Regulators Release Updated Rulemaking Agendas

The Federal Financial Regulators recently released the Fall update to their rulemaking agendas:

The Consumer Financial Protection Bureau has five items listed on its rulemaking agenda.

Small Business Lending Data Collection – In October, the CFPB issued a proposed rule that would implement the Dodd-Frank Act requirement which would require financial institutions to report information related to small business credit applications. The information would include the type of credit applied for, demographic and other information about the small business credit applicant, and key elements of the price of the credit offered.

Availability of Electronic Consumer Financial Account Data – The CPFB published an Advanced Notice of Proposed Rulemaking concerning the Section 1033 Dodd-Frank Act requirement which addresses the availability of consumer financial account data in electronic forms.

Property Assessed Clean Energy (PACE) Financing – Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 requires the CFPB to issue regulations relating to PACE financing. Unlike traditional financing, PACE loans are secured by real property and are paid through special property tax assessments.

Standards for Automated Valuation Models (AVMs) – The CFPB and other federal financial institution regulators are working to implement the Dodd-Frank Act requirement concerning automated valuation models (AVMs). The amendments require rules for quality control standards for AVMs. These quality control standards are designed to ensure a high level of confidence in the estimates produced by the valuation models, protect against the manipulation of data, seek to avoid conflicts of interest, require random sample testing and reviews, and account for any other such factor that the Agencies determine to be appropriate.

Facilitating Transition Away from LIBOR Index – The CFPB has finalized a rule to address the expiration of the LIBOR Index. The rule is designed to assist lenders with credit products ties to the LIBOR index with the Regulation Z requirements as the index is set to expire in 2023.


The National Credit Union Administration (NCUA) has twenty-one items listed on its rulemaking agenda. Some of the ones that stand out include:

Digital Assets and Related Technologies – The NCUA recently issued a Notice of Proposed Rulemaking to gather information on a wide range of issues pertaining to decentralized fiancé and cryptocurrencies as they relate to the credit union industry. The NCUA will review the comments and determine if any proposals should be forthcoming.

Flood Insurance FAQs – The NCUA has two items listed regarding the interagency flood insurance frequently asked questions (FAQs). One focuses on questions and answers related to the acceptance of private flood insurance. The other updates the existing questions and answers based on questions that have been asked of the regulators.

Overdraft Policy – The NCUA issued a proposed rule which would remove the requirement for federal credit unions to include in their overdraft policies that a member must either deposit funds or obtain an approved loan from the FCU within 45 calendar days of their account becoming overdrawn. Otherwise, the account must be charged off after that time period.

Bank Secrecy Act – The NCUA Board issued a proposed rule that modified the requirements for federally insured credit unions to file Suspicious Activity Reports (SARs). The proposed rule would allow the NCUA Board to issue exemptions from the requirements of that regulation in order to grant relief to FICUs that develop innovative solutions to meet the requirements of the Bank Secrecy Act (BSA).

Purchase, Sale, and Pledge of Loans – The NCUA Board is considering issuing a proposed rule to clarify federal credit unions’ authority to purchase, sell, and pledge loans (including loan participations and eligible obligations).


Requirements for CVC – FinCEN is planning on issuing a final rule which would require the reporting of transactions in convertible virtual currencies (CVCs) or digital assets held in un-hosted wallets.

Question of the Week

Q. What does the credit union need to know about mailing 1099-INT Forms to our members?

A. If a member qualifies for a 1099-INT, the credit union must use the official IRS Form 1099-INT or an acceptable substitute. Additionally, the statement may also contain the following information:

  • Form W-2, W-8, W-9, or other Forms 1098, 1099, and 5498 statements;
  • A check from the account being reported;
  • A letter explaining why no check is enclosed;
  • A statement of the person’s account that is shown on the 1099-INT; and
  • A letter explaining the tax consequences of the information shown on the statement.

No additional enclosures, such as advertising, promotional material, or a quarterly or annual report, are permitted. Even a sentence or two on the year-end statement describing new services offered by the payer is not permitted. Logos are permitted on the envelope and any nontax enclosures.

A recipient statement may be perforated to a check or a statement of the recipient’s specific account. The check or account statement to which the recipient statement is perforated must contain, in bold and conspicuous type, the legend “Important Tax Return Document Attached.”

The legend “Important Tax Return Document Enclosed” must appear in a bold and conspicuous manner on the outside of the envelope and on each letter explaining why no check is enclosed, or on each check or account statement that is not perforated to the recipient statement. The legend is not required on any tax form, tax statement, or permitted letter of tax consequences included in a statement mailing. Further, you need not pluralize the word “document” in the legend simply because more than one recipient statement is enclosed.

