(Dec. 11, 2020) Two new summaries were posted this week by NASCUS, outlining an NCUA final rule on corporate credit unions and an interagency proposal about codifying the use of “supervisory guidance” from federal agencies. Both are available to members only.
Corporate final rule clarifies provisions
The final rule on corporate credit unions, generally aimed at clarifying a number of provisions in NCUA’s rules, was adopted unanimously by the NCUA Board in October. The rule takes effect next week (Dec. 14), and addresses five key areas:
- permits a corporate credit union to make a minimal investment in a credit union service organization (CUSO) without the service organization being subjected to heightened agency oversight;
- expands the categories of senior staff positions at member credit unions eligible to serve on a corporate credit union’s board;
- removes the “experience and independence” requirement for a corporate CU’s enterprise risk management (ERM) expert;
- clarifies the definition of a collateralized debt obligation;
- simplifies the requirement for net interest income modeling.
Although the proposal did contain two provisions regarding proposed subordinated debt offerings by credit unions, the final rule leaves those out. NCUA decided to remove both of those provisions, noting that both sections would be addressed in a final rule on subordinated debt in the future. The agency added that it does not envision any changes to the proposed definition of a debt instrument included in the proposal.
‘Supervisory guidance’ would be codified
In late October, NCUA joined the federal banking agencies and the CFPB in proposing a rule (for a comment period ending Jan. 4) aimed at clarifying and codifying the role of supervisory guidance from federal financial institution regulators. Under the proposal, the meaning of “supervisory guidance” would be clarified as meaning, essentially, it doesn’t have the force of law. If finalized, the proposal would codify an interagency statement issued by all of the agencies in September 2018. That statement was intended to make clear that, unlike a statute or regulation, supervisory guidance is not the same as statute or regulation. “Supervisory guidance does not have the force and effect of law, and the agencies do not take enforcement actions based on supervisory guidance,” the 2018 statement read.
NCUA has maintained that the proposal will not create a burden for credit unions – partially because, the agency said, NCUA has followed the intent of the proposal for at least the last seven years. NCUA has noted that, at least since 2013, all “documents of resolution” for credit unions have been to specific statutory and regulatory citations – a practice, the agency has vowed, would not change under the proposed rule.
LINKS:
Summary: corporate rule (members only)
Summary: role of supervisory guidance (members only)
(Nov. 6, 2020) Two webinars – one on fair lending and consumer compliance and another on financial literacy and consumer financial protection for servicemembers – are on the horizon for NCUA (in partnership, for the latter, with CFPB).
On Nov. 17, the credit union agency hosts a “Fair Lending and Consumer Compliance Regulatory Update” at 3 p.m. ET, to run about one hour. According to the agency, the webinar will feature staff from the NCUA’s Office of Consumer Financial Protection discussing focus areas for consumer compliance exams in 2021, including a review of COVID-19-related loan modifications and credit reporting; fair lending policies and procedures; and findings from the 2020 consumer compliance exam reviews.
The following day (Nov. 18), NCUA and CFPB partner on a session covering servicemember financial literacy and consumer protection, which starts at 2 p.m. ET and runs for about 45 minutes, according to both agencies. The “Financial Readiness Resources and Information for Servicemembers, Veterans, and their Families” webinar, featuring NCUA’s Office of Consumer Financial Protection, is scheduled to highlight financial literacy resources for servicemembers and their families (on NCUA’s consumer-facing website, MyCreditUnion.gov), and provide a brief overview of servicemember consumer financial protection laws and regulations.
CFPB’s Office of Servicemember Affairs will highlight its own interactive learning tools and resources for servicemembers and their families, according to the agencies.
Advance registration is required for both; see the links below.
LINKS:
NCUA Hosting Webinar on Fair Lending and Consumer Compliance Updates
Registration Now Open for Webinar on Consumer Financial Protection for Servicemembers
(Nov. 6, 2020) A final rule focusing on communications between consumers and debt collectors under the Fair Debt Collection Practices Act (FDCPA) was released late last week by the CFPB, with that final rule scheduled to take effect one year following its publication in the Federal Register. (As of Thursday, the final rule had not yet been published.)
The bureau said the rule is intended to “restate and clarify” prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
Issued in May 2019 (and followed by a supplemental proposal this February), the proposal revised the bureau’s Regulation F, focusing on the timing and means of communications between consumers and debt collectors and clarifying how the protections of the FDCPA, enacted in 1977, apply to newer communication technologies, such as email and text messages.
Not included in the final rule is a safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission, the bureau said. “That provision was proposed to bring greater clarity to this issue but, after receiving questions and comments from many stakeholders concerning the proposal, the Bureau has decided not to finalize that provision,” the bureau said.
However, the final rule summary does note inclusion of a safe harbor for debt collectors from civil liability “for an unintentional third-party disclosure if the debt collector follows the procedures identified in the rule when communicating with a consumer by email or text message.”
Meanwhile, the bureau said it plans to issue a consumer disclosure-focused final rule in December to clarify the information that a debt collector must provide to a consumer at the outset of debt collection and to provide a model notice containing the information required by FDCPA section 809(a). It will also, the bureau said, address consumer protection concerns related to requirements prior to furnishing consumer reporting information and the collection of debt that is beyond the statute of limitations (i.e., time-barred debt, addressed in the above-noted supplemental proposal).
The final rule also contains provisions on disputes, and record retention, among other topics.