(Feb. 12, 2021) Credit unions required to file reports on home mortgage loan applications made last year have until March 1 to do so, NCUA reminded this week in a Regulatory Alert.
In the alert (21-RA-03), the agency said all federally insured credit unions with assets of more than $47 million in assets as of Dec. 31, 2019, must file the application reports as required under the Home Mortgage Disclosure Act (HMDA), and implemented by the Consumer Financial Protection Bureau’s (CFPB’s) Regulation C.
There are some limiting provisions for reporting under the rule, the agency pointed out. For example, the closed-end mortgage loan threshold increased from 25 to 100 effective July 1, 2020. “Credit unions that originated fewer than 100 covered closed-end mortgage loans in 2018 or 2019 are not required to report any closed-end mortgage loan information for 2020,” the agency wrote, noting that Section 1003.3(c) of Regulation C lists excluded (not covered) transactions.
All data submitted, the agency said, must be done through the Federal Financial Institution Examination Council’s (FFIEC) HMDA Platform and that no other submission methods are permitted. An authorized representative of the credit union with knowledge of the data submitted must certify to the accuracy and completeness of the data submitted, the agency noted.
LINK:
Submission of 2020 Home Mortgage Disclosure Act Data (NCUA Regulatory Alert, 21-RA-03)
(Feb. 12, 2021) A continuing partnership with state supervisors “will be invaluable” to ensuring a viable dual-chartering credit union system, NCUA Board Chairman Todd Harper said in a webinar Thursday, his first public event as new leader of the agency
During the 90-minute event – billed as the “Chairman’s Webinar” – Harper outlined his priorities as chairman, which include a variety of other issues.
“My whole heart is in the NCUA, its vital work, and the mission of the credit union system,” he said. In particular, he said he looked forward to working with credit unions and other key stakeholders in responding to the economic fallout caused by pandemic, positioning the agency to meet future challenges, and strengthening NCUA’s commitment to consumer financial protection.
More specifically, regarding his priorities, he cited capital and liquidity, consumer financial protection, cybersecurity, and diversity, equity and economic inclusion. “In the months ahead, these priorities will guide the agency’s decisions,” he said. He also said credit unions, in order to compete, must be able to safely and securely use technology to deliver member services and adopt financial innovations – but emphasize security and equity in providing those services.
“We must also strengthen the agency’s consumer financial protection program to ensure that all consumers receive the same level of protection regardless of their financial provider of choice,” he said.
Referring to state regulators, the new NCUA chairman said the supervisors play an important role in ensuring safety and soundness. He said the dual chartering system is a “critical asset that helps the credit union system be dynamic and thriving.” A continuing partnership between NCUA and state regulators, as the credit union system addresses the economic fallout from the pandemic, he said, “will be invaluable.”
In other comments, Harper said:
- CUs must live up to their mission of providing access for their members to credit and savings – including members of modest means. ”NCUA must do all that it can, then, to advance economic equity and justice,” he said.
- In the aftermath of the killing of George Floyd last summer, the credit union system has an obligation to address racial justice directly and chart a better course for the nation’s future. “We especially must enhance support for minority deposit institutions, low-income credit unions and community development credit unions that are “on the front lines of serving the underserved “– as well as compliance with fair lending laws to counter discrimination in lending.
- Future challenges, such as climate change, must also be addressed (since, he said, it disproportionately affects underserved communities).
Harper also noted issues on the horizon for the agency, which include finalizing the capitalization of interest rule, developing a rule to phase in the current expected credit loss (CECL) accounting rule, and exploring the impact of additional economic stimulus approved by Congress on net worth ratios.
In comments from NCUA staff during a questions and answer period of the event, it was noted that the rollout of the new MERIT exam program is delayed until the second half of this year. The impact of the coronavirus crisis was specifically pointed to as the cause.
