Regulatory Issues Closed for Comment

Compliance

Credit Union Solutions
Wisconsin Credit Union Foundation

Regulatory Advocacy at Work

The League routinely monitors upcoming regulatory issues and submits comment letters on behalf of Wisconsin credit unions. The League has submitted comment letters on the following issues, which were informed by you, our members. Thank you for your participation in this important advocacy work as we make strides to reducing credit union's regulatory burden.

Where possible, we've included links and information regarding the current status of each issue. For more information on any of these issue, please contact our compliance department.

Upcoming regulatory issues >>


CFPB: Qualified Mortgage Definition under the Truth in Lending Act (Reg. Z)

The League's comments

We wrote to the CFPB on Sept. 16, 2019, asking them to do all they can to retain the so called “GSE Patch” under the Ability-to-Repay / Qualified Mortgage lending rules. (Our Legal Affairs team explained what that means, and why it’s important for credit union in this Aug. 1 Comment Call.) We also asked them to eliminate the overly complicated debt-to-income calculation standards in the rules.

Final rule issued

No

 


FASB: Proposed CECL Delay Until 2023

The League's comments

On Sept. 16, 2019, we wrote to the Financial Accounting Standards Board, supporting its proposal to delay the effective dates for several proposed accounting standards updates. The changes would push back the deadline for implementing CECL (current expected credit loss standards) for credit unions (and many other organizations) to 2023. Though we favor a delay, we were clear that we still oppose applying CECL to credit unions. 

Final rule issued

No

 


NCUA: Delay of Effective Date of the Risk-Based Capital Rules

The League's comments

On July 25, 2019, The League wrote to the NCUA, voicing our support for a proposal to delay the effective date of the NCUA’s Risk-Based Capital (RBC) Rule from Jan. 1, 2020, to Jan. 1, 2022. We believe that the delay would benefit both the NCUA and covered credit unions.

Final rule issued

No

 


NCUA: Compensation in Connection with Loans & Lines of Credit to Members

The League's comments

We wrote to the NCUA on June 24, 2019, urging them to clarify rules that generally bar credit unions from paying officials or employees “any commission, fee, or other compensation in connection with any loan made by the credit union.” Among several exceptions, the rules allow bonuses based on the credit union's overall financial performance. We shared one state credit union’s frustrating experience with examiners questioning a long-standing bonus system that includes loans among the weighted factors in a performance scorecard. We urged the NCUA 1) to provide guidance on what its rules allow and 2) to give as much flexibility as possible for senior management compensation plans that incorporate lending as part of a broad and balanced set of organizational goals and performance measures.

Final rule issued

No



The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.
The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.

FCC: Ruling on "Robocalls"

The League's comments

On May 29, 2019, the League wrote to the Federal Communications Commission (FCC) last week, to express our concerns about a proposed FCC Declaratory Ruling. If approved, it would let phone companies block unwanted calls to their customers by default if they suspect they’re unwanted “robocalls.” In addition, companies could let consumers block calls not on their own contact lists. We warned that this broad ruling could have unintended consequences, stopping members from getting necessary and time-critical communications from credit unions, like fraud alerts, overdrawn account warnings, data breach notices, or messages about pending loans.

Final rule issued

Yes



The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.
The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.

CFPB: HDMA Coverage Thresholds and Partial Exemptions 

The League's comments

On June 11, 2019, The League wrote to the CFPB, urging it not just to adopt proposed amendments to the HMDA regulations, but to go even further: “Don’t just extend the temporary 500-loan threshold for collecting and reporting HMDA data on open-end mortgages to 2022; make that threshold permanent and withdraw any plans to decrease it to 200. Don’t just increase the threshold for collecting and reporting HMDA data on close-end mortgage loans to 100, increase it to 250 or better yet 500. Such changes would go far in easing the enormous burden that HMDA and Reg. C impose on small lenders, like credit unions, but they would have relatively minor impacts on the number of loans being reported under HMDA.”

Final rule issued

No



The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.
The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.

NCUA: Changes to Supervisory Committee Audit Rules

The League's comments

The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.

Final rule issued

Yes



The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.
The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.

