(Nov. 19, 2021) Flexibility for board meetings originally extended to FCUs during the height of the coronavirus crisis will be extended in the new year, NCUA said this week. In Letter to Federal Credit Unions (LTCU) 21-FCU-06, the agency said a federal credit union (FCU), as allowed for in March of last year, may adopt at any time by a two-thirds vote of its board of directors a bylaw amendment allowing the board to meet virtually. The provision was approved by the agency in response to person-to-person limits on meetings during the coronavirus crisis … The use of stablecoins deserves a look – and issuance should be broader than just that by banks and credit unions – Federal Reserve Board Gov. Christopher Waller said this week. Referring to a report issued Nov. 1 by the President’s Working Group on Financial Markets that advocated only federally insured financial institutions could issue the digital payments, Waller said “there may be others that better promote innovation and competition while still protecting consumers and addressing risks to financial stability.” He said he disagrees that stablecoin issuance can or should only be conducted by federally insured banks credit unions “simply because of the nature of the liability … The controversy over OCC Nominee Saule T. Omarova (who faced a confirmation hearing Thursday) was illustrated by competing headlines issued in advance by the top Democrat and Republican members of the Senate Banking Committee. The headline of the press release issued by Chairman Sherrod Brown (D-Ohio) stated “Saule Omarova is Eminently Qualified to Lead the OCC.” The headline of the release issued by Ranking Member Pat Toomey (R-Pa.) stated: “I’ve Never Seen a Nominee with More Radical Ideas.” The banking industry has also expressed skepticism about the nominee. Omarova told the panel her priorities would be helping small- to medium-sized banks invest locally.
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Federal Credit Union Meeting Flexibility in 2022 Due to the COVID-19 Pandemic
Witness statement: Dr. Saule T. Omarova (Comptroller of the Currency Designate)
(Dec. 23, 2020) The Federal Reserve Board now has six (out of a total seven) members, as newest Gov. Christopher Waller joined the board after taking his oath of office last Friday. Waller was confirmed by the Senate Dec. 3; he is the former research director for the St. Louis Fed, and a former professor. Meanwhile, there is still no word on confirming the nominee to the seventh and final seat on the board. A vote on controversial nominee Judy Shelton has been stalled in the Senate since at least November; Senate leadership has yet to announce plans to take up the nomination again … Big banks saw their losses rise to more than $600 billion under conditions simulated in a second stress test conducted by the Federal Reserve – but the banks’ capital ratios, despite the losses, would continue to be well above the minimum required (falling from 12.2% to 9.6%, but still above the 4.5% minimum), the central bank said late last week. Nevertheless, the Fed plans to keep restrictions on the banks’ distributions to investors and share repurchases, and won’t make changes to capital requirements … How to spot warning signs of human trafficking is in the spotlight for a webinar next month sponsored by NCUA, set for Jan. 7. The agency said the event will provide an overview of human trafficking and its impact on communities, law enforcement’s efforts to combat it, and potential red flags in credit unions. Attendees will also learn how to report concerns about human trafficking to the proper authorities, the agency said. There is no charge for attending, although advance registration is required … This is the final issue of NASCUS Report for 2020; we’ll see you again on Jan. 8. In the meantime: Happy Holidays – and have a terrific New Year!
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Federal Reserve Board releases second round of bank stress test results
Register Now for NCUA’s Human Trafficking Webinar on Jan. 7
(Dec. 4, 2020) Following the Senate’s action to fill out the membership of the NCUA Board, on Thursday the Senate filled one of two empty seats on the Federal Reserve Board, confirming Christopher Waller. But it wasn’t a cakewalk: by many accounts, it was one of the closest confirmation votes ever for a central bank board member.
Waller, now executive vice president/director of research for the Federal Reserve Bank of St. Louis (and a former professor of economics at the University of Notre Dame), was confirmed on a vote of 48-47, with all Democrats and Republican Sen. Rand Paul (Ky.) voting against.
Thursday’s vote marked the first time the Senate had confirmed a Fed governor in a lame-duck period that follows the November election before the president’s term ends in January. Further, Fed governors are more typically confirmed on much more lop-sided votes, with 60 votes or more in favor.
The close vote for Waller (considered a “non-controversial” nominee) may signal bad news for the future on the Fed Board for the nominee to the other open seat: Judy Shelton. She has received a cool reception in the Senate, particularly among Democrats, for her past comments about bringing back the gold standard, questioning the effectiveness of federal deposit insurance, and the Fed’s independence from political influence.
Last month, Shelton’s nomination came before the Senate and failed to earn enough votes to cut off debate – action that would have paved the way for a final vote on her nomination. The close vote on Waller likely indicates the controversial Shelton will have a tough time being considered again in the Senate. In fact, Senate Majority Whip John Thune (R-S.D.) said Thursday that another vote on Shelton’s nomination was “unlikely” at this point.