(Jan. 14, 2022) There will soon be three vacancies on the governing board of the nation’s central bank, as the current vice chair resigned, effective today (Jan. 14). Citing only the fact that his term as Federal Reserve Board member expires at the end of the month, Vice Chair Richard Clarida tendered his resignation to the White House from the agency leadership. His resignation will leave three empty seats on the seven-member board. Also empty: the role filled by a sitting governor as vice chair for supervision (vacant since Randal Quarles resigned last month). Lael Brainard has been nominated to replace Clarida as board vice chair; a confirmation hearing was held for her Thursday. If confirmed, her term in that role would run to 2026, the same year her Fed board chair term ends … Meanwhile, in his own confirmation hearing for a reappointment (for a four-year term) as Fed chair, Jerome H. (“Jay”) Powell said that, if confirmed, the Fed “will remain vigilant about new and emerging threats” to financial stability. He also said the agency, while he has been chair, intensified its focus and supervisory efforts on evolving threats such as climate change and cyberattacks, and improved public access to instant payments.
(Dec. 23, 2021) The moratorium on federal student loan payments is extended through May 1, the Biden Administration announced Wednesday, pushing the deadline back from its previous end point of Jan. 31. The White House said the spread of the omicron variant of the COVID-19 virus prompted the extension … Landlords and mortgage servicers with military servicemembers and veterans as tenants and clients were put on notice about housing protections enacted for servicemembers during the coronavirus crisis in letters sent this week from the CFPB and the Department of Justice. In their joint letters, the agencies said they reminded landlords and mortgage servicers of important legal housing protections for military families. They noted that some servicemenbers “may have had to relocate or make other changes to their housing arrangements in response to the crisis,” the agencies said. “While military families enjoy the same legal protections and privileges afforded to all other homeowners and tenants, they also have additional housing protections under the Servicemembers Civil Relief Act (SCRA), which is enforceable by the DOJ and servicemembers themselves” … Federal banking regulators, along with federal securities industry and housing supervisors, have decided to leave unchanged their definitions of qualified residential mortgage (QRM), the community-focused residential mortgage exemption, and the exemption for qualifying three-to-four-unit residential mortgage loans under their 2014 federal credit risk retention regulations. The decision was based on a review of the rules that began in 2019; the agencies said they have decided, “at this time, not to propose to amend the definition of QRM, the community-focused residential mortgage exemption, or the exemption for qualifying three-to-four-unit residential mortgage loans” … A fourth new federal credit union (FCU) charter for the year, which would offer services to the community of Eatonville, Fla., was announced this week by NCUA. Eatonville FCU is sponsored by the Macedonia Missionary Baptist Church Eatonville Florida, Inc. NCUA said the new credit union is the first federally insured financial institution in the community. It has the agency’s low-income designation and may also qualify as a minority depository institution, NCUA said … This issue of NASCUS Report is the final one for 2021; we’re taking a week off next week for the holidays. The next issue of NASCUS Report is scheduled for Jan. 7. Until then: have a terrific Christmas and here’s to a happy New Year!
(Dec. 10, 2021) The latest version of the National Defense Authorization Act (NDAA) – must-pass, annual legislation that includes funding for the military, among other things — does not include the SAFE Banking Act, which would allow credit unions to serve legal cannabis-related businesses in states that have legalized cannabis. The House has previously passed an NDAA version that included the SAFE bill; however, that provision ran into trouble gaining support by Senate leaders. NASCUS has strongly supported adoption of the bill … NASCUS sent to credit union and associate members their 2022 membership dues invoices this week. NASCUS primary points of contacts should look for an email from Shellee Mitchell, Program Specialist. If you do not receive your invoice by next week, please let Shellee know at [email protected] NASCUS appreciates the ongoing support from our membership, and we look forward working with you in 2022.
(Dec. 3, 2021) Mountain West Credit Union Association President and CEO Scott Earl announced his retirement this week, saying he will step down at the end of June next year. He has been leader of the association, which represents Arizona, Colorado and Wyoming, since 2011 … While inflation is expected to ease off, a chance of persistently high inflation could lead Federal Reserve policymakers to increase interest rates, placing credit unions in the position of paying closer attention to interest-rate risk, NCUA Board Chairman Todd Harper said this week. Speaking to state association/league leaders via a remote broadcast, Harper said that – although the yield curve is expected to steepen — a flat yield curve would put downward pressure on credit union net interest margins. “The ability to manage interest rate risk will remain a crucial determinant of credit union performance going forward,” Harper said. “To remain on a sound footing, credit unions will also need to continue to pay careful attention to capital, asset quality, earnings, and liquidity” … New debt collection rules adopted by CFPB earlier this year went into effect this week, the agency noted in a blog entry, laying out key points to know about the regulation. According to bureau, the new rules clarify how debt collectors can communicate with borrowers, including what information they’re required to provide at the outset of collection about the debt. The agency said the rules also outline rights of borrowers in debt collection, and how they can exercise those rights … Don’t forget next week’s (Dec. 9 at 2 p.m. ET) NASCUS 101 — a free, short webinar where participants learn from the NASCUS team how to make the most of an association membership. Among the topics addressed: What NASCUS is, how NASCUS contributes to the entire credit union industry, how to engage in the regulatory and legislative processes, collaboration with peers, committee and working group involvement, customized communications and more. The webinar is open to all members and prospective members. While it is free to participate, registration is required … Welcome to NASCUS membership Michigan State University Federal Credit Union of East Lansing; led by president & CEO April Clobes; the credit union holds $6.5 billion in assets.