CFPB: Payday Lending Rule Amendments

The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.
The League commented April 24, 2019 on an NCUA proposal to update its supervisory committee audit rules for federally insured credit unions. One key change would replace the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures. We back the idea of scrapping that outdated, burdensome 350-page guide, but we expressed our reservations over a suggestion that the minimum procedures would have auditors review the compensation of staff and board members as well as regulatory compliance.CFPB: Payday lending rule amendments

League’s comments
On May 15, 2019, The League wrote to the CFPB about their proposal to rescind some parts of the Payday Lending Rule. (We cover that rule in detail in ii Release No. B080.) We told them that it was unfair to lump pro-consumer credit unions in with unscrupulous payday lenders, and that they should exempt credit unions from the rule altogether. We urged the CFPB to focus instead on the bad actors that actually harm consumers. Failing that, we told the CFPB that it should move forward with its proposal to rescind the mandatory underwriting requirements from the rule.

Final rule issued

No


CFPB: Delayed effective date for part of payday lending rule

The League's comments

We wrote to the CFPB on March 18, 2019, to say that we do not object to delaying compliance for parts of the Payday Lending Rule, which takes effect Aug. 19. The CFPB is considering rescinding the rule’s mandatory underwriting provisions and its ability-to-repay standards, so delaying those sections for the time being makes sense. But we made it clear that our support for a limited delay should not be taken as support of any kind for the payday lending industry. We fully support the fight against unscrupulous payday lenders and vehicle title lenders, and we will oppose changes that would allow them to continue preying on the poorest of Americans. We believe that the rule in its current form unfairly lumps in pro-consumer credit unions with predatory storefront payday and vehicle title lenders. We will continue to urge the CFPB to narrow the Payday Lending Rule’s scope to the bad actors that actually harm consumers and to exempt credit unions.

Final rule issued

Yes


FHFA: Amendments to Home Loan Bank Housing Goals

The League’s Comments

On Jan. 29, 2019, The League filed a comment letter on behalf of all our credit unions, supporting a proposal by the Federal Housing Finance Agency to amend the existing Federal Home Loan Bank Housing Goals regulation. We joined the FHL Bank of Chicago in backing the proposal, which would replace existing goals for FHL Banks with new, streamlined goals that reflect the Banks' unique mission while supporting affordable lending. The proposed rule would provide certainty for the Banks by informing them of the housing goal levels in advance and would provide clarity and flexibility for the Banks by consolidating multiple goals into a more straightforward measurement of performance. The proposed rule would also establish a new housing goal that would measure the extent to which smaller members are participating in Acquired Member Assets (AMA) programs, under which the Banks provide financing for members' housing finance activities by purchasing mortgage loans.

Final rule issued

No


Federal Reserve: Actions to Support Interbank Settlement of Faster Payments

The League’s Comments

On Dec. 12, 2018, The League commented on actions that the Federal Reserve is considering to promote ubiquitous, safe and efficient faster payments in the U.S. The Federal Reserve is weighing its options to develop a service for real-time interbank settlement of faster payments, and to support that service, developing a liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis. The League voiced its full support for both actions and urged the Federal Reserve to proceed with all due speed. Such a service would benefit all Americans, and particularly those of modest means. It would also benefit the financial services industry and credit unions in particular, by offering a service to that the Federal Reserve is uniquely qualified to provide and that all financial institutions (regardless of size) should be able to access.

Fed announcement

Federal Reserve Banks have announced that they will build and operate their own system for nearly instant payments, called the FedNow Service, which will be available in 2023 or 2024.


NCUA: Real estate appraisals

The League’s comments

The League wrote to the NCUA on Dec. 3, 2018, supporting a proposal to amend its rules on real estate appraisals. In particular, we pointed out that we favor the idea of increasing the threshold – from $250,000 to $1 million – at which non-residential real estate-related loans would be exempt from appraisal requirements. (Below that level, the proposal rules would let credit unions use their judgment, consistent with safe and sound lending practices, to determine whether to use an appraisal or a written estimate of market value.) We also generally support revisions that would clarify and streamline the appraisal rules. However, we urged the NCUA not to change its rules on exempting appraisal for loans that involve existing extensions of credit.

Final rule issued:

Yes


FCC: Definition of "autodialer"

The League’s comments

The League submitted a comment letter to the Federal Communications Commission (FCC) on Oct. 16, 2018, asking them to adopt a modern and sensible definition of what an “autodialer” is under the Telephone Consumer Protection Act (TCPA). (With some exceptions, the TCPA bars calls and texts to cell phones using an autodialer – unless the caller has explicit consent.) Under the FCC’s vague rules, any modern business telephone system is almost certainly an autodialer. Federal appeals courts have issued conflicting opinions on whether the FCC is right, further confusing the issue. We pointed out that credit unions feel reluctant to contact members, fearing they’ll be accused of a TCPA violation in a frivolous class-action lawsuit. Limiting the definition to true “robocalls,” as Congress intended, would be a big step toward resolving the problem, we wrote.