Also, according to NCUA Director of Examination and Insurance Myra Toeppe (in response to a question submitted by a participant), a decision on an insurance premium has not yet been reached. She said the agency would be finalizing the equity ratio for the insurance fund first, and presenting that at the NCUA Board meeting next week. “We need to get the calculation finalized and then move on from there,” she said.
LINK:
Presentation: NCUA Chairman’s Feb. 11, 2021 webinar
(Feb. 5, 2021) Three summaries of recent NCUA proposals were posted this week by NASCUS, dealing with the addition of a new component to the examination rating system, lending by CUSOs, and the agency’s communications program.
More specifically, the summaries (which are available to members only) outline:
- A proposal to add an “S” (for market sensitivity) to the CAMEL rating system. At its January meeting, the NCUA Board voted unanimously to issue a proposal (for a 60-day comment period) to add the component to its rating system — an addition long supported by NASCUS for the federal regulator – especially since 24 states have already incorporated the component into their own exams. The proposal would also redefine the “L” (Liquidity Risk) component in the existing rating system. According to NCUA, if adopted, the rule would likely take effect in the first quarter of 2022. The agency said that the proposal would provide greater clarity and transparency regarding credit unions’ sensitivity to market risk and liquidity risk exposures once adopted. “The proposed addition would make the NCUA’s rating system more consistent with the other financial institution regulators’ ratings system both at the federal and state levels,” the agency said. NASCUS President and CEO Lucy Ito said, when the proposal was issued last month, that state examiners have observed for some time that the extended low-yield environment may encourage greater risk taking by financial institutions. “We urge the agency to finalize this proposal as soon as possible following the comment period and as soon as practicable following necessary technical re-programming,” she said.
- A plan to allow CUSOs to make any loan a federal credit union (FCU) can make. Also at its January meeting, the board issued a proposal (for a 30-day comment period) that would add to the agency’s list of permissible CUSO services the expanded lending powers. The proposal expands the list of permissible loans by CUSOs from only business loans, consumer mortgage loans, student loans, and credit cards to any type of loan an FCU may originate, including, for example, automobile and small-dollar (payday) loans – the two types NCUA said would likely draw the newest involvement by CUSOs.
- A “request for information” (RFI) from credit unions on NCUA’s communications methods. Earlier last month, the NCUA released the RFI (for a 60-day comment period) on its communications processes in an effort, it said, to “promote efficiency and increase transparency.” Specifically, the agency said, the RFI “seeks public input on how the agency can maximize efficiency and minimize burdens associated with obtaining information on federal laws, regulations, policies, guidance, and other materials relevant to federally insured credit unions.” The RFI contained questions about the effectiveness of its press releases, social media content, and the timing and frequency of agency communications. There are also questions related to improving the agency’s websites, online data resources, and the delivery and format of supervisory guidance, NCUA said.
LINKS:
Summary: Proposed Rule, CAMELS Rating System
NASCUS Summary: Proposed rule, CUSOs (part 712)
Summary: Request for Information, NCUA Communications & Transparency
(Feb. 5, 2021) A regulatory alert focusing on 2021 threshold adjustments published by CFPB for Regulations C, Z and V was issued this week by NCUA, noting that all three were effective Jan. 1.
The alert notes that, in January, the bureau published annual adjustments for exemption thresholds under the Home Mortgage Disclosure Act (Regulation C) and the Truth in Lending Act (Regulation Z). The asset-size thresholds, the alert points out, exempt some credit unions from data collection under Regulation C and from escrow account requirements for higher-priced mortgage loans and specific qualified mortgages under Regulation Z.
The CFPB published an annual adjustment to the maximum amount consumer reporting agencies may charge consumers for making a file disclosure to a consumer under Regulation V, the alert also notes
More specifically the alert states:
- The Reg C exemption threshold increased to $48 million (meaning credit unions with $48 million or less in assets as of Dec. 31, 2020, are exempt from collecting HMDA data this year);
- The Reg Z escrow and small creditor qualified mortgages (QMs) asset-size exemption threshold increased to $2.23 billion (meaning lenders with assets of less than $2.23 billion at the end of last year are expect if other provisions of Reg Z are also met). The limit also applies during a grace period, in certain circumstances, with respect to transactions with applications received before April 1, 2022.
