Legal Briefs

Consumer Financial Protection Bureau (CFPB)

The CPFB offered clarity on state reciprocity in loan originator licensing. In the Bulletin, the CFPB states that the SAFE Act allows a state, if it chooses, to provide a transitional loan originator license to an individual who holds a valid loan originator license from another state.

The CFPB announced the launching of a public inquiry into arbitration clauses. The CFPB is attempting to gauge the prevalence of arbitration clauses and is asking for public input into several areas surrounding the use of arbitration clauses. Comments are due by June 23, 2012.

National Credit Union Administration (NCUA)

The NCUA released Legal Opinion Letter 11-1126. The opinion letter discusses whether or not it is necessary for a credit union to obtain an appraisal when the credit union sells a participation interest in a member business loan (MBL) under the Interagency Appraisal and Evaluation Guidelines. It is the NCUA’s opinion that a new appraisal would not be needed when selling an MBL if the loans already met the appropriate appraisal requirements when originated. The participating credit unions should maintain sound risk management systems and policies that address the level of risk associated with loan participations. This would include obtaining current collateral valuation information to understand its collateral position over the life of the loan.

The NCUA released Regulatory Alert 12-RA-03. The Regulatory Alert discussed what credit unions can and cannot do in terms of compensating loan originators due to the recently released CFPB opinion that provides for new flexibility in loan originator rules and pension plan payments.

Office of Foreign Assets Control (OFAC)

The OFAC SDN list was updated again. Last update: April 23, 2012.

National Labor Relations Board (NLRB)

The NLRB has postponed the April 30, 2012, requirement to post the Employee Rights Poster. Citing conflicting decisions at the district court level, the requirement has been temporarily enjoined until the court case is decided.

Financial Crimes Enforcement Network (FinCEN)

FinCEN has reported that mortgage loan fraud (MLF)-related suspicious activity reports (SARs) have increased in 2011, even as fourth quarter decreased. The report shows that 2011 saw a 31 percent increase in the MLF SARs over 2010.

Social Security Administration (SSA)

The SSA Board of Trustees released its annual report on the financial health of the Social Security Trust Funds. The report shows the Trust Funds will be exhausted in 2033. This is three years sooner than reported last year. After that point there will only be sufficient non-interest income coming in to pay about 75 percent of the scheduled benefits. Medicare’s Hospital Insurance Trust Fund only has sufficient resources to cover benefits until 2024.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in NCUA.