Final rule issued:

No.


NCUA: Proposal to update mortgage rules for FCUs

The League’s comments

On October 2, The League filed a comment letter on an NCUA proposal to update certain lending rules. Most of the changes were technical, but we urged the NCUA to change its maturity limits for mortgage loans. Under the NCUA’s current rules for FCUs, certain mortgage loans can have terms up to 40 years, but other types of mortgage loans are kept to 20-year maturity limits. We told the NCUA that FCUs face a competitive disadvantage against other mortgage lenders who aren’t saddled with similar restrictions.

Final rule issued:

Yes.


NCUA: Proposal to delay RBC rule effective date

The League’s comments

The League wrote to the NCUA on Aug. 31, 2018, to offer our feedback on a proposal to amend their risk-based capital rules. The NCUA wants to raise the asset size threshold for complex credit unions from $100 million to $500 million and delay the effective date until Jan. 1, 2020. We support both ideas, but we think that the NCUA should go further. We asked them 1) to refine the definition of “complex” to help ensure that large credit unions would be considered “complex” only if they actually offer a substantial amount of complex products and services (and thus pose extraordinary risks); and 2) to extend the effective date for at least two more years – until Jan. 1, 2021 or beyond. 

Final rule issued:

The final rule delays implementation of the risk-based capital rule by one year, to Jan. 1, 2020, providing credit unions additional time to comply, and most notably, raising the threshold for risk-based capital compliance to $500 million in assets, exempting 90% of credit unions from the rule. 

Final rule issued:

Yes


NCUA: Payday alternative loans

The League's Comments

On Aug. 1, The League commented on the NCUA’s proposal to give FCUs an additional option to offer payday alternative loans (PALs). We stressed the toll that predatory lenders take on consumers, but we told the NCUA that its PAL rules “while steps in the right direction, are too rigid. Their restrictions actually discourage FCUs from launching such programs. If NCUA’s regulations were more flexible and realistic, FCUs would be incentivized to develop payday-alternative programs and better meet consumers’ needs. In particular, we believe that the PALs II proposal’s caps on interest rates, loan limits, and application fees are impractically low.”

Final rule issued:

No.


CFPB: Adopted Regulations and New Rulemaking Authorities

The League’s Comments

On June 18, 2018, The League wrote to the CFPB, in response to a “request for information” about whether it should amend some of the rules it’s adopted. We stressed the savings Wisconsin credit unions deliver to consumers, despite the staggering impact imposed by federal financial regulations. According to a CUNA study, regulatory burdens cost Wisconsin credit unions $167 million each year, which is $1,216,505 per credit union or $116 per member. We urged the CFPB to exempt credit unions and less complex financial institutions from its regulations. Instead, they should focus their rule-making on irresponsible financial institutions, predatory lenders, and those that put the nation’s financial stability at risk.

Final rule issued:

No

 


FHFA: Affordable Housing Program changes

The League’s Comments

On June 11, 2018, The League commented on a Federal Housing Finance Agency (FHFA) proposal to modernize its Affordable Housing Program (AHP) rules. Currently, 48 Wisconsin credit unions are members of the Federal Home Loan Bank (FHLB) of Chicago, which has provided more than $212 million via the AHP to help more than 38,000 low and moderate income individuals and families in Wisconsin obtain, develop, rehabilitate or preserve safe, decent and affordable housing. We urged the FHFA to keep the program’s current structure, which gives the FHLB of Chicago flexibility to tailor its AHP project awards to specific needs in Wisconsin. The proposal would replace it with a “top down” framework for awarding AHP funds, to meet targeted outcomes and preferences for certain project types, as determined in Washington, D.C.

Final rule issued

No


NCUA: FCU bylaws revisions

The League's Comments

On May 15, The League commented on the NCUA’s plans to update its standard bylaws for FCUs. We cited several recent changes that Wisconsin has made to its model bylaws for state-chartered credit unions, suggesting that similar changes at the federal level would 1) give FCUs boards and members greater latitude to amend their bylaws; 2) accommodate FCU boards that wish to meet via teleconference or other means; and 3) allow FCU directors to provide written consent for board actions in lieu of meeting. We also suggested that the NCUA explore modernizing its standard bylaws to let FCU members attend annual meetings remotely – via video conference, teleconference, or other means – as a way to encourage member participation.

