Regulators Release Updated Rulemaking Agendas

Unified Agenda includes rule-making actions in pre-rule, proposed rule, and final rule stages.

6/11/2019 

Metal gears with words: Rules, Regulations, Compliance, Standard, Policies.

The Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration (NCUA) have released their updated rulemaking agendas, which have been published in the Unified Agenda.  The Unified Agenda includes rulemaking actions in pre-rule, proposed rule, and final rule stages. In addition, the CFPB provided additional insights into their rulemaking in their press release about the Spring 2019 rulemaking agenda. 

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

HMDA Rules 
The CFPB released a proposed rule to adjust the reporting transactional coverage threshold requirements for both closed-end mortgage loans and open-end lines of credit on May 2, 2019. 

In addition, the CFPB is requesting information regarding certain data fields that are being collected and reported under HMDA. 

Business Lending Data 
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 issued an RFI in 2017 to determine the types of credit products offered and the types of data available. The information received will help the CFPB determine how to implement the rule efficiently while minimizing burdens on lenders. 

Payday, Auto Title, and Similar Lending Products 
The CFPB released the final rule pushing back the mandatory compliance date for the underwriting provisions for the Payday, Vehicle Title, and Certain High-Cost Installment loans on June 6, 2019. 

In addition, the CFPB issued a proposed rule to remove the underwriting provisions entirely from the Payday, Vehicle Title, and Certain High-Cost Installment loan rule on February 6, 2019. 

Regulation CC 
The CFPB released proposed rulemaking on November 20, 2019, looking to make adjustments to the dollar amounts within Regulation CC. In addition, the proposed rule reopens comment on the 2011 proposed rule changes to Regulation CC. The unified agenda shows an expected final rule for inflation adjustments to the final rule to be issued during the summer of 2019. 

Debt Collection 
The CFPB continues to work on updating rulemaking related to the Fair Debt Collection Practices Act (FDCPA). The CFPB released proposed rule changes to the FDCPA on May 7, 2019. 

Remittance Transfers 
The CFPB is requesting information related to the remittance transfer rule regarding the use of estimates, which will be expiring on July 21, 2020. In addition, the CFPB is looking for other potential remittance transfer issues. 

Major NCUA rulemaking includes: 

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

Supervisory Committee Audits and Verifications 
The NCUA is finalizing the proposed amendments to the regulations governing the responsibilities of the Supervisory Committee to obtain an annual audit of its credit union. 

Real Estate Appraisals (Non-Residential/Rural) 
The NCUA released a proposed amend the threshold level below which appraisals would not be required for commercial real estate transactions to $1,000,000. The other federal regulators had increased their threshold to $500,000. The NCUA expects to release the final rule during the summer of 2019. In addition, the final rule would include the S. 2155 threshold of $400,000 for residential real estate related transactions in rural areas where few licensed appraisers can be found. 

Real Estate Appraisals (Residential) 
The NUCA is looking into amending the threshold level below which appraisals would not be required for residential real estate-related transactions. In 2018, the other federal regulators proposed increasing the threshold to $400,000. 

Payday Alternative Loans 
The NCUA is working towards final rule amendments 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 alternative (PALs III), which could include differing fee structures, loan features, maturities, and loan amounts. 

Federal Credit Union Bylaws 
The NCUA issued a notice of proposed rulemaking to update the Federal Credit Union Bylaws, and is now working towards a final rule incorporating comments from stakeholders. 

Golden Parachute and Indemnification Payments 
The NCUA  Board proposes to revise its regulation regarding the prohibition against a federally insured credit union from making golden parachute and indemnification payments to an institution-affiliated party under certain circumstances. The proposed rule improves the organization and clarity of the regulation and includes a section on merger-related financial arrangements. 

Purchase, Sale, and Pledge of Loans 
The NCUA is working on a proposed rule to clarify federal credit unions’ authority to purchase, sell, and pledge loans. 

Credit Union Service Organizations (CUSOs) 
The NCUA is proposing a rule to expand the permissible lending activities for CUSOs under part 712. 

Investment and Deposit Activities 
The NCUA believes there are certain provisions in Part 703 that are overly restrictive and unnecessary from a safety and soundness perspective. The revised Part 703 will provide credit unions with more flexible investment options. 

Compensation in Connection with Loans to Members and Lines of Credit to Members 
The NCUA issued an advance notice of proposed rulemaking to solicit comments on potential modifications to the agency’s regulations governing compensation in connection with loans and lines of credit to members. 

Rate Ceiling for Federal Credit Union Loans
The NCUA is planning on issuing an advance notice of proposed rulemaking to solicit comments related to the interest rate ceilings for loans granted by federal credit unions. 

Question of the Week 

Q. Does the credit union have to give notice prior to charging an inactive or dormant account fee?

A. Yes, under the unclaimed property statutes in Idaho, Oregon,and Washington, a written notice must be sent to a member at the member’s last known address no more than three months before charging a dormant account fee. 

Related Links: 

IDS 14-506 
ORS 98.308(2)(d) 
RCW 63.29.060(4)(b) 

Legal Briefs 

National Credit Union Administration (NCUA) 
NCUA released Q1 2019 credit union system performance data. 

Consumer Financial Protection Bureau (CFPB) 
CFPB released a consumer alert regarding mortgage closing scams. 
CFPB released a final rule which delays the compliance date for the mandatory underwriting provisions of the Payday Lending Ruel to November 19, 2020. 

Federal Communications Commission (FCC) 
FCC approved a Declaratory Ruling to affirm that voice service providers may, as the default, block unwanted calls based on reasonable call analytics, as long as their customers are informed and have the opportunity to opt out of the blocking. 

Washington State Department of Labor & Industries (L&I) 
Washington L&I released proposed rulemaking that would change the overtime exemption thresholds for executive, administrative, and professional workers. 

Washington State Department of Financial Institutions Division of Credit Unions (DCU) 
Washington DCU issued DCU Bulletin B-19-03 as a reminder of the upcoming July 10, 2019 ,NASCUS Credit Union Executive Forum. 

Office of Foreign Assets Control (OFAC) 
OFAC has updated the SDN list as of June 7, 2019. The last update prior to this was May 23, 2019. 

Questions? Contact the Compliance Hotline: 1.800.546.4465; [email protected].