Federal Regulators Release Updated Rulemaking Agenda

See highlights of the latest updates to the unified agenda from the CFPB, NCUA, and FinCen.

1/2/18

Picture of a gavelIf you didn’t get enough presents over the holidays, federal regulators have slipped another one under the tree. The fall update to the Unified Agenda has been published online. By law, federal regulatory agencies must provide insight into their upcoming rulemaking.

Here are a few highlights from the latest updates to the unified agenda.

Consumer Financial Protection Bureau (CFPB)

Business Lending Data

This is a pre-rule holdover from the Spring Unified Agenda. Section 1071 of the Dodd-Frank Act requires the CFPB to create rules that will require financial institutions to compile, maintain, and report information concerning credit applications made by women-owned, minority-owned, and small businesses.

The CFPB is currently in the pre-rule stage, and is focusing on outreach and research to develop an understanding of the players, products, and practices in the small business lending market. The CFPB then expects to begin developing proposed regulations concerning the data to be collected, potential ways to minimize burdens on lenders, and appropriate procedures and privacy protections needed for information-gathering and public disclosure.

Overdraft Services

This is another pre-rule holdover from the Spring Unified Agenda. After several years of research, the CFPB is looking into changes to overdraft programs. They are currently engaged in consumer testing of revised opt-in forms, and considering whether other regulatory changes may be warranted to enhance consumer decision-making.

Credit Card Act

The CFPB is considering rules to modernize their database of credit card agreements to improve the submission process and make the database more efficient for both industry and the CFPB, which would allow consumers and the general public to access and analyze information more easily.

Regulation CC

At the end of May this year, the Federal Reserve Board (FRB) released final rule amendments to Regulation CC, which are intended to create a framework for electronic check collection and returns, and create new warranties for electronic checks. This amendment to the check processing will go into effect on July 1, 2018.

Other provisions are subject to the CFPB’s joint rulemaking, including the period for funds availability and revising model disclosures. The CFPB and FRB continue to work on these aspects with the intent to issue a final rule that includes provisions within the CFPB’s authority.

Debt Collection

The CFPB continues to work on updating rulemaking related to the Fair Debt Collection Practices Act (FDCPA). The CFPB provided the SBREFA panel with an outline last year and intend to issue a proposed rule concerning debt collectors’ communication practices and consumer disclosures. The CFPB intends to follow up with separate rulemaking regarding information flows between creditors and FDCPA collectors and about potential rules to govern creditors that collect their own debts.

Mortgage Servicing Rules

The proposed rule makes changes to the periodic statement and coupon book requirements when a debtor is in bankruptcy, specifically making changes to the single-billing-cycle exemption. It will update the exemption and supporting commentary to become a single-statement exemption.

Regulation P

Still on the CFPB’s rulemaking agenda is to update Regulation P to include the exemption from annual privacy notice requirements that went into law when the FAST Act was passed at the end of 2015.

TRID Amendments

The CFPB is also working on TRID clarifications on the timing of when a creditor may use a closing disclosure to determine if an estimate is in good faith. This primarily applies to the time after an original closing disclosure has been issued and circumstances change what was previously disclosed.

HMDA

Currently, the temporary reporting threshold for HELOCs is 500 originations. The CFPB intends to conduct follow-up rulemaking considering whether to make permanent adjustments to the threshold.

National Credit Union Administration (NCUA)

Official Advertising Statements

The NCUA has proposed allowing credit unions to use the short version of the NCUA’s “official advertising statement.” The fourth option would be “Insured by NCUA.” In addition, the NCUA is looking to change the exemption for radio and television ads back to 30 seconds. Finally, the proposal would remove the requirement to include the official advertising statement on statements of condition that are required to be published by law.

Real Estate Appraisals

The NCUA is preparing a proposed rule to increase the current $250,000 threshold level at or below which appraisals would not be required for commercial real estate transactions.  Credit unions would still need to obtain valuations on commercial real property for transactions below the revised threshold.

Capital Planning and Stress Testing

The NCUA is preparing a proposed rule for public comment that would amend its regulations regarding capital planning and stress testing for federally insured credit unions with more than $10 billion in assets (covered credit unions). The proposal would reduce regulatory burden by removing some of the capital planning and stress testing requirements currently applicable to certain covered credit unions.

The proposal would also make the NCUA’s capital planning and stress testing requirements more efficient for covered credit unions and the NCUA by, among other things, authorizing covered credit unions to conduct their own stress tests and allowing them to incorporate the stress tests into their capital plan submission to NCUA.

Loans in Areas Having Special Flood Hazards-Private Flood Insurance

There is additional joint rulemaking to implement the Biggert-Waters Flood Insurance Reform Act of 2012, which created requirements and provisions for the acceptance of private flood insurance.