Final issued

No


NCUA: proposed modernization of its Call Report form

The League's Comments

On March 29, The League sent a letter to the NCUA, commenting on the proposed modernization of its Call Report form. We sought input from a number of Wisconsin credit union professionals who regularly complete Call Reports, and the letter summarizes their replies and The League’s observations. We want to thank those who generously took the time to review the NCUA’s prototype form and offer feedback: David Murphy of Marshfield Medical Center Credit Union; Karen Piehl of Ripco Credit Union; Sara Steichen of Oshkosh Truck Credit Union; John Rudie of Westby Co-op Credit Union; and Ashley Vandermeuse of UnitedOne Credit Union.

Final rule issued

No


OCU: proposed updated to the state business lending rule

The League's Comments

The League commented on on the Office of Credit Unions' proposal to update the state business lending rule, which would provide similar flexibilities available to federal charters and state charters in other states. 

The League also testified at a hearing on the proposal, supporting the change but asking the OCU to consider two important tweaks to the rule.

First, in sharp contrast to the federal rule, the proposal failed to include a limited exemption for credit unions with less than $250 million in assets. In addition to adding back the limited exemption, attendees urged the OCU to retain language found in the current rule to provide clear, needed guidance about the kinds of documentation the OCU will consider when a credit union requests a modification to its lending cap. In addition, credit unions filed more than 180 comment letters supporting the rule with those two modifications.

Following consideration of the issues raised at the hearing and in comment letters, the rule moves to the Governor's office and ultimately to the NCUA for their approval before it can become final.

Final rule issued

No


NCUA: Proposal to amend advertising rules

The League's Comments

The League commented in support of the proposed changes, which would roll back some 2011 amendments that made the NCUA’s ad rules tougher than the FDIC’s. If approved, the amendments would: 1) Only require the NCUA “advertising statement” for radio and TV longer than 30 seconds (as opposed to 15 seconds under current rules); 2) No longer force CUs to include an advertising statement on published statements of condition; and 3) Let CUs satisfy the rule simply by stating “Insured by NCUA” (though we suggested that “NCUA Insured” would be even more concise). We also urged the NCUA to issue guidance on how the rules apply when credit unions advertise on social media.

Final rule issued

Yes


NCUA: Proposed Regulatory Reform Plan

The League's Comments

The League submitted comments on the NCUA Board’s Regulatory Reform Agenda – an outline of improvements the NCUA is considering to amend or repeal outdated, ineffective, or excessively burdensome rules. We stressed that regulatory relief is a pressing need for credit unions and their members, and we addressed a number of reforms that would have the greatest impact for Wisconsin credit unions.

Also read about CUNA's letter >>

Final rule issued

No


NCUA: Closure of the Temporary Corporate Credit Union Stabilization Fund

The League's Comments

The League filed two comment letters with the NCUA, both related to the closure of the Temporary Corporate Credit Union Stabilization Fund. In our first letter, we urged the NCUA Board to close the fund in 2017 and merge it into the NCUSIF as soon as possible, so that credit unions can receive a return of excess equity in early 2018. We also told the Board that we favor keeping the NCUSIF’s Normal Operating Level at 1.30%. At most, we said, the Board might consider raising the NOL by 4 basis points to 1.34% – but only if it expressly makes such an increase temporary. In no event should it increase the NOL to 1.39%.

In our second letter, which addressed a separate but related proposal on share insurance fund equity distributions, we stressed that “Wisconsin credit unions paid steep corporate assessments in recent years, and they deserve to be repaid, as much as possible and as quickly as possible, so that they can use the funds to better serve their member-owners.” However, we think that the NCUA’s two proposed methods of distributing the equity disbursements seem overly complicated. Instead, we suggested that the Board consider simply making distributions based on the total corporate assessments each credit union paid.

Also read about CUNA's letter >>

Final rule issued

Yes.

The National Credit Union Administration (NCUA) Board voted in September 2017 to: 

  • Close the Temporary Corporate Credit Union Stabilization Fund by transferring its assets to the National Credit Union Share Insurance Fund (NCUSIF).Depending on the performance of the assets held by the NCUSIF, the NCUA estimates credit unions should receive a rebate or dividend in 2018 between $600-$800 million, and future dividends between $600 million to $1.1 billion from 2019 through 2021. There may be anywhere from $600 million to $1.1 billion of potential future distributions. Corporate capital holders may have between $1.1 billion and $1.9 billion returned to them in 2021 as well. 
  • Set a new operating level for the National Credit Union Share Insurance Fund. To account for the risk to the fund when it includes Stabilization Fund assets, the NCUA also increased the normal operating level of the National Credit Union Share Insurance Fund (NCUSIF) - an equity target - from 1.30 percent to 1.39 percent. This is higher than both The League and the Credit Union National Association (CUNA) recommended as part of the regulatory comment process. By law it cannot be lower than 1.2 percent or greater than 1.5 percent.