- The ceiling on the allowable amount a consumer reporting agency may charge for a consumer report in 2021 increased to $13. “The ceiling does not affect the amount a credit union may charge its members or potential members, directly or indirectly, for obtaining a credit report in the normal course of business,” NCUA noted.
(Feb. 5, 2021) New NCUA Board Chairman Harper met with state regulators this week during a regularly scheduled conference call of state regulators. During the hour-long “regulator to regulator” session, the new NCUA leader outlined his priorities for the agency in 2021 and responded to questions from the state supervisors … An advisory warning financial institutions of a proliferation of fraud schemes tied to health care or health insurance services bought and paid for amid the COVID-19 pandemic was issued this week by the Treasury’s Financial Crimes Enforcement Network (FinCEN). The agency said law enforcement and financial institutions have detected numerous instances of potential frauds to health care benefit programs, health insurance, and COVID-19 health care relief funds. The advisory also stated that frauds have also been seen related to COVID-19 relief funds for health care providers, such as those provided under the Paycheck Protection Program (PPP) and Health Care Enhancement Act (HCEA) … The Federal Reserve now says 2023 (rather than 2024) is the launch time for its planned FedNow instant payments system. The agency said the one-year, shortened timeframe is the result of “significant strides” made over the last several months toward program milestones. The Fed said it continues to take a phased approach to launching the service, with the initial launch set for two years from now to include core clearing and settlement functionality and key value-added features, such as a request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions … The Texas Credit Union Department has a job opening for a Director of Examination Support Activities (Director IV); see the State Job Announcements page on the NASCUS website for more information.
LINKS:
FinCEN advisory (FIN-2021-A001)
Federal Reserve updates FedNowSM Service launch to 2023
(Feb. 5, 2021) A proposed rule allowing credit unions to capitalize interest should be finalized “expeditiously,” NASCUS said in a comment letter to NCUA this week, noting its support for the rule.
“We have no doubt credit unions will exercise the ability to capitalize interest to the benefit of members in need and are confident in the ability of state examiners to provide supervisory oversight of loan workouts and modifications,” NASCUS wrote.
The comment letter was filed in response to the NCUA Board’s proposal issued Nov. 19., the board suggested, in issuing the proposal, that continuing to prohibit the authorization of additional advances to finance unpaid interest may be overly burdensome. Removing the prohibition, the board asserted, would “assist a federally insured credit union’s good-faith efforts to engage in loan workouts with borrowers facing difficulty because of the economic disruption that the COVID- 19 event has caused.”
NASCUS agreed, writing its comment letter that finalizing the proposal would provide credit unions’ greater flexibility to work with economically distressed members. “That enhanced flexibility benefits distressed credit union borrowers by expanding the options for repayment programs as the member regains their economic footing,” NASCUS wrote. “Concurrently, provisions of the rule protecting the best interests of the borrower provide consumer protection guardrails that protect against the unlikely chance that a credit union engages in unfair lending practices.”
The state system made one recommendation through the NASCUS letter: that the agency reconsider the blanket prohibition contained in the proposal against additional advances to cover credit union fees and provide credit unions the full range of options for managing and structuring loan work outs as other depository institutions.
“Credit unions have both the ability and integrity to balance the interests of the credit union, distressed borrowers, and other members,” NASCUS wrote.
(Feb. 5, 2021) Catherine Galicia – with a long resume of service on Capitol Hill — has been selected as chief of staff by Board Chairman Todd Harper, the credit union regulator announced this week. She had been serving as senior policy counsel since 2019 to Harper, who was a board member at the time. Before joining the agency, she headed the CFPB’s legislative affairs office and has also worked for Banco Popular as vice president for government affairs, where she led the bank’s Washington office.
