Compliance Center: CFPB, NCUA Publish Rulemaking Agenda Updates

The Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration (NCUA) have posted semi-annual updates to their rulemaking agendas.  Federal agencies typically release regulatory agendas twice a year. Each spring and fall, the Office of Management and Budget (OMB) and the Regulatory Information Service Center (RISC) work with Federal agencies to compile a list that outlines most of the rulemaking activities of the agencies for the coming 12-month cycle. It also includes recently-completed rulemakings.

The rulemaking agenda shows the various stages the rules may be in. These include:

  • Pre-Rule Stage—The agencies are studying the issues, writing reports, reaching out to stakeholders and attempting to determine the scope of the potential rulemaking.
  • Proposed Rule Stage—Now the agencies are getting more serious. This is when they will release the Notice of Proposed Rulemaking which contains their proposed rule.
  • Final Rule Stage—This is the point when the agencies have either just released their final rule or are in the process of releasing the final rule.

The following items may have potential compliance implications for credit unions. 

From the CFPB:

Final Rule Stage

  • Amendments to the mortgage servicing rules—Final rule is expected to address loss mitigation requirements when the borrower is a successor in interest and monthly statements when the borrower is in bankruptcy.
  • Amendments to Expedited Funds Availability Act—The potential final rule may be issued at the end of the year and builds on the 2011 proposed rule.  It updates Regulation CC and focuses on fully-electronic interbank check collection and return.  In addition, the rule would change the exception holds that credit unions may place on deposited items and require new disclosures.
  • Prepaid accounts—Provides Regulation E protections to prepaid accounts such as prepaid debit cards.

Proposed Rule Stage

  • Amendments to TRID—Hopefully will provide clarification and guidance to clear up some of the confusion with the largest change to mortgage lending in the last 20 years.
  • Gramm-Leach-Bliley—More of a technical rulemaking to the annual privacy notice requirements in Regulation P to incorporate the law as passed by Congress with the FAST Act.
  • Automated Valuation Models—A proposed rule that is intended to create quality control standards for automated valuation models used in real estate transactions.
  • Arbitration Agreements—Requiring changes to mandatory pre-dispute arbitration clauses used in financial products.
  • Payday, auto title, and small dollar lending—This proposed rule just came out last Thursday and is designed to curb some of the more egregious practices of the payday lending industry.  While it seems to exempt PAL style programs, credit unions will need to review their programs in comparison to the requirements of the proposed rule.

Prerule Stage

  • Overdrafts—Building on a couple of white papers released by the CFPB over the last few years.  Potential rulemaking may look at the ordering of transactions, involuntary account closures, and even opt-in practices.
  • Debt Collection—Focusing primarily on updating the Fair Debt Collection Practices Rule, the potential rulemaking could focus on the information regarding the debt that is passed to debt collectors, information regarding the consumer’s right that is explained to consumers, and collection practices such as the use of social media, call frequency and threats of legal action when the debt collector has no intention of following through on.
  • Business Lending Data—A Dodd-Frank Act requirement to update Regulation B and require financial institutions to gather HMDA-like data for lending to women-owned, minority-owned, and small businesses.

From the NCUA:

Final Rule Stage

  • Field of Membership—The NCUA is expecting to finalize their proposed changes to their FOM rules. The changes are designed to provide Federal Credit Unions with more flexibility when it comes to membership.
  • Asset Securitization—Is a rule governing the ability for federal credit unions, within limits, to securitize their own loans.

Proposed Rule Stage

  • Designation of low-income status—The NCUA may issue this proposed rule later in the year. The rule is intended to make the process for designating a credit union as “low-income” clearer and more manageable for credit unions.
  • FCU occupancy of acquired premises—The NCUA released this proposed rule last month. The rule would allow a FCU to partially occupy an acquired premise and eliminates the full occupancy requirement.
  • Supplemental Capital—The NCUA is looking at incorporating supplemental capital provisions in the risk-based capital context.
  • Incentive Based Compensation Arrangements—Will apply to credit unions over $1 billion in assets.  For Northwest credit unions over this threshold, the rule would require them to have Board approval on incentive-based compensation arrangements which are appropriately balanced and designed to not encourage inappropriate risks. 
  • Automated Valuation Models—A proposed rule that is intended to create quality control standards for automated valuation models used in real estate transactions.

Compliance Question of the Week

We keep hearing conflicting requirements regarding the retention of account statements for our members. Are those records required to be kept permanently?

According to the NCUA, yes. Financial institutions that fall under different federal regulations might have different retention requirements, so credit unions should pay careful attention to the guidelines issued by the NCUA.

The NCUA’s regulations provide for two classes of records that should be retained permanently: official records and key operational records. The records are defined as follows:

  1. Official records of the credit union that should be retained permanently are:
    • Charter, bylaws, and amendments.
    • Certificates or licenses to operate under programs of various government agencies, such as a certificate to act as issuing agent for the sale of U.S. savings bonds.
  2. Key operational records that should be retained permanently are:
    • Minutes of meetings of the membership, board of directors, credit committee, and supervisory committee.
    • One copy of each financial report, NCUA Form 5300 or 5310, or their equivalent, and the Credit Union Profile report, NCUA Form 4501, or its equivalent as submitted to the NCUA at the end of each quarter.
    • One copy of each supervisory committee comprehensive annual audit report and attachments.
    • Supervisory committee records of account verification.
    • Applications for membership and joint share account agreements.
    • Journal and cash record.
    • General ledger.
    • Copies of the periodic statements of members, or the individual share and loan ledger. (A complete record of the account should be kept permanently.)
    • Bank reconcilement.
    • Listing of records destroyed.

While this is a lot of documentation to retain permanently, the NCUA doesn’t require a specific method of retention. This means that these documents can be stored electronically.


Appendix A to Part 749

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that credit unions showed continue loan growth during the first quarter of 2016.

The NCUA will host a webinar aimed at helping credit unions comply with the Military Lending Act changes that take effect on October 3rd. The webinar will be held on Wednesday, June 29, 2016 and credit unions that wish to participate can register here.

The NCUA announced that it has developed a new fact sheet on the CUSO sector. The fact sheet includes the levels of credit union investments in CUSOs, the number of credit unions that CUSO serves, and other data.

The NCUA will be hosting a webinar aimed at helping low-income designated credit unions become certified as Community Development Financial Institutions (CDFI).The webinar will be held on Thursday, June 23, 2016 and credit unions can register here.

The NCUA announced that it will be hosting a webinar on internal controls and accounting for small credit unions on June 22, 2016. Credit unions interested in the webinar can register here.

Consumer Financial Protection Bureau (CFPB)

The CFPB announced the release of its proposed payday lending rule. Comments on the proposed rule are due September 14, 2016.

Federal Reserve Board (FRB)

The FRB delivered its annual report to Congress, detailing its operations and activities during 2015.

The FRB released the June edition of its Beige Book.

The FRB announced that same day ACH testing will begin on June 28, 2016.

The FRB released its June issue of Fedfocus.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of June 3, 2016. The last update prior to this was June 2, 2016.

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, Federal, NCUA.