CUNA Regulatory Advocacy Update

Here is what you need to know about credit union advocacy this week:

  • The NCUA Board will meet on Thursday to consider, among other things, the agency’s budget and a proposed rule on field of membership.
  • The House will consider CUNA supported legislation (H.R. 1210) to deem mortgages held in portfolio by credit unions as qualified mortgages.

In Congress

The House returns to session today and is expected to consider bills under suspension of the rules.  Later this week, the House is expected to consider the “Tribal Labor Sovereignty Act of 2015” (H.R. 511); the “Portfolio Lending and Mortgage Access Act” (H.R. 1210); the “Reforming CFPB Indirect Auto Financing Guidance Act” (H.R. 1737); and the “Federal Reserve Oversight Reform and Modernization Act” (H.R. 3189).

The Senate is expected to consider LaShann Moutique DeArcy Hall, of New York, to be US District Judge for the Eastern District of New York.  No legislation has been scheduled yet, but there is speculation that the Senate could consider an immigration bill at some point this week.

We are also carefully following activity surrounding the House-Senate Conference Committee on the Highway Trust Fund Bill.  As we have previously noted, this legislation includes two key removing barriers provisions:  one would modernize privacy notification requirements and the other would permit privately insured credit unions to join the Federal Home Loan Bank System.  The current funding authorization for the Highway trust fund expires on Friday; if the conference committee is unable to reach an agreement before then, it is likely that both chambers will approve another short-term extension.

As usual, we are also following committee hearings relevant to credit unions, including the following:

Tuesday

  • The House Financial Services Committee Monetary Policy and Trade Subcommittee will hold a hearing on “Dodd-Frank Five Years Later: What Have We Learned from Conflict Minerals Reporting?”
  • The House Energy and Commerce committee Subcommittee on Communications and Technology will hold an oversight hearing on the Federal Communications Commission.  All five FCC Commissioners are expected to testify.  CUNA will submit a letter for the record of this hearing.

Thursday

  • The House Financial Services Committee Oversight and Investigations Subcommittee will hold a hearing on “Oversight of the Financial Stability Oversight Council: Due Process and Transparency in Non-Bank SIFI Designations.”

CUNA Expresses Concern Regarding NCUA’s Budget

In advance of this week’s NCUA Board meeting, we sent a letter to Chairman Matz expressing our concerns with the budget and the budget process.  We remain very concerned that the NCUA budget continues to increase at a time when the credit union system is very healthy. We do not believe the agency needs to increase its budget to fulfill its mission. The financial crisis is over. The credit union system is healthy and strong.  We believe that NCUA should be proposing budget reductions to decrease credit unions’ financial obligation to the agency.

The letter urges NCUA to manage costs to the agency as a result of new regulations using existing resources, reduce staff costs in alignment with the reduction in credit unions subject to NCUA supervision, commit to moving toward an 18-month examination cycle through examination efficiency, coordinate examinations with state regulators, provide credit unions with more information regarding agency contractors, increase overall budget transparency and accountability, and provide more information and seek public comment regarding the Overhead Transfer Rate (OTR).

We put forward what we believe are reasonable recommendations that will enhance the agency’s efficiency as well as ensure credit unions have access to appropriate information about the agency’s budget and resource allocations.

Field of Membership Proposal Expected to be Released Thursday

This week, we expect NCUA to propose a new field of membership regulation that incorporates several of the recommendations we proposed earlier this year.

As part of our ongoing and comprehensive effort to improve the operating environment for credit unions to serve their members, we encouraged NCUA to adopt new field of membership regulations that recognize and adapt to the changes that have taken place in the marketplace and in how credit unions serve members.  We encouraged the agency to take immediate administrative action in areas that did not require a change in regulation, to propose new regulations to expand consumer and small business access to credit unions, and to support statutory changes that go beyond what is presently permitted by law.

The first fruit of this effort took place last month when NCUA shaved at least two months off the amount of time necessary to expand a community charter by delegating approval authority to the Office of Consumer Protection.  Previously these approvals required a full vote of NCUA’s board.  Now, we’re excited to see a new regulatory proposal.

Here are some things CUNA recommended that we are keeping our eye out for. We encouraged NCUA to:

Include a combined statistical area in the definition of well-defined local community.

  • Allow a Congressional district to be considered a well-defined local community (this would allow credit unions to serve an entire state in a state that has only one Congressional district).
  • Eliminate the population test associated with the definition of “rural district.”
  • Reinstate a narrative approach for defining a community.
  • Eliminate the geographic limitations on TIP charters.
  • Allow TIP charters to serve independent contractors and others who support the work of the TIP.
  • Allow groups with 3,000 or more potential members to more easily be added to multi-group federal credit unions.

The proposal will be released on Thursday.  We will have an immediate reaction to the proposal on the Removing Barriers Blog and in News Now, followed by a more detailed analysis next week.

H.R. 1210 – the Portfolio Lending and Mortgage Access Act

CUNA strongly supports H.R. 1210, which would treat mortgages held in portfolio at credit unions and other mortgage lenders as qualified mortgages (QM) for purposes of the Consumer Protection Financial Bureau’s (CFPB) mortgage lending rules.  We have testified in support of this legislation several times because we believe this will provide credit unions significant regulatory relief.  Nearly three quarters of mortgage originating credit unions retain their mortgages on portfolio, and the mortgages these credit unions originate represent approximately 60 percent of all credit union first mortgage originations.

We will be sending a letter to House members later today encouraging them to vote for the bill.

Pending Regulatory Comment Calls

CUNA intends to comment on the following pending regulatory proposals.  For our comment letter to have the greatest impact, we need to hear from you.  Please consider whether and how these proposals would affect your credit union.  If you have feedback or questions regarding any proposal, please contact the CUNA staff listed with each proposal.

We encourage Leagues and credit unions to use PowerComment to file comment letters with regulators.  For more information regarding these proposals, please follow the links below:

Issue Comment Period Deadline Agency CUNA Staff Contact
Investments & Deposit Activities – Banks Notes November 23, 2015 NCUA Lance Noggle
OMB re: Joint Standards for Assessing Diversity Policies and Practices December 7, 2015 Joint TBD

Last Week on the Removing Barriers Blog

Letter to Transportation Bill Conferees Supporting Privacy Notice and FHLB Provisions

Last week, we wrote a letter to House and Senate conferees on the highway transportation bill, in support of provisions that remove regulatory barriers.

Department of Labor Indicates that its Final Rule on Overtime Pay will be Delayed

New information suggests that the agency’s rule on overtime pay isn’t likely to appear before late 2016.

CUNA Expresses Concerns to CFPB about SBREFA Proposals for Arbitration Agreements

Last week, In a letter to the CFPB, SBA, and Office of Information and Regulatory Affairs (OIRA), we expressed concerns about proposals under consideration for arbitration agreements.

Potential New Cybersecurity Regulations Unveiled in New York

New York’s credit union and bank regulator recently released potential new regulations aimed at increasing cybersecurity in financial services.

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