In a release, NCUA said Galicia is one of the highest-ranking Latinas in a Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) agency (which are NCUA, the FDIC, the OCC and the Federal Reserve), referring to a 1989 law enacted in the wake of the savings and loan crisis. She worked on Capitol Hill for 15 years, NCUA noted, during which time she served as counsel for Sens. Chris Dodd (D-Conn.) and Tim Johnson (D-S.D.) during their respective periods chairing the Senate Banking Committee; for Sen. Evan Bayh (D-Ind.) as staff director of the International Trade and Finance Subcommittee and Banking Committee counsel; as legislative director and financial service policy aide to Rep. Jim Maloney (D-Conn.); and as legislative director and financial service policy aide for Rep. Nydia Velázquez (D-N.Y.).
She holds a bachelor’s degree in history from the University of Connecticut and a Juris Doctor degree from Rutgers University School of Law. She is a member of the Massachusetts Bar Association.
LINK:
Harper Names Catherine Galicia as Chief of Staff
(Feb. 5, 2021) The new chairman of the NCUA Board will discuss his priorities for the agency and the credit unions it supervises during a 90-minute webinar set for next week, the agency said this week.
Chairman Todd Harper will host the webinar Feb. 11 at 2 p.m. ET, the agency said in a release. During the event, Harper is also anticipated to address the agency’s supervisory activities and recently issued guidance and regulations.
The webinar is open to the public and there is no charge, although advance registration is required.
“Open communication with stakeholders aids the NCUA in achieving its safety and soundness mission and consumer financial protection oversight responsibilities. Such interactions also assist the agency in developing effective and efficient regulations,” Harper said in a statement in this week’s announcement. “I look forward to participating in this webinar and sharing my regulatory philosophy and other thoughts about our priorities and programs with stakeholders.”
Harper was named chairman of the three-member board by President Joe Biden Jan. 25, succeeding Rodney Hood in the position. Harper will chair his first meeting of the board one week after the Feb. 11 webinar. The Feb. 18 meeting is set for 10 a.m. ET.
Registered participants of the webinar may submit questions during the presentation or in advance by emailing [email protected]. The email should have this subject line: NCUA Chairman’s Webinar.
LINK:
Register Now for NCUA Chairman’s Webinar on Feb. 11
(Jan. 29, 2021) NASCUS summaries of recent NCUA letters to credit unions – and a summary of a regulatory alert issued by the agency – are among the latest to be published by NASCUS. All three are available to members only.
The two letters summarized are on the agency’s outline of the issues affecting credit unions contained in the Consolidated Appropriations Act, 2021 adopted by Congress Dec. 27 (letter 21-CU-01, issued by the agency the week of Jan. 4), and about NCUA’s Supervisory priorities for 2021 (letter 21-CU-02, issued by the agency last week).
The first letter notes that that most of the provisions of the consolidated appropriations bill extend portions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law last March as the impact of the coronavirus crisis became apparent. Those provisions are extended to Dec. 31, 2021, the letter notes. It also touches on provisions affecting the agency’s Central Liquidity Facility (CLF), troubled debt restructurings (TDRs), compliance with the Current Expected Credit Loss (CECL) accounting standard and more.
The second letter outlines the broad scope of the agency’s regulatory priorities for 2021, primarily focusing on challenges to credit unions posed by the ongoing coronavirus pandemic and steps to enhance the agency’s offsite monitoring of credit unions’ conditions. Additionally, the letter states that examiners will not be assessing credit unions’ efforts to transition to the CECL standard “until further notice.”
The summary of the regulatory alert (21-RA-01), released by NCUA earlier this month, outlines the agency’s view of CFPB’s action late last year to issue two final rules amending the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) in Regulation Z. The final rules would replace the 43% debt-to-income (DTI) ratio limit with price-based thresholds (under the bureau’s general QM final rule), and create a new category of qualified mortgage (known as the seasoned QM final rule).
