Regulators Release Fall Update to Rulemaking Agendas

BCFP focusing on a number of HMDA changes and adjusting the timeline for implementing Dodd-Frank Section 1071.

Compliance image10/30/18

Both the Bureau of Consumer Financial Protection (BCFP) and the National Credit Union Administration (NCUA) have posted their updated rulemaking agendas in the Unified Agenda. The Unified Agenda includes rulemaking actions in pre-rule, proposed rule, and final rule stages. In addition, the CBFP provided additional insight into their rulemaking focus in their press release fall 2018 rulemaking agenda.

BCFP rulemaking that stands out as having implications for credit unions includes:

Business Lending Data

One of the first things that stands out is what is missing. While Section 1071 of the Dodd-Frank Act requires the BCFP to create rules for financial institutions to compile, maintain, and report information concerning credit applications made by women-owned, minority-owned, and small businesses, the press release states that the bureau is focusing on a number of HMDA changes currently and is adjusting the timeline for implementing this Dodd-Frank directive.

Threshold adjustment for HPML Escrow provisions in 1026.35

The BCFP is proposing increasing the asset threshold requirement for when financial institutions are required to escrow for HPML first lien loans to $10 billion.

Property Assessed Clean Energy Loans

The BCFP is looking into creating special ability to repay requirements for PACE loans.

HMDA Amendments

The BCFP has three separate rulemakings in their agenda for HMDA. The first is looking at making permanent the 500 or more HELOC reporting threshold. The second is based on changes from S. 2155 and looking at the additional data fields that have been added. And a final one looking at what data needs to be scrubbed from the LARs for public reporting purposes.

Regulation CC

Some provisions of Regulation CC 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 jointly 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 of what they are thinking in 2016. The CFPB is preparing a proposed rule focused on FDCPA collectors that may address such issues as communication practices and consumer disclosures.

Payday, auto title, and similar lending products

In early 2019, the BCFP intends to issue proposed rulemaking that will address the Bureau’s reconsideration of the Payday rule as well as address changes the August 2019 compliance date.

Major NCUA rulemaking includes:

Alternative Capital

The NCUA issued an advanced notice of proposed rulemaking to gather information from on the utility and practicality of alternative capital in the risk-based capital context. The NCUA is considering the public comments received and moving toward a proposed rule.

Commercial Real Estate Appraisals

The NCUA has released proposed rule changes increasing the threshold over which an appraisal would be required to $1,000,000 for non-residential, commercial real estate transactions. In addition, per section 103 of the Economic Growth, Regulatory Relief, and Consumer Protection Act exempts real property transactions located in rural areas from requiring an appraisal if the transaction value is less than $400,000 and no state-licensed or certified appraiser is available.

Federal Credit Union Bylaws

The NCUA is preparing an advanced notice of proposed rulemaking to provide stakeholders with an enhanced opportunity to comment on changes to the Federal Credit Union Bylaws.

Loans to Members and Lines of Credit to Members

While making no material changes to 701.21, the NCUA is looking are cleaning up this section with clarifications.

Loans in Areas Having Special Flood Hazards-Private Flood Insurance

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.

Payday Alternative Loans

The NCUA issued an amendment to the NCUA’s general lending rule to provide federal credit unions (FCUs) with an additional option to offer Payday Alternative Loans (PALs). This proposal would not replace the current PALs rule, but rather would be an alternative, with differing terms and conditions, for FCUs to offer PALs to their members. Specifically, this proposal (PALs II) would differ from the current PALs rule by modifying the minimum and maximum amount of the loans, eliminating the minimum membership requirement, and increasing the maximum maturity for these loans. All other features of the current PALs rule would be incorporated into PALs II. The proposal would also pose specific questions to solicit comments and feedback from interested stakeholders on the possibility of creating a third alterative (PALs III), which could include differing fee structures, loan features, maturities, and loan amounts.

Question of the Week

Can a business account have a designated beneficiary?

It is generally not a good idea to allow a beneficiary on a business account since businesses technically do not die. What happens to the funds in a business account after the death of an individual should be addressed elsewhere in the business documents and/or in a will.

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that it has rescheduled its December board meeting to Thursday, Dec. 13. The NCUA also posted a recording of its September board meeting.

NCUA Chairman McWatters delivered a speech to the National Federal of Community Development Credit Unions and spoke about the importance of bipartisanship collaboration to produce results. McWatters also stated that the NCUA awarded $2 million in Community Development Revolving Loan Fund grants to 203 low-income credit unions.

The NCUA announced that it will host a webinar to update credit unions on HMDA and consumer compliance. The webinar will be help on Nov. 14 and credit union interested in attending can register here.

Bureau of Consumer Financial Protection (BCFP)

The BCFP announced that it expects to issue proposed rules in January 2019 that will reconsider its Payday Lending Rule.

The BCFP released its Complaint Snapshot: 50 states. The report shows the amount of complaints received per state from Jan. 1, 2015 through June 30, 2018. The report goes on to break down the complaints by type for each state.

The BCFP released its assessments of its 2013 Remittance Transfer Rule.

The BCFP released HMDA filing instructions for data collected in 2019.

Federal Reserve Board (FRB)

The FRB released its updated Reserve Maintenance Manual.

The FRB issued a final rule impacts its Reserve Requirements for Depository Institutions for 2019.

The FRB released its Oct. 24, 2018 issue of the Beige Book.

The minutes from the FRB’s Aug. 27 through Sept. 26 Discount Meetings are now available.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of Oct. 25. The last update prior to this was Oct. 23.

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