LINK:
Understand how the CFPB’s Debt Collection Rule impacts you
Register here for NASCUS 101, Dec. 9, 2 p.m. ET.
(Nov. 12, 2021) NCUA late last week placed the tiny Pomona Postal FCU of Pomona, Calif., into conservatorship, saying the credit union’s most recent call report shows it had 717 members and $4.2 million in assets. The 57-year-old credit union had about a 51% loan-to-share ratio, according to NCUA data … Bob Gallman, president and CEO of the Louisiana Credit Union League since 2017, has announced his retirement, effective next March; he has notched more than 45 years in the credit union system … Guidance for dealing with climate change risk management “supervisory expectations” will be released this year, the acting comptroller of the currency said this week. “We expect to issue framework guidance by the end of this year, to be followed next year with detailed guidance for each risk area,” Acting Comptroller Michael J. Hsu said. “The detailed guidance will build on a range-of-practices review that will launch this week, industry and climate groups’ input, and lessons from other jurisdictions” … Providing “relevant and timely information” specifically for examiners and financial institution practitioners is the aim of a revamped notification system announced this week by the FFIEC (which, since April, has been chaired by NCUA Chairman Todd Harper). According to the Exam Council, its “FFIEC Announcements” email notifications will be distributed to the council’s email subscribers notifying them of updates to its website and “Infobases.” Each issuance, the council said, will be designated with the word “Announcement” in the header, followed by a sequential numbering order of a four-digit year and a two-digit issuance number. See the link for more or to sign up.
LINKS:
NCUA Places Pomona Postal Federal Credit Union Into Conservatorship
Acting Comptroller Discusses Climate Change Risk
FFIEC Implements New “Announcements” Communication Tool
(Oct. 22, 2021) “FedNow” – the Federal Reserve’s much-anticipated (and delayed) round the clock payment system – will be ready “sooner rather than later,” Federal Reserve Bank President Esther George (the “executive sponsor” of the Fed initiative) told a bankers’ group Tuesday, reiterating that a 2023 debut is on track. Her comments confirmed an announcement by the Fed made in February, also targeting 2023 as the debut for the system. Originally, the Fed had set the system’s debut for as late as 2024 … Likely in response to strong political pressure brought by both the credit union and banking industries, the Treasury this week raised the proposed threshold to $10,000 for reporting of balances at accounts held at credit unions and banks to the IRS. The banking industry immediately rejected the amended proposal (as it had the previous threshold of $600 or more). Under the proposal, meant to find and track account holders who are not paying their taxes, credit unions and banks would have to provide data on accounts with total annual deposits or withdrawals worth more than $10,000, not including payroll and beneficiary deposits … Large technology companies operating U.S. payments systems were ordered this week by the CFPB to provide information on their business practices, which CFPB said would help it better understand how the firms use personal payments data and manage data access to users in order to ensure adequate consumer protection. CFPB said the initial orders were sent to Amazon, Apple, Facebook, Google, PayPal, and Square. CFPB said it will also be studying the payment system practices of Chinese tech giants, including Alipay and WeChat Pay.
LINKS:
Statement by Secretary of the Treasury Janet L. Yellen on Congressional Tax Compliance Proposals
CFPB Orders Tech Giants to Turn Over Information on their Payment System Plans
(Oct. 15, 2021) California legislation was signed into law this week, the California and Nevada Credit Union Leagues reported. The new law for state credit unions: allows expulsion of members for abusive behavior; simplifies how an expelled member may appeal; allows non-member deposits from other credit unions (giving CA CUs parity with FCUs and low-income designated credit unions); makes changes to how audit committees are governed; and makes other technical changes … Two jobs have opened up at the Oregon Department of Consumer and Business Services (DCBS); see the NASCUS Career/Job Postings page for more details … Federal Reserve Board Vice Chair for Supervision Randal Quarles – whose term in that role ran out this week, but who continues to serve until a successor is confirmed – will no longer chair the Fed Board’s committee on supervision and regulation. Instead, the Fed said this week, the three-member committee will only advance agenda items before it when there is “broad consensus” among Federal Reserve officials. That essentially means that all three committee members will have to agree to any rule changes to be proposed to the full board.
