NWCUA Regulatory Advocacy Update

Washington Legislature Holds Hearing on Rulemaking Moratorium Legislation

The Washington State Legislature recently held a hearing on House legislation that would impose a general moratorium on state-agency rulemaking until at least mid-2015. The legislation would require that all bills, acts, ordinances, resolutions, or rules enacted be limited to those provisions authorized by express language in the state or federal Constitution.

The legislation would also require that any new significant legislative rules be signed by the governor before being adopted by an agency and would delay the effective date until the end of the following legislative session. Rules with “significant economic impact” would need to be enacted by the legislature. Further, agencies would annually review existing rules in search of those with a significant economic impact—should any be found, they would be required to cease enforcement until legislative review.

“With the onslaught of regulation from state and federal agencies, this would be a welcome reform for all regulated entities,” said Northwest Credit Union Association (NWCUA) Director of Regulatory Advocacy Jaycee Winn. “Maintaining certainty about the level of regulation and the costs of doing business would provide a significant relief. While we support a strong regulator, we also support this effort to minimize overreaction to the activities of other regulated entities or perceived threats.”
The NWCUA will continue to follow this legislation. Read the full bill here.

NCUA Issues New Proposal on Troubled Debt Restructurings

At its most recent board meeting, the National Credit Union Administration (NCUA) issued a proposed rulemaking and accompanying proposed interpretive ruling and policy statement (IRPS) on accounting for troubled debt restructurings (TDRs). The Association has been working closely with the NCUA and the Credit Union National Association (CUNA) in helping to push for more streamlined and clear guidance on accounting for TDRs. This has been an issue for credit unions of all sizes, especially in terms of ensuring that all examiners are working on the same page.

The proposal would amend NCUA regulations to require federally-insured credit unions (FICUs) to maintain written policies that address the management of loan workout arrangements and nonaccrual policies, consistent with industry practice or Federal Financial Institutions Examination Council (FFIEC) requirements, as listed in the FFIEC’s Uniform Retail Credit Classification and Account Management Policy (Uniform Policy), adopted in June of 2000 by FFIEC but not adopted by the NCUA. The proposal includes the IRPS as an appendix that would assist FICUs in complying with the rule.

The IRPS addresses TDR-reporting call reports. According to the NCUA, this proposed rulemaking and IRPS are timely based on the increase in TDRs. The NCUA also noted that the proposed IRPS is designed to offer credit unions regulatory relief and help keep more families in their homes.

Winn said that the Association is encouraged by this additional guidance and will be providing a comment call on the issue soon.

Read the full proposal here.

NCUA Announces 2012 Rule Review

The NCUA has released the list of regulations it will be reviewing this year as a part of its three-year cycle to review all agency regulations. Included in that list are regulations governing bylaws, field of membership, credit union service organizations (CUSOs), prompt corrective action (PCA) and loan participations.

NCUA Board Chairman Debbie Matz cited the list as an example of its commitment to “modify, streamline, expand or repeal rules that are not required by statute and would not jeopardize safety and soundness,” as requested in President Obama’s executive order on regulatory reduction.

The NCUA is interested in both substantive comments as well as comments that would help to simplify or clarify language. The Association will be developing an extensive response to the regulations for review and welcomes comments, concerns or areas of confusion on any of these topics.

Read the full list of regulations up for review this year here. To offer feedback, click here.

CFPB Reports to Congress

Appointed on Jan. 4 by President Obama, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray went before the Senate Banking Committee on Tuesday to deliver the CFPB’s first semiannual report to Congress detailing its work from July 21, 2011, through Dec. 31, 2011.

During the hearing, Cordray continued to express his commitment to lessening burdens on credit unions, acknowledging they had very little to do with the financial crisis. He also reaffirmed his intent to establish a panel of credit unions and community banks to provide input on potential rules and regulations.

Cordray laid out the five objectives of the CFPB as defined in the Dodd-Frank Act:

  • Ensuring that consumers have timely and understandable information to make responsible decisions about financial transactions;
  • Protecting consumers from unfair, deceptive, or abusive acts or practices, and from discrimination;
  • Reducing outdated, unnecessary or unduly burdensome regulations;
  • Promoting fair competition by consistent enforcement of the consumer protection laws in the bureau’s jurisdiction; and
  • Encouraging markets for consumer financial products and services that operate transparently and efficiently and to facilitate access and innovation.

He also touched on the measures being taken to meet these goals during the bureau’s first few months, including to:

  • Resolve consumer complaints about credit cards and mortgages;
  • Launch a supervision program that will promote compliance with consumer protection laws in the bureau’s jurisdiction by financial companies of all kinds;
  • Evaluate and develop disclosures that make the costs and risks of financial products easier for consumers to understand;
  • Work to implement statutory protections for consumers who rely on consumer financial products, such as mortgages;
  • Launch the bureau’s website, ConsumerFinance.gov, and use it to engage the public in a range of projects;
  • Create several ways in which individuals can alert the CFPB about potential violations of consumer protection laws in the bureau’s jurisdiction; and
  • Improve information about the structure of consumer financial markets and consumer behavior through practical market intelligence and independent research.

Between July 21 and Dec. 31, 2011, the CFPB received 13,210 consumer complaints, including 9,307 credit card complaints and 2,326 mortgage complaints. Since the bureau began accepting complaints, 44 percent of all complaints have been submitted through the bureau’s website and 14.7 percent via telephone calls. Referrals from other regulators accounted for 34.9 percent of complaints received. The rest were submitted by mail, email and fax.

Read the CFPB’s full report to Congress here.


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 jwinn@nwcua.org, or at 800.995.9064 x209.

Posted in Advocacy News, Compliance News, NCUA.