On Feb. 15, 2018, the NCUA Board approved a final rule to issue Share Insurance Fund equity distributions in the amount of $735.7 million for the year ending Dec. 31, 2017. Credit unions are expected to receive distributions in Q3 of this year. 


FCC: CUNA Petition on the Telephone Consumer Protection Act

The League's Comments

The League submitted a letter supporting a petition CUNA filed with the FCC, asking it to exempt credit unions from certain Telephone Consumer Protection Acts (TCPA) rules. The TCPA now requires credit unions to get “express consent” before directing informational calls or texts to members’ cell phones. The petition asks for an exemption if credit unions have an “established business relationship” with the member or if a call/text is free under the member’s wireless plan. TCPA compliance is so confusing that credit unions are often reluctant to contact members for fear of violating the rules and becoming the targets of class-action litigation, we told the FCC.

Read more about CUNA's petition >>
 

Final rule issued

No

 


NCUA: Overhead Transfer Rate (OTR) proposal

The League's Comments

We commented on a revised NCUA “Overhead Transfer Rate” (OTR) proposal. The NCUA has two primary budgeting tools: Operating fees, which are paid by FCUs; and the OTR. The OTR determines how much the NCUA requisitions from the NCUSIF, which is funded by both state-chartered CUs and FCUs. While the regulator’s revised plan is a big improvement over its 2016 proposal (which we opposed), The League suggested that it go back to splitting costs 50/50 between the OTR and operating fees. We think that solution would be fairest for both federal and state charters. Ongoing advocacy efforts with the agency is making continual inroads on this issue.

Also read about CUNA's letter >>

Final rule issued

Yes

 


NCUA: Proposed Change to Rules on Corporate Credit Unions

The League's Comments

The League offered support for proposed changes to the NCUA rules on corporate credit unions. These proposed changes are important for several reasons: they affect corporate credit union Tier 1 Capital calculations, recognize Retained Earnings acquired in a merger, and create a Retained Earnings Ratio benchmark.

Final rule issued

Yes

 


Office of Credit Unions: Economic Impact of Proposed Revisions to Member Business Lending Rules Affecting Wisconsin State-Chartered Credit Unions

The League's Comments

The League thanked the Office of Credit Unions for officially proposing revised member business loan rules for Wisconsin state-chartered credit unions, which would largely mirror the NCUA’s member business lending (MBL) rules for FCUs. At this time, the OCU only sought comments on the proposal’s economic impact. (We will comment later on the substance of the proposal.) As proposed, the state rules do not include a limited exemption for credit unions with less than $250 million in assets, which is found in the NCUA’s rules. We stressed that without this exemption, many Wisconsin state-chartered credit unions would be at a competitive disadvantage when compared with FCUs and with credit unions in most other states.

Final rule issued

No

 


U.S. Treasury: Request for information on streamlining regulations

The League's Comments

The League has commented on the U.S. Treasury's general review of its regulations. Our Letter urged Treasury Secretary Steven Mnuchin to stress the staggering burden federal financial rules have on Wisconsin credit unions and to highlight certain key recommendations for eliminating or streamlining them. 

Also read about CUNA's letter >>

Final rule issued

No

 


NCUA proposed merger rule

The League's Comments

The League submitted a comment letter to the NCUA, voicing our opposition to a proposal that would revise the procedures for a federal credit union to voluntarily merge with another credit union. We told the NCUA that if they proceed with the new rule, it should not apply to federally insured, state-chartered credit unions. We believe that the proposed rule would impede voluntary mergers with unnecessary and burdensome requirements and that it would leave a host of unanswered questions that could render it unworkable. We also pointed out the irony of adding new layers of regulation to the merger process, since the burden of complying with expanding federal regs is one of the key factors driving credit unions to merge in the first place.

Also read about CUNA's letter >>

Final rule issued

Yes

This rule, effective October 7, 2018, applies to all federally-insured credit unions (federal and state). Under the rule, merging credit unions must: 

  • Provide the notice of the merger vote to its members at least 45 days (and no more than 90) in advance of the vote. 
  • Disclose merger-related compensation increases above $10,000 or 15% of compensation, whichever is greater. This applies to the chief executive officer or manager (or person acting in similar capacity); each of the four most highly compensated employees other than the chief executive or manager, and any member of the board of directors or the supervisory committee. 

The rule also provides additional information about the contents of the merger package, format of the member notice, and provides forms (these forms are included as an appendix with the rule). It also offers those impacted by the merger a method to communicate and comment to NCUA about the proposed merger. 


