Regulatory Advocacy Update
November 30, 2011
December 1, 2011
CFPB Calls for Comment on Streamlining Inherited Regulations
The Consumer Financial Protection Bureau (CFPB) issued a notice and request for comment Tuesday on how to address the regulations it has inherited from seven federal agencies, including the National Credit Union Administration (NCUA), the Federal Reserve Board, and Department of Housing and Urban Development (HUD). The CFPB will be inheriting 14 rules from these agencies and is looking to “identify the highest priority areas for attempting to streamline the inherited regulations by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions.”
The CFPB is seeking input in several areas with a request for general input on how to prioritize the review, specific provisions and regulations that should be reviewed, and the way these changes would impact institutions. The request also addresses more specific areas for input including existing regulations on disclosures, notices, and scope of many current rules.
The request for comment is expected to be published in the Federal Register shortly, at which point there will be an initial 90-day comment period followed by an additional 30-day period to address and respond to the comments submitted.
You may read the entire announcement on the Northwest Credit Union Association (NWCUA) regulatory advocacy comment call page. The Association site will be updated with deadlines once the announcement has been published in the Federal Register and a timeline is finalized.
NCUA Prepares to Issue Additional Guidance on Troubled Debt Restructurings
After much discussion with leagues and credit unions, the NCUA has indicated that it will soon be issuing additional guidance on Troubled Debt Restructuring (TDR) accounting. The Association has raised this issue with the NCUA repeatedly, including a call this week with NCUA leadership on shaping that guidance and a meeting with Melinda Love while serving as the NCUA Director of Examination and Insurance.
The inconsistency of enforcement around TDRs and the complicated and generalized requirements for reporting caused serious concerns for credit unions—especially those making nontraditional loans, a cornerstone to many credit union member services.
“We are pleased to see indications that new guidance may be coming later this month and encouraged that NCUA is seeking input from credit unions on how to best clarify and implement this guidance,” NWCUA Director of Regulatory Advocacy Jaycee Winn said.
The Association will review this guidance as it continues to press for reasonable and consistent standards for loan modifications.
Regulators Clarify Supervision and Enforcement Authority
Banking regulators, including the CFPB and NCUA, recently issued guidance clarifying the determination and division of supervisory authority over institutions of varying asset sizes. The CFPB only has supervisory authority for credit unions larger than $10 billion. There was some question around how asset size would be determined, especially with the recent movement of funds from banks to credit unions, as some institutions may have sudden influxes of deposits that would push them temporarily past that $10 billion mark temporarily.
The regulator’s guidance provides that an institution must have assets over $10 billion in its quarterly call report for four consecutive quarters to be considered a large institution. Further, a credit union would remain a “large institution” until reporting assets of less than $10 billion for four consecutive quarters.
The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions on these or any regulatory issues, please contact Director of Regulatory Advocacy Jaycee Winn at firstname.lastname@example.org, or at 800.995.9064 x209.