CUNA Regulatory Advocacy Report

THANK YOU

As we leave 2014, we want to thank all of you who wrote to the National Credit Union Administration Board on the Risk-Based Capital Proposal and those who engaged on other regulatory issues as well. We expect the next RBC proposal to be issued January 15, 2015, and we will update you on the proposal as soon as it is released. The next issue of the CUNA Regulatory Advocacy Report will be distributed January 12, 2015. It will feature a look back at the developments of this year and will peer ahead to what we expect in the coming months. Thanks again for all your efforts and for your support. You and your members are the reasons we do what we do.

– Mary Dunn, CUNA SVP and Deputy General Counsel

This week’s Regulatory Advocacy Report will bring you up to speed on the following:

  • CUNA Discusses FOM Working Group with NCUA’s Biliouris
  • Chairman Matz Writes to Defense Department
  • CUNA Urges Credit Union Exemption from Defense Proposal
  • CUNA Seeks Feedback on NACHA Same Day ACH Proposed Rule by January 23
  • GAO Issues Report on Dodd-Frank Act and Regulators’ Analytical and Coordination Efforts

CUNA Discusses FOM Working Group with NCUA’s Biliouris

Matt Biliouris, the NCUA’s deputy director of its Office of Consumer Protection, shared information about the agency’s planned working group on field of membership (FOM) with CUNA’s Deputy General Counsel Mary Dunn last week.

The working group, in addition to one on supplemental capital, was announced at the agency’s Dec. 12 open board meeting.

Biliouris said that the FOM group would study current field-of-membership regulatory requirements and how they can be improved without making legislative changes to the Federal Credit Union Act.

The NCUA plans to form the working group in early 2015 with the hope of making a recommendation to the board and staff by the middle of 2015.

The working group will consist of roughly 10 to 12 NCUA staff members who will be responsible for studying the issues and reviewing input from stakeholders, including credit unions, the state credit union leagues and CUNA.

Biliouris said he looks forward to working with staff at NCUA and consulting with stakeholders who not only have extensive experience with field-of-membership matters, but also possess creativity in “thinking outside the box.”

While the number has not been determined, credit unions and others will be invited to meet with the working group in a consultative role and to serve as a resource for ideas to address FOM regulatory concerns.

Biliouris said that the agency looks forward to working with CUNA and others to recommend credit unions that want to provide their views directly to the NCUA.

“CUNA has already developed a number of field-of-membership improvements and talked with Matt about sharing our updated list even before the working group is organized,” Dunn said. “We welcome the field-of-membership review and will be weighing in with the working group as it is organized and throughout its considerations and the development of its recommendations.”

Chairman Matz Writes to Defense Department

Last week, NCUA Chairman Debbie Matz sent the Department of Defense (DoD) a comment letter on their proposed rule implementing payday lending regulations under the Military Lending Act. Chairman Matz urged the DoD to exempt payday alternative loans (PALs) from the DoD’s payday lending regulation. NCUA believes that the agency’s PALs regulation provides sufficient consumer protection while providing affordable credit. CUNA appreciates Chairman Matz weighing in on this important issue. Her letter helps call more attention to the consumer friendly lending practices of credit unions. CUNA will also be filing a joint comment letter with other credit unions trade associations detailing concerns with the DOD’s proposed rule.

CUNA Urges Credit Union Exemption from Defense Proposal

In a comment letter we will file today with the DoD, CUNA notes several concerns with the proposal to amend DoD’s rules on Limitations on Terms of Consumer Credit Extended to Service Members and Dependents, which implement the Military Lending Act (MLA). The letter was developed and signed jointly by organizations representing the interests of the credit union industry, including the African-American Credit Union Coalition, Defense Credit Union Council, National Association of Federal Credit Unions, and National Association of State Credit Union Supervisors.

We take very seriously remarks by DoD and others that certain types of lenders continue to alter their products and services in order to evade the important protections of the MLA. However, because credit unions are not predatory lenders, we urge DoD to exempt credit unions from any modifications to DoD’s rule concerning limitations on terms of consumer credit extended to service members and their dependents. The increased costs and unintended consequences of the proposal, especially on smaller credit unions, could negatively impact the delivery of high quality reasonably priced financial products and services to our troops, their families, and their dependents. From our perspective as credit unions’ advocates, any changes to the current rules should curtail and eliminate the unscrupulous business practices of organizations targeting our military personnel—not credit unions that do not engage in abusive practices and are heavily regulated by Federal and/or State supervisory agencies. 

In addition, our letter asks DoD to ensure the proposed changes will not adversely affect credit unions’ ability to make loans under NCUA’s Payday Alternative Loan (PAL) program. We also ask that DoD refrain from making changes to the process by which creditors determine whether a consumer is a “covered borrower” using the Defense Manpower Data Center (DMDC) database, if DoD does not exempt credit unions from the proposal.

CUNA Seeks Feedback on NACHA Same Day ACH Proposed Rule by January 23

CUNA is seeking feedback from credit unions on our Comment Call through January 23 regarding NACHA–the Electronic Payments Association’s Same Day ACH proposed rule. The proposed rule would provide a new, ubiquitous capability for moving automated clearinghouse (ACH) payments faster. Currently, most ACH payments are settled on the next business day; current ACH schedules and capabilities would continue to apply to transactions that are not designated as Same Day ACH. For further information and our summary of the rule changes, please visit the CUNA website.

The proposal would amend the NACHA Operating Rules to enable the option for same-day processing of virtually any ACH payment (for all types of credits and debits) except for international transactions and individual transactions above $25,000. NACHA believes there are many uses of ACH payments for which businesses and consumers could benefit from same-day processing, including business-to-business, same-day payroll, expedited bill, and account-to-account payments.

CUNA and its Payments Subcommittee will be reviewing the proposed rule in detail to assess the potential impact, including the costs and benefits for credit unions. We continue to meet and discuss Same Day ACH and faster payments issues with NACHA, the Federal Reserve Banks, financial trade associations, corporate credit unions, and other key stakeholders.

GAO Issues Report on Dodd-Frank Act and Regulators’ Analytical and Coordination Efforts

The U.S. Government Accountability Office (GAO) recently released a report on the Dodd-Frank Act and regulators’ analytical and coordination efforts. The GAO found that federal financial regulators, including the Federal Reserve Board, FDIC, NCUA, OCC, CFPB, and others, have continued to conduct required regulatory analyses for rules issued pursuant to the Dodd-Frank Act. Financial regulators must consider costs and benefits of their rulemakings in certain circumstances. CUNA is reviewing the report and will be following up on GAO’s analysis as it relates to NCUA.

The report also noted that regulators coordinated, as required or voluntarily, on 34 of the 54 Dodd-Frank rulemakings that GAO reviewed. The full impact of the Dodd-Frank Act may be uncertain because many of its rules have not been finalized or insufficient time has passed to assess the impacts of final rules, GAO said.

Current CUNA Regulatory Calls to Action

  • Department of Defense Proposes Changes to Military Lending Act Rule (comments due by December 26)
  • NCUA Issues Joint Proposal on Flood Insurance (comments due by December 29)
  • NCUA Proposes Changes to its Corporate Credit Union Rule (comments due by January 5)
  • FHFA Proposes Changes to FHLB Membership Rules (comments due by January 12)
  • IRS Proposes to Remove 36-Month Non-Payment Testing Period Rule (comments due by January 13)
  • NACHA Issues Same Day ACH Proposal (comments due by February 6)

For other items of interest, visit CUNA’s Regulatory Advocacy page.

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