CFPB Assessment of the Ability-to-Repay/Qualified Mortgage rule

The League's Comments

The League has commented on the Consumer Financial Protection Bureau's analysis of its Ability-to-Repay/Qualified Mortgage (ATR/QM) Rule. Our letter made a number of suggestions, such as exempting all loans held in portfolio by a credit union or other lenders and increasing the asset size limit for credit unions to make “small creditor” QM loans.

Final rule issued

No

 


Federal Reserve: proposed amendments to Reg. CC affecting electronic check alterations and forgeries

The League's Comments

The League's letter to the Federal Reserve backed their proposal to add a Reg. CC provision that deals with fraudulent substitute checks or electronic checks.

Also read CUNA's letter >>

Final rule issued

Yes

 


CFPB: increase in HELOC threshold for HMDA reporting

The League's Comments

The League has commented on the Consumer Financial Protection Bureau's proposal to temporarily increase the threshold for collecting and reporting data under the Home Mortgage Disclosure Act (HMDA) and Reg. CC. Our letter told them that we generally support a proposal to increase (temporarily) a HELOC reporting threshold that is slated to take effect in 2018 under HMDA and Reg. C. We told the CFPB to go further, though, either dropping mandatory HELOC reporting completely or raising the threshold even higher than was proposed.

Final rule issued

Yes

The League’s Aug. 24, 2017 Compliance Courier explains that The Consumer Financial Protection Bureau (CFPB) Home Mortgage Disclosure Act (HMDA) rules (known as Reg. C) require certain institutions to collect, report, and disclose information about their mortgage lending activity, helping federal authorities spot potentially discriminatory lending patterns. Reg. C was substantially revised and expanded in 2015, as summarized in this Compliance Courier. Those changes will take effect on Jan. 1, 2018, Jan. 1, 2019 and Jan. 1, 2020. The 2017 final rules revised some aspects of changes even further.The CFPB has published an executive summary to help explain the latest amendments. Most significantly, the CFPB is temporarily increasing the threshold for collecting and reporting data with respect to home equity lines of credit (HELOCs) from 100 to 500 for the 2018 and 2019 calendar years. Financial institutions originating fewer than 500 HELOCs - in either of the two preceding years will not be required to begin collecting such data until Jan. 1, 2020.


NCUA's proposal on alternative capital

The League's Comments

The League has commented on the NCUA’s alternative capital proposal. We urged the NCUA to proceed with rulemaking on this important issue, explaining that allowing credit unions to use supplemental capital would benefit credit unions, their members and the NCUSIF. We cautioned, however, that the rule must be drafted carefully. In particular, it must not, in any way, jeopardize credit unions’ tax exemption. We called for a flexible approach that gives credit unions the freedom to explore alternative capital approaches within a basic regulatory framework.

Final rule issued

No

 


CFPB proposal to amend Reg. B

The League's Comments

The League filed a comment letter supporting some proposed Reg. B amendments. The changes are largely technical, and they’re being made to avoid conflicts with new HMDA rules (Reg. C) that will change Jan. 1, 2018. We believe that the Reg. B changes are necessary and will not add unnecessary compliance burdens for credit unions; however, we asked the CFPB to clarify the methods credit unions may use to collect race and ethnicity information under Reg. B for certain home loan applications during the final months of 2017.

Final rule issued

Yes.

The CFPB issued a final rule to amend Reg. B (the Equal Credit Opportunity Act regulation) to facilitate compliance with Reg. C and HMDA, which changes substantially in 2018. The Reg. B amendment should help with the transition to the 2016 Uniform Residential Loan application (URLA).

  • Coverage: Credit unions affected by this ruling include credit unions extending mortgage loans to consumers to purchase or refinance an applicant's primary residence, credit unions that report under Reg. C/HMDA or who have reported in the last 5 years or may do so in the near future, and credit unions that use the model forms from Appendix B to Reg. B.
  • Collection Requirements: Under this rule, Reg. B creditors making mortgage loans subject to § 1002.13 are allowed to collect the applicant's information using either the aggregate ethnicity and race categories, or disaggregated ethnicity and race categories and subcategories, as set forth in appendix B to Reg. C (the Reg. C appendix), as amended by the 2015 and 2017 HMDA Final Rules.  Reg. B creditors that are not HMDA reporters are not required to change their compliance practices, but this rule would allow them to adopt voluntarily new practices for collecting applicant information, including practices that would allow CUs to transition to the newly updated 2016 URLA. For HMDA reporters that are subject to the collection requirements in 1002.13, this rule provides additional clarity that credit unions that comply with the applicant information collection requirements under Reg. C/HMDA will satisfy the similar requirements under Reg. B.  Hopefully by aligning the collection of applicant information in both Reg. B and Reg. C, this will ease some of the compliance burden
  • Forms: The rule amends the Reg. B appendix to provide two alternative forms to collect applicant ethnicity, race, and sex information. The use of these forms to comply with §1002.13, is optional and is effective Jan. 1, 2018. The final rule also removes an outdated version of the URLA, effective Jan. 1, 2022.


