(Jan. 21, 2022) Federal credit union (FCU) operating fees will decrease by an average of 23.7% in 2022, NCUA told the FCUs in a letter Thursday (letter to FCUs 22-FCU-01). About half of the 2022 operating fee reduction results from the NCUA Board applying a $15 million credit to amounts that would otherwise be due to support the approved 2022 operating and capital budgets, which came from previously collected operating fees that were unspent at year-end 2021, NCUA said. The remainder of the fee reduction, the agency said, came from budget surplus, growth in credit union assets – and “a slight increase to the share of the Operating Budget funded from the Share Insurance Fund through the Overhead Transfer Rate (OTR) methodology.” … NCUA and the federal banking agencies were all dinged in a congressional watchdog’s report on privacy protection for not fully implementing key practices. The report from the Governmental Accountability Office (GAO) notes that the agencies, among other things, have not maintained a full “personally identifiable information” (PII) inventory for all agency-owned applications. The agencies also did not document steps taken to minimize the collection and use of PII, the report asserts … A 2019 CFPB taskforce, ostensibly focusing on federal consumer financial law, did not comply with federal “sunshine” law requirements and the report of the group, issued about a year ago, will say so under a settlement announced late last week by the agency. Under that settlement, all taskforce records that would have been made public if the CFPB had complied with FACA’s requirements will be released publicly March 22. The records will also be made publicly available on the CFPB’s website, the agency said.
LINKS:
NCUA Letter 22-FCU-01: Operating Fee Schedule Adjusted for 2022
CFPB Announces Settlement Regarding the 2019 Taskforce on Federal Consumer Financial Law
(Sept. 24, 2021) Saule T. Omarova, a Cornell University law professor, is President Joe Biden’s (D) pick as nominee to a five-year term for Comptroller of the Currency, the White House announced Thursday. A former special advisor for regulatory policy in the Treasury Department’s office of domestic finance (from 2006-07), Omarova has spent most of her career as an academic and lawyer studying and practicing financial regulatory law, according to a biography published by the White House … NCUA did not always pursue enforcement actions aggressively enough with regard to failed credit unions with concentrations in taxicab medallions, or conduct post-mortem reviews of failed credit unions as required, the Government Accountability Office (GAO) said in a report issued Thursday. The report, the congressional watchdog said, was aimed at analyzing the causes of failure and observed opportunities for NCUA to enhance its oversight. The report takes particular focus on the failure in 2018 of three credit unions with loans concentrated in taxi medallions with declining values. GAO said it recommended that the agency enhance its tracking of enforcement data, act earlier on indications of future problems, and complete post-mortem reviews in a timely manner … Credit unions and banks serving legal, cannabis-related businesses would receive a “safe harbor” and other protections under legislation that was added this week to the House version of must-pass FY22 National Defense Authorization Act (NDAA), which annually funds the nation’s military, among other things. The House passed the bill – Secure and Fair Enforcement (SAFE) Banking Act — as a standalone measure earlier this year, but it has not advanced in the Senate. Including it in the NDAA helps the SAFE Banking Act’s chances for final enactment, but is still subject to change in the Senate.
LINKS:
President Biden Announces Key Nominations for Financial Regulation and Investor Protection
NCUA: Additional Actions Needed to Strengthen Oversight
(June 11, 2021) Changes made during its reorganization have led to a loss of fair lending expertise at the CFPB, and other actions taken by the agency could lead to reduced transparency and difficulty in assessing progress toward fair lending goals, according to a report issued by the Government Accountability Office (GAO) this week.
GAO said that a reorganization by the bureau in 2018 shuffled its fair lending activities, resulting in expertise being reallocated throughout the agency. The congressional watchdog stated that, when the agency conducted the reorganization three years ago, it moved its fair lending office from the supervision, enforcement and fair lending division to the office of former Director Kathleen Kraninger reallocating some of the fair lending office’s responsibilities along the way.
More specifically, GAO said those key changes in the 2018 reshuffling were:
- Responsibility was moved from specialist attorneys in the fair lending office to generalist attorneys in its enforcement office.
- Subject matter expertise and exam support was shifted from dedicated fair lending office supervision staff to a new team in the office of supervision policy.
- Responsibility for selecting institutions for fair lending exams and identifying enforcement priorities was reassigned from the fair lending office to supervision offices and the office of enforcement at the bureau.
“As CFPB planned and implemented the reorganization, it did not substantially incorporate key practices for agency reform efforts GAO identified in prior work—such as using employee input for planning or monitoring implementation progress and outcomes,” the congressional watchdog stated.
The GAO also said that it identified “challenges related to the reorganization” that included loss of fair lending expertise and specialized data analysts. The agency indicated those losses may have “contributed to a decline in enforcement activity in 2018.”
In any event, the report stated, the bureau has not assessed how well the reorganization met its own goals or how it affected fair lending supervision and enforcement efforts.
LINK:
Fair Lending: CFPB Needs to Assess the Impact of Recent Changes to Its Fair Lending Activities
(May 21, 2021) Reporting exemptions on home mortgage lending data for smaller credit unions and banks had little impact on data availability, but more information from the lenders would help oversight, a report from the congressional Government Accountability Office (GAO) stated this week.
The report noted that banks and credit unions that don’t do a lot of mortgage lending (but, in any event, some lending) are exempt from reporting mortgage lending data such as debt-to-income ratios and credit scores under changes made to the Home Mortgage Disclosure Act (HMDA) in 2018. “Although these exemptions minimally affected data availability, regulators still need to verify whether lenders are eligible to use them,” GAO said.
According to the watchdog agency, 3% of the new HMDA data were not reported because of partial exemptions for the 2018 and 2019 HMDA data GAO reviewed. At the local level, the agency said, in most census tracts, at least 91% of data GAO reviewed were available in 2019.
“Partial exemptions did not disproportionately affect the availability of HMDA data GAO reviewed for borrowers of any race, ethnicity, or income level,” the agency stated.
However, GAO stated, regulators could not verify some lenders’ eligibility for partial exemptions because not all HMDA reporting included data on whether each loan is an open-end line of credit. “This data point is one of the new data points required since 2018, and lenders with exemptions are not required to provide it. Without it, however, it is difficult for regulators to determine if the lender is below the loan volume level required for partial exemption eligibility,” the report sates.
GAO said the HMDA data that lenders with partial exemptions are required to submit are set in statute. However, it said, if Congress were to make reporting of open-end lines of credit mandatory for all HMDA reporters, including those with partial exemption, regulators could more readily confirm lenders’ eligibility for partial exemption.
In addition, GAO said, CFPB has other data that are useful in determining lenders’ eligibility, such as type of lender. “CFPB does not plan to analyze these data for the other regulators, stating that they have access to the data through other sources,” GAO stated. “However, it would be more efficient—and reduce duplication of effort among regulators—for CFPB to synthesize and share data with regulators to assist them in assessing lenders’ partial exemption compliance.”
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.”