved here at the highest levels.” Board Member Hood said she “played a pivotal role in creating an effective regulatory environment for the U.S. banking system.”
LINK:
NCUA’s Harper, Hauptman, and Hood Commend Chairman McWilliams for Her Service to the FDIC
(Feb. 4, 2022) This issue of NASCUS Report is my final offering as editor of the publication, a tenure that began in 2015. This issue also represents the completion of my formal career — which started in 1984 — in the credit union movement. Over that time, I have worked for all three national credit union organizations: the two trade associations and the professional association that is NASCUS.
I’m ending my role as editor to enter a more fulsome retirement, which I started about three years ago, when I relocated from the Washington, D.C., area to my home state of Arizona.
Much has changed in the credit union system (as many call it now) since I came on board and is likely to continue changing over time. There are now about 18 times more assets, and more than 2.5 times more members, in the nation’s credit unions than there were in 1984. However, the total number is approaching only about 25% of the number of credit unions there were 38 years ago.
The asset and membership growth is nothing short of fantastic, an acknowledgment of enlightened guidance by credit union management and boards, and careful, effective supervision by the states and NCUA.
But the decline in the number of credit unions (which, in many ways, parallels the contraction of small, “community” banks) is of concern – especially since much of the shrinkage has come from the hollowing out of small credit unions, once the heart and soul of the movement/system.
So also of concern is the inability of credit unions, despite their growth, to capture more market share among financial services providers. That portion still hovers around 12% (according to the Federal Reserve’s January 2022 Consumer Credit/G.19 report), and is under increasing pressure from ever-dominant banks and, nowadays, the rise of fintechs as alternatives to traditional credit unions and banks.
The challenge ahead to grow market share, and deal with the shrinkage of the number of small credit unions, is daunting but worth the effort. I hope the credit union movement/system figures out a way to deal with both.
To close: It has been a great privilege to work with state regulators (and credit unions – the state system) over the past seven years of my NASCUS tenure. State regulators are unique: not only do they work with NCUA, but with all the banking regulators (state and federal). They see it all; they have a voice; it matters.
My thanks and appreciation to NASCUS President and CEO Brian Knight, and the exceptional association staff – as well as the organization’s leadership — for their support and guidance. Thanks, especially, to former NASCUS leader Lucy Ito for giving me the opportunity to work for the state system.
My thanks also to those readers who read NASCUS Report; I hope you have found it helpful.
Patrick Keefe
NASCUS Report editor
(Feb. 4, 2022) Less than two weeks from now, the nominations of those testifying this week – along with two other Fed nominees – will be considered in vote by Senate Banking Committee, the panel announced this week.
The committee said it would hold a vote Feb. 15 on the nominations of Raskin, Cook and Jefferson, as well as on the nominations of Jerome H. (“Jay”) Powell and Lael Brainard, for chair and vice chair of the Fed Board, respectively. If confirmed, Powell and Brainard would serve in those positions until February 2026. Their terms on the board run to 2028 and 2026, respectively. The other three, if confirmed, would serve terms that end in 2032 for Raskin, 2024 for Cook, and 2036 for Jefferson. Raskin’s term as supervision vice chair, if confirmed, would end in 2026.
There will be six votes when the panel meets at mid-month – which includes two, separate votes for Raskin as a board member and vice chair.
(Feb. 4, 2022) NASCUS has endeavored, since its inception, toward the ideal that “we become a better version of ourselves when we come together,” NASCUS President and CEO Brian Knight said this week in honor of the opening of Black History Month throughout February.
“We join with our peers throughout the credit union movement in celebrating Black History Month and recognizing the immeasurable contributions of the African Diaspora to the credit union system and the nation at large,” Knight said in a statement.
He also indicated that more time should be dedicated for acknowledgements. “The need to understand the value and contributions of all communities should be a year-round, lifelong commitment to the inclusion of everyone’s stories into the fabric of our shared history,” he said.
LINK:
NASCUS’s Statement on Celebrating Black History Month
(Feb. 4, 2022) Three nominees for seats on the Federal Reserve Board sat before the Senate Banking Committee Thursday to face questions on their nominations to the agency leadership.
Sarah Bloom Raskin, vice chairman for supervision and member designate, Lisa DeNell Cook, member designate, and Philip Nathan Jefferson, member designate all testified at the hearing. All three were nominated to the seats just two weeks ago by President Joe Biden (D).
Of the three, Raskin is generating the most chatter, largely in opposition from Republican senators. A former member of the Fed Board, and a deputy Treasury secretary, she has been confirmed by the Senate twice before on voice vote, the most recent in 2014. However, Raskin has been forthright in her support of financial regulation’s role in dealing with climate change; some of the senators see no role for a financial regulator in that area.
If confirmed for the board seat – and the position as vice chair for supervision, a separate vote – Raskin would be just the second person to hold the job. The first was Randal Quarles, who stepped down last month from his seat on the Fed Board – after his four-year term as supervision vice chair ended in October. He had sat on the board since 2017.
Raskin is also a former Maryland state regulator and the spouse of U.S. Rep. Jamie Raskin (D-Md.). During the hearing, she reflected on her time as a state regulator in 2008, calling bankers in her state “my indispensable partners.”
Also during the hearing Thursday, Raskin faced questions about her past positions and writings on climate change (particularly on bank lending to oil and gas companies). She did tell senators, however, that “it is inappropriate for the Fed to make credit decisions and allocations,” and that “banks choose their borrowers, not the Fed.”
Cook, who is African American, also heard criticism from Republican senators for her views on racial inequality and use of Federal Reserve policy to address those issues.