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(Sept. 17, 2021) Federal banking agencies have been collaborating via a “crypto policy sprint” to agree on definitions, use cases, risks, and gaps, and to discuss policy options related to digital assets, the acting head of the OCC said this week. Acting Comptroller Michael Hsu said that, while controlling the growth of crypto and defi (decentralized finance) is challenging given their nature and in light of market demand, “it is imperative that financial regulators work together to ensure that crypto/defi activities that take place within the banking system or are facilitated by banks are trustworthy,” he said, adding that state bank regulators would be included in the cooperation. “Innovation is important, but safeguarding trust is paramount,” he said … Registration is now open for NCUA’s second-ever Diversity, Equity, and Inclusion (DEI) Summit for credit union leaders, trade and support organizations and professionals in the field, set for Nov. 2-4. The virtual event, themed “From Intention to Action,” is aimed at providing those committed to advancing DEI a forum to share best practices, address challenges to advancing diversity, and learn how the NCUA can support the credit union industry in its efforts. The event features a town hall meeting hosted by NCUA Board Chairman Todd Harper with credit union CEOs as participants (including Timothy Anderson, United States Senate FCU; James Schenck, Pentagon FCU; Maria Martinez, Border FCU; and Tonita Webb, Verity CU) … The Oregon Department of Consumer and Business Services has openings for three Financial Examiner 3 candidates (with an underfill option of a Financial Examiner 2). The positions are responsible for: objectively evaluating the condition of financial institutions for safety and soundness; maintaining public confidence in the integrity of the financial system and in individual financial institutions; enforcing both state and federal banking statutes and regulations. See the link below for more details.
LINKS:
Diversity, Equity and Inclusion Summit 2021
Financial Examiner (Financial Examiner 3)
(Sept. 10, 2021) Banks have more time to comment on proposed guidance to help them manage third-party risk, with a new deadline of Oct. 18, the federal banking agencies said this week. The agencies said the extension for the comment period – originally set to end Sept. 17 – was adopted to allow more time for individuals to analyze issues and prepare their comments. The proposed joint guidance was issued July 13; it is based on 2013 guidance from the Office of the Comptroller of the Currency (OCC). The latest guidance also covers arrangements between banks and financial technology (fintech) firms. NCUA did not join in proposing the guidance … An information and communications technology (ICT) supply chain risk management fact sheet has been posted on the NASCUS website, to help the state system raise awareness of risks to supply chains and help reinforce an overall national culture of security. The fact sheet was developed by the federal Cybersecurity and Infrastructure Security Agency (CISA) develop strategies for mitigating and addressing supply chain risks
LINKS:
Agencies Extend Comment Period on Proposed Risk Management Guidance for Third-Party Relationships
ICT Supply Chain Risk Management Fact Sheet
(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. 20, 2021) A proposal by NCUA to create the new “complex credit union leverage ratio (CCULR)” framework — the credit union equivalent of the community bank leverage ratio (CBLR) — is out for public comment until Oct. 15, according to a notice published in the Federal Register this week. Issued for comment during the July 22 NCUA Board meeting, the proposed rule would make a simplified measure of capital adequacy available to federally insured credit unions defined as “complex” – meaning those with more than $500 million in assets … The spread of the Delta variant of the coronavirus and stagnant vaccination rates pose “downside risks” to the economic outlook, according to members of the Fed’s rate-setting Federal Open Market Committee, as expressed in the minutes of the meeting from July 27-28. The minutes were released this week. Committee members also noted economic uncertainty remains high and that supply disruptions and labor shortages might last for longer than anticipated … NCUA is scheduling a Sept. 8 webinar on its modernized examination tools. The session, which gets underway at 2 p.m. ET and runs for an hour, will focus on the new modern examination platforms and systems, including the agency’s Modern Examination & Risk Identification Tool, (MERIT), as well as associated programs: the Data Exchange Application (DEXA), NCUA Connect, and the Admin Portal. The agency said registration is now open.
LINKS:
Capital Adequacy: The Complex Credit Union Leverage Ratio; Risk-Based Capital
Minutes of the Federal Open Market Committee, July 27-28, 2021
Register Now for NCUA’s Modernized Examination Tools Webinar on Sept. 8
(Aug. 6, 2021) The Massachusetts Division of Banks is looking for candidates to fill the position of chief director of risk management (safety & soundness) supervision. For more information, see the NASCUS Career/Job Postings page (link below) … Federal credit unions were advised by NCUA this week that the 18% loan ceiling was continued by the agency, following board action in June. The 18% ceiling runs for 18 months, expiring March 10, 2023. The current 18% loan rate ceiling for FCUs ends Sept. 10.
LINKS:
NCUA Letter to FCUs 21-FCU-04: Permissible Loan Interest Rate Ceiling Extended