NCUA's second proposal to modernize its field of membership rules

The League's Comments

The League's comment letter to the NCUA to express its support for a second set of proposed amendments to the federal field-of-membership (FOM) rules. The proposal would further modernize FOM rules that the NCUA just recently finalized. "We back the NCUA's efforts to maximize public access to federal credit unions, and we appreciate that the agency is considering recommendations The League and other commenters made earlier this year," we wrote. We went on to recommend certain ways in which the proposal could be improved.

CUNA's comment letter >>

Detailed summary >>

Final rule issued

Yes

 


CFPB's rule on Payday, Vehicle Title and Certain High-Cost Installment Loans

The League's Comments

The League submitted its comment letter opposing the CFPB’s proposed payday lending rules. We fully back the CFPB’s fight against predatory lenders. (Did you know that Wisconsin payday loans charge 564% APR on average?) However, we were stunned that the proposal would cover consumer-friendly credit unions. We urged the Bureau to exempt credit unions altogether. If it won’t, we said, then at least it needs to rewrite and simplify this flawed proposal. Among our many recommendations, we told the CFPB that it should fully exempt loans that meet the NCUA’s standards for “Payday Alternative Loans,” drop its confusing new “all-in” APR definition, and not infringe on credit union setoff rights.

CUNA's comment letter >>

Final rule issued

Yes

League's rule analysis >>‚Äč

Advocacy win: CFPB's small dollar loan rule preserves CU help for members >>

 


Modernizing Data Collection for Regulatory Oversight of Credit Unions

The League's Comments

The League's letter to the NCUA suggested a host of ways the Call Report and Profile could be modernized and improved to reduce the burden on credit unions and give examiners better tools for credit union oversight. We included input from professionals at seven Wisconsin credit unions who graciously shared their insights and critiques. We pointed out specific areas of the Call Report that are challenging to complete, especially for small or non-complex credit unions, and offered recommendations for many improvements.

CUNA's comment letter >>

Full text >>

Final rule issued

No.

[updated 8.18.16]


Amendment to the Annual privacy Notice Requirement Under the Gramm-Leach-Bliley Act (Reg. P)

The League's Comments

On Aug. 4, The League commented in support of the CFPB’s proposed amendments to its privacy rules (Reg. P). The amendments would implement the December 2015 “FAST Act” legislative changes, providing an exception to the annual privacy notice requirement for credit unions and other financial institutions that meet certain requirements. We suggested two improvements: giving credit unions more than 60 days to send annual notices if they no longer qualify for the exception and making the change retroactive to the date President Obama signed the SAFE Act into law.

CUNA's comment letter >>

Detailed summary >>

Full text >>

Final rule issued

Yes


Incentive-Based Compensation Arrangement

The League's Comments

On July 20, The League wrote the NCUA to oppose the federal regulators’ joint proposed rules on incentive-based compensation arrangements for credit unions with more than $1 billion in assets. We generally support the proposal’s broad goals: reining in short-sighted incentive-based bonus programs that certain big banks and other bad actors paid their staffs and executives. However, we stressed that the rules are unnecessary for credit unions, which did not offer outlandish bonuses that incentivized high-risk lending and caused the housing crisis. We also emphasized that the proposed rules are far too vague to be enforceable and far too intrusive. We urged the NCUA not to participate in the joint rules and to issue guidance, instead, so that it could better explain its expectations for incentive-based pay.

CUNA's comment letter >>

Detailed summary >>

Full text >>

Final rule issued

No.

[updated 7.22.16]


Notice of Proposed Rulemaking for Parts 701 and 721, FCU Occupancy, Planning, and Disposal of Acquired and Abandoned Premises; Incidental Powers

The League's Comments

June 23, 216. The League filed a comment letter supporting an NCUA proposal to cut a rule that now says an FCU must plan for, and eventually achieve, full occupancy of property it acquires. Under the proposal, an FCU would only have to occupy and use 50% of the property within six years, and it would be free to sell or lease the excess space. We asked the NCUA to go even further by: eliminating the six-year requirement for partial occupancy or making it 10 years; clarifying how an FCU can partially occupy vacant land; and relaxing  limits on an FCU selling or leasing excess capacity in equipment and services, not just property.