Related Link

IRS General Instructions for Certain Information Returns

Compliance Alerts

National Credit Union Administration

Automated Cybersecurity Evaluation Toolbox

The NCUA released Letter to Credit Unions 21-CU-15 which provides credit unions with information regarding the NCUA’s Automated Cybersecurity Evaluation Toolbox (Toolbox). The Toolbox is a no-cost, downloadable application developed to be a holistic cybersecurity resource for credit unions. It also provides credit unions with a no-cost method to conduct cybersecurity self-assessments. The Toolbox assists institutions of all sizes and complexity to determine and measure their information and cybersecurity preparedness against several industry standards and best practices. Using the maturity assessment within the Toolbox may assist credit unions in enhancing their cybersecurity oversight and management.

Relationships with Third Parties that Provide Services Related to Digital Assets

The NCUA released Letter to Credit Unions 21-CU-16 which provides clarity about the already existing authority for federally insured credit unions (FICUs) to establish relationships with third-party providers that offer digital asset services to the FICU’s members, provided certain conditions are met.

NCUA Board Approves COVID-19 Regulatory Relief Extension

The NCUA Board approved an extension of the end date of its temporary final rule which raised the maximum aggregate amount of loan participations that a federally insured credit union may purchase from a single originating lender to the greater of $5,000,000 or 200 percent of the credit union’s net worth. The temporary modifications will remain effective until Dec. 31, 2022.

NCUA Releases Q3 2021 State-Level Data Report

The NCUA released state-level data for the third quarter of 2021. Federally insured credit unions continued to see elevated asset and share-and-deposit growth over the time period.

Mortgage Servicing Assets Final Rule Amends the NCUA’s Investment Regulation

The NCUA Board approved a final rule that amends the NCUA’s investment regulation to permit federal credit unions to purchase mortgage servicing assets from other federally insured credit unions subject to specific requirements.

Final Rule on Subordinated Debt Will Aid Credit Unions that Participate in ECIP Program

The NCUA Board approved a final rule that amends the definition of “Grandfathered Secondary Capital” to include any secondary capital issued to the United States government or one of its subdivisions under a secondary capital application approved before Jan. 1, 2022, irrespective of the date of issuance. This amendment will benefit eligible low-income credit unions that are either participating in the U.S. Department of the Treasury’s Emergency Capital Investment Program or other programs administered by the U.S. government that can be used to fund secondary capital, if they do not receive the funds for such programs by Dec. 31, 2021.

Board Approves Complex Credit Union Leverage Ratio Final Rule

The NCUA Board approved a final rule that simplifies the risk-based capital requirements for eligible complex credit unions. Under the final rule, a complex credit union that maintains a minimum net worth ratio that meets other qualifying criteria is eligible to opt into the complex credit union leverage ratio (CCULR) framework if they have a minimum net worth ratio of nine percent.

2022 Threshold Adjustments Under Regulations Z, M, and V

The NCUA issued Risk Alert 21-RA-11 to inform credit unions of the annual exemption threshold adjustments under Regulations Z, M, and V. These adjustments are to the exemption threshold for higher-priced mortgage loan appraisals, consumer credit, and consumer lease exemption thresholds, and credit report fee ceiling.

Voluntary Credit Union Diversity Self-Assessment

The NCUA issued Letter to Credit Unions 21-CU-17 to remind credit unions of the NCUA’s voluntary Credit Union Diversity Self-Assessment. This tool is designed to help credit unions evaluate diversity policies and practices.

Consumer Financial Protection Bureau

Fall 2021 Rulemaking Agenda

The CFPB and other federal regulators released the Fall 2021 update to their rulemaking agendas. Some of the items included in the CFPB’s fall agenda are the small business lending data collection rule, availability of electronic consumer financial account data, PACE financing, standards for automated valuation models, and facilitating the transition away from the LIBOR index.

CFPB Issues Joint Letter to Mortgage Servicers on Servicemembers’ and Veterans’ Rights

The CFPB issued two joint letters regarding the legal housing protections for military families.

Seven Examples of Unfair Practices and Other Violations by Mortgage Servicers: CFPB Supervision Activities Uncover Red Flags

The CFPB issued a blog post that highlights mortgage servicing violations discovered during 2021 supervision efforts.

CFPB Updates Electronic Fund Transfer FAQs

The CFPB updated the Regulation E Frequently Asked Questions (FAQs) to address questions received by the CFPB.

CFPB Updates Asset Threshold for HMPL Escrow Exemption

The CFPB issued the annual threshold adjustment for the exemption to the mandatory escrow requirement for Higher-Priced Mortgage Loans.

CPFB Updates MHDA Asset-Size Exemption Threshold

The CFPB issued the annual asset-size threshold adjustment for the HMDA exemption.

Office of Foreign Assets Control

OFAC has updated the SDN list as of Dec. 30, 2021. The last update prior to this was Dec.10, 2021.

­­­­­­­­­­­­­­­­Questions? Contact the Compliance Hotline: 1.800.546.4465;

Posted in Article Post.