LINKS:
NASCUS Summary: LTCU 21-CU-01, Summary of the Consolidated Appropriations Act 2021 (members only)
NASCUS Summary: LTCU 21-CU-02, NCUA’s Supervisory Priorities (members only)
NASCUS Summary: Regulatory Alert 21-RA-01: CFPB Amends Ability-to-Repay/QM Rule under TILA (members only)
(Jan. 29, 2021) The new acting director of the CFPB said in a statement released Thursday that the bureau will be taking “aggressive action” in response to cases where financial providers have violated COVID-19-related consumer protections. Making public a statement he provided to staff last week, Acting Director Dave Uejio included COVID-19 relief for consumers as one of two priorities he has for the bureau; the other is racial equity … Just a reminder that Jan. 31 (Sunday) is the deadline for filing federally insured credit unions to file their fourth quarter 2020 call reports with NCUA. Also to be updated by that date: the Credit Union Profile, which includes (among other things) information that infrequently changes (including emergency contact information, information systems and technology, member programs and services, and more) … The Virginia State Corporation Commission, Bureau of Financial Institutions, is recruiting for multiple credit union examiner positions. More details available through the NASCUS State Job Announcements page (see link below) … Eligible credit unions interested in the Treasury Department’s Emergency Capital Investment Program can get more information during an upcoming webinar hosted by NCUA next Wednesday (Feb. 3) starting at 2 p.m. Eastern. The one-hour program will discuss the program’s eligibility and application requirements; the financial instrument and terms used for the investment, and whether credit unions can use the investment as secondary capital.
Call Report Filing Deadline for the December 31 Call Report Cycle
NASCUS State Job Announcements
NCUA webinar on Treasury Emergency Capital Investment Program
(Jan. 22, 2021) Veteran NCUA attorney Frank Kressman has had the “acting” moniker removed from his title as the agency late last week named him general counsel. He had been serving in the “acting” role for the past 13 months.
Previously deputy general counsel, Kressman was elevated to acting general counsel in November 2019 following the retirement from the GC post by Mike McKenna, then the subject of an internal investigation of allegations of misconduct.
Kressman joined NCUA in 1998, having worked previously at the FDIC and the Commodity Futures Trading Commission (CFTC). He holds a bachelor’s degree from Dickinson College in Carlisle, Pa., a Juris Doctor from the Gonzaga University School of Law in Spokane, Wash., and a Master of Laws degree from The American University Washington School of Law in Washington, D.C.
Also this past week, the agency said Melane Conyers-Ausbrooks has been selected as the agency’s board secretary. She was previously acting board secretary and worked in the agency’s Office General Counsel (OGC). She previously served as legal counsel at law firm Brown Foss and as vice president and chief counsel-retail channel at CitiMortgage Inc. She received a Bachelor of Science from the University of Maryland, College Park, and a Juris Doctor from Howard University School of Law in Washington, D.C.
LINK:
NCUA Names Frank Kressman General Counsel, Melane Conyers-Ausbrooks Board Secretary
(Jan. 22, 2021) Improving coordination between NCUA and the CFPB over the consumer protection supervision of credit unions with more than $10 billion in assets is the stated purpose of a “memorandum of understanding” announced by the two agencies late last week.
In a joint release, the two agencies said that under the agreement they will “pursue opportunities to proactively and efficiently share supervisory information, including drafts of Covered Reports of Examination and final Reports of Examination for credit unions” with more than $10 billion dollars in assets.
The agencies said they would use “secure, two-way electronic means” to accomplish that and that they will “jointly collaborate in semi-annual strategy planning sessions to identify and address areas of alignment and coordination in examinations for covered institutions.”
CFPB and NCUA also asserted that the agreement would “better facilitate coordinated examinations” to increase efficiency, and that the two agencies would share information on training activities and content, as well as on supervisory activities and potential enforcement actions.
The text of the agreement was not made publicly available.