Chartering Manual – Community Chartering

The NCUA Board previously proposed amending its chartering and field of membership rules to give applicants for community charter approval the opportunity to submit a narrative to establish common interests or interaction among residents of the area it proposes to serve, thus qualifying the area as a well-defined local community. The Board also proposed to increase up to 10 million the population limit on a community consisting of a statistical area or portion thereof.

In addition, the Board proposed permitting credit unions to designate a portion of the area as its community without regard to division boundaries, when such area is subdivided into metropolitan divisions. NCUA is currently considering the public comments received on the proposal and will be working toward finalizing the rule.

Requirements for Insurance: NCUSIF

With the closing of the Corporate Stabilization Fund in October, the NCUA is looking to amend its share insurance requirements rule to clarify the calculation of share insurance fund equity distributions.

FinCEN

Cross-Border Electronic Transmittals of Funds

FinCEN is planning on issuing a proposed rule that would require certain financial institutions to report transmittal orders associated with certain cross-boarder transmittals of funds in the middle of 2018. Further details will be found in the proposed rule once it is issued.

AML Programs for Banks Lacking a Federal Functional Regulator

The proposed rule set up the minimum standards for AML programs for all financial institutions regardless of whether or not they are subject to Federal regulation and oversight.  Most credit unions in Idaho, Oregon, and Washington are insured through the NCUSIF and subject to NCUA Federal oversight. This rulemaking would apply to credit unions that are privately insured.

Question of the Week

When is a certificate of deposit presumed abandoned in OR and WA?

A non-renewing certificate of deposit is presumed abandoned three years after maturity.  If the certificate is automatically renewing, it is presumed abandoned three years after the expiration of the initial review period.  If the certificate’s renewal period occurs in less than one year, abandonment begins after one year.

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Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced the release of its Third Quarter state credit union data, which shows positive loan growth in all states.

The recording of the NCUA’s December Board Meeting is now available.

The NCUA announced that it will hose a webinar that will shed light on the NCUA’s New Office of Credit Union Resources and Expansion, or CURE. The webinar will be held on Wednesday, January 10, 2018 and interested credit unions can register here.

The NCUA, jointly with the FRB, FDIC, and OCC, issued Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster.

The NCUA issued Letter to Credit Unions 17-CU-9, which outlines the NCUA’s Supervisory Priorities for 2018. Cybersecurity and BSA Compliance remain at the top of the list, followed by internal controls and fraud prevention, interest rate and liquidity risk, automobile lending, commercial lending, and consumer compliance.

Consumer Financial Protection Bureau (CFPB)

The CFPB released its biennial report on the State of the Credit Card Market. The study found that over the past few years, the total amount of credit, number of accounts, and average card debt have all increased.

The CFPB issued a statement on compliance with the Home Mortgage Disclosure Act. In the statement, the CFPB announced that it does not intend to assess penalties for errors in data collected in 2018 and is even reconsidering certain portions of the mortgage data rule.

The CFPB issued a statement on its Prepaid Rule. In the statement, the CFPB announced that it expects to issue a final rule amending certain aspects of this rule. Because of the amendments, the CFPB expects to extend the effective date of the rule to ensure that institutions have enough time to implement the changes.

The CFPB released an updated rate spread calculator and check digit tool on its Resources for HMDA Filers page.

Federal Reserve Board (FRB)

The FRB released its December issue of Fed 360. This month’s issue includes information on risk management, liquidity, and FedACH.

The FRB issued an amendment to its Regulation A, which increases the rate for primary and secondary credit at each Federal Reserve Bank.

The FRB also issued an amendment to its Regulation D that revise the rate of interest paid on balances maintained to satisfy reserve balance requirements and the rate of interest paid on excess balances maintained at Federal Reserve Banks.

The FRB released a payments study that indicated that credit card payments rose significantly from 2015 to 2016.

Department of Housing and Urban Development (HUD)

HUD released a guide, Homeowners Guide to Success, aimed at helping homeowners understand the first steps they should take if they are at risk of missing a mortgage payment or facing foreclosure.

Federal Housing Finance Agency (FHFA)

FHFA Director Watt issued a statement on the Capital Reserves for Fannie Mae and Freddie Mac.

The FHFA released its Third Quarter Foreclosure Prevention Report. The report found that over 41,000 foreclosure prevention actions occurred during the third quarter of 2017.

Federal Deposit Insurance Corporation (FDIC)

The FDIC released a report detailing how the agency responded to the financial and banking crisis that began in 2008.

The FDIC, jointly with the FRB, announced that a review of eight of the largest banking organizations has found that no deficiencies were severe enough to trigger a resubmission process.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of December 26, 2017. The last update prior to this was December 22, 2017.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.