Detailed summary >>

Full text >>

Final rule issued

Yes.

[updated 12.27.16]


Accounting Standards Update, Financial Instruments - Credit Losses

The League's Comments

March 21, 2016. The League submitted comments to the Financial Accounting Standards Board, expressing our opposition to their "current expected credit loss" (CECL) proposal. If adopted as proposed, the rule would significantly harm credit unions, their members, and the economy generally. We urged FASB to delay adoption of the proposal and make needed changes: dropping the day-one loss recognition requirement on credit union loans, and not requiring the use of loss estimation methods that deviate in any way from those that credit unions now use.

Full text of the rule >>

Final rule issued

Yes. As explained in the June 17, 2016 Compliance Courier. The new CECL standard uses an "expected loss" measurement for the recognition of credit losses. It replaces the various existing impairment models in U.S. generally accepted accounting principles, which typically use an "incurred loss" approach.  The change is designed to require timelier recording of credit losses on loans and other financial instruments. 

In response to criticisms by The League and others, FASB's new standard allows greater flexibility than first proposed. It does not require complex modeling, and it allows various estimation methods to be used. FASB says that it intends for each institution to apply the method that is appropriate for its portfolio, based on the knowledge of its business and processes.

[updated 7.12.16]


Operations in Rural Areas under the Truth in Lending Act (Regulation Z); Interim Final Rule

The League's Comments

April 25, 2016. We filed a comment letter applauding the CFPB for a Reg. Z change that will increase the number of credit unions taking advantage of the three special mortgage lending rules for "small creditors." However, we also urged the Bureau (as we have done repeatedly) to find other ways to reduce regulatory burden. We pointed out that "creeping compliance complexity" is pushing small credit unions over the edge, diverting a staggering $161.9 million a year from Wisconsin credit union services, and driving the pace of mergers. As a result, the CFPB's rules have had "the perverse effect of actually harming U.S. consumers, leaving them with fewer sources for responsible lending and encouraging them to seek credit from predatory lenders or the big banks that caused the financial crisis in the first place.

Detailed summary of interim final rule

This was an interim final rule and took effect March 31, 2016. The CFPB accepted public comments on it, and may revise the rule further when it issues a final rule.

As explained in the March 23, 2016 Compliance Courier, the CFPB’s interim final rule significantly simplified what it takes for a credit union to be a "small creditor." 

Among the tests for "small creditor" status, a credit union now only has to show that it originated at least one covered mortgage loan on a property located in a rural or underserved area in the prior calendar year. Previously, credit unions had to show that they originated at least 50% of their first-lien, dwelling secured loans in rural or underserved areas in the prior calendar year. 

Full text of the interim final rule >>

Final rule issued

Yes and no. The interim final rule took effect March 30, but the CFPB may revise it further when it issues a final rule.

[updated 7.12.16]


Request for Comment Regarding Overhead Transfer Rate Methodology & Operating Fee Schedule Methodology

The League's Comments

April 25, 2016. The League filed a comment letter on how the NCUA calculates the Overhead Transfer Rate (OTR). We told the NCUA that its two primary budgeting tools are skewed: the method used to decide how much it requisitions from the NCUSIF (which is funded by both state- and federally-chartered credit unions); and the method used to determine the operating fees federal credit unions pay. We believe that the NCUA is inflating the costs to the NCUSIF, thus:

  1. Shifting expenses to the insurance fund and negatively impacting federally insured, state-chartered credit unions; and
  2. Indirectly subsidizing federal credit unions at the expense of state charters.

We urged the NCUA to be fair, ideally charging the two sources 50-50. In addition, we pointed out that “the NCUA can keep its costs down... if it examines fewer state credit unions and instead works more closely with state regulators."

Detailed summary of OTR methodology >>

Detailed summary of operating fee methodology >>

Full text of OTR methodology >>

Full text of operating fee methodology >>

Final rule issued

No.

[updated 7.12.16]


NCUA's proposal for modernizing its chartering and field of membership (FOM) rules

The League's Comments

The League filed a comment letter to express support for the NCUA’s proposal to modernize its chartering and field of membership rules. While we back the NCUA’s efforts, we suggested that they go even further to maximize public access to FCUs and provide regulatory relief.

CUNA final rule summary >> 

Final rule issued

Yes.

[updated 12.13.16]