One of the benefits of your credit union's League membership is access to InfoSight--a valuable online compliance resource. This newsletter contains some timely highlights, and access to InfoSight is a benefit of League affiliation, so it is password-protected. If you have a specific compliance issue or concern, contact our Consulting Department at (800) 285-5300. Replies to this email will be directed to SVP, League Services & Regulatory Analysis Joe Guilfoy .
InfoSight Highlight
InfoSight – Advertising
Did you see the recent changes to the advertising requirements for use of the official NCUA sign/slogan? If you didn’t, these changes became effective on May 25, 2018 and provide regulatory relief to federally insured credit unions, allowing an additional option for the official advertising statement. Credit unions advertising their accounts, now have the option of using “Insured by NCUA.”

In addition to that new alternative, there was also an amendment to the exemption on the use of the official statement for radio and television advertisements, which is now not necessary for those advertisements less than 30 seconds as opposed to the previous 15 seconds.

Additionally, there is no longer a requirement to have the NCUA logo or official statement on the first page of your annual report, or statements of condition required to be published by law.

Check out these changes and helpful FAQs on the  Advertising Channel today!
Compliance Videos
Compliance Outlook for Q1 and Q2 2018
In this vide o, Glory LeDu provides the overview of what’s ahead in the compliance world for 2018 . This covers annual threshold u pdates, HMDA changes, Payday Alternative Loans, Military Lending Act, ACH Same-day ACH processing and more!
 
Just a reminder that Compliance videos since 2016 can be found on YouTube at the Compliance Connection channel , where they are generally updated quarterly.
Compliance News
Major CU victory as Trump signs S. 2155
President Donald Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) into law, enacting a major piece of CUNA-supported bipartisan regulatory relief legislation. CUNA strongly supported the bill from the earliest negotiations in the Senate, and remained engaged with leagues and credit unions through House passage of the bill May. 22.

“President Trump’s signature on S. 2155 brings a successful end to one of the most comprehensive, historic advocacy efforts the credit union system has seen in quite some time. From the moment the text of the bill was released by a group of bipartisan Senators, credit unions made their voices heard wherever possible, resulting in significant regulatory relief for credit unions and 110 million Americans,” said CUNA President/CEO Jim Nussle. “This could not have been accomplished without fierce advocacy directly to members of Congress, in addition to social media posts, letters to the editor, the e-mails, the op-eds, all of which showed the majority of Congress that the time of one-size-fits-all regulations is over, and that American consumers need access to safe mortgages and other financial services products.”

S. 2155:
  • Establishes a safe harbor from certain requirements for a loan to be considered a Qualified Mortgage;
  • Rescinds the additional data points required under the Home Mortgage Disclosure Act for insured credit unions that originate fewer than 500 closed-end and/or 500 open-end lines of credit;
  • Reclassifies one-to-four unit, non-owner occupied residential loans as real estate loans, so the loan would not count against the member business lending cap;
  • Clarifies that the same consumer protections in place with respect to mortgage lending are nonexistent for Property Assessed Clean Energy loans;
  • Removes the three-day wait period required for the combined TRID mortgage disclosure if a creditor extends to a consumer a second offer of credit with a lower annual percentage rate;
  • Requires NCUA to make publicly available a draft of their proposed budget, hold a hearing with public notice during which this draft would be discussed and solicit and consider public comment about the draft budget;
  • Provides a safe harbor for properly trained financial employees who report alleged elder financial abuse; and
  • Requires the U.S. Department of Treasury to conduct a study on the risks that cyber threats may pose to financial institutions.


CUNA is already working toward the next phase of its Campaign for Common-Sense Regulation, outlining changes it would like to see at the Bureau of Consumer Financial Protection in a letter sent to House leadership shortly after S. 2155 passed.

Source: CUNA
NCUA wants to expand payday lending alternative for credit unions, consumers
ALEXANDRIA, Va. (May 24, 2018) – Federal credit union members could have more options for short-term, small-dollar borrowing under a rule proposed today by the National Credit Union Administration Board.

The proposed rule would create one new product in addition to the current payday loan alternative that has been available to federally chartered credit unions since 2010. The Board also is requesting credit union stakeholders to comment on a possible third option.

“The Board’s goal is to help people of modest means by expanding access to safe and affordable short-term, small-dollar loans,” NCUA Board Chairman J. Mark McWatters said. “Federal credit unions have had a payday alternative loan option since 2010, which has been extremely effective. Now, we want to create additional opportunities.”

“Providing affordable credit and helping members build financial security is the very foundation of the credit union system,” NCUA Board Member Rick Metsger said. “Federal credit unions have, for eight years now, been able to offer an alternative to the kind of predatory lending that can entrap a borrower with astronomical interest rates and fees. The NCUA Board wants to give federal credit unions more tools to help their members, and we will keep members’ needs as well as safety and soundness uppermost in our minds as we proceed.”

Noting the recent statement from the Office of the Comptroller of the Currency encouraging federally insured financial institutions to offer “responsible short-term, small-dollar installment loans,” Chairman McWatters stressed the need for a regulatory structure giving those institutions a way to provide a loan product that is both fair to consumers and viable for lenders without sacrificing safety and soundness.
The Consumer Financial Protection Bureau in 2016 granted the existing payday alternative loan product a full exemption—known as a “safe harbor”—from its payday lending rules. Chairman McWatters and Board Member Metsger plan to ask the CFPB to extend that safe harbor exemption to the proposed new loan option.

During the fourth quarter of 2017, 503 federal credit unions reported making payday alternative loans under the NCUA’s current rules. At the end of the fourth quarter of 2017, federal credit unions held $38.6 million in payday alternative loans on their books.

The new payday alternative loan the NCUA Board is proposing has features to help federal credit unions meet specific needs of certain payday loan borrowers that are not met by the current program and provide those borrowers with a safer, less expensive alternative to traditional payday loans.
The proposed loan option includes most of the features of current payday alternative loan program, with four changes:

  • Sets the maximum loan amount at $2,000 and eliminates the minimum loan amount.
  • Sets the maximum term of the loan at 12 months.
  • Does not require a minimum length of credit union membership.
  • Does not include time a restriction on the number of loans a federal credit union may make to the borrower in a six-month period, provided the borrower has only one outstanding loan at a time.

Seeking comment on a possible third option, NCUA Board members are requesting public opinions on areas that include interest rates, maximum loan amounts, loan terms, and application fees.

Source: NCUA
May meeting of the NCUA board
During the NCUSIF update there was discussion on the actual timing of the share insurance dividend that is expected in the 3rd quarter. Well, credit unions should anticipate the payment early in the third quarter, likely July but possibly August. Keep in mind the timing is subject to change but it looks like the dividend payment will paid sooner rather than later!  

Involuntary liquidations final rule was on the agenda and the Board adopted the proposed amendments without change. The rule is effective 30 days from publication in the Federal Register. Once effective, permissible severance claims in an involuntary liquidation will include vacation, sick, and severance pay if the payment is supported by an employee handbook or other type written credit union document and such payment is objectively applied (the same formula is applied for all employees). 

The last item on the agenda was a proposal on payday alternative loans. The proposal doesn’t make changes to NCUA’s current PALs program but instead creates an alternative option (PALs II) which would not be subject to the safe harbor in CFPBs payday loan rule. While not subject to the safe harbor, NCUA’s PALs II would likely qualify for alternative loans exemption in the CFPBs rule under particular conditions. NCUA's proposal also suggests the possibility of creating a third option (PALs III) which would incorporate different fee structures, loan features, maturities, and loan amounts. The comment period is open for 60 days.


Source: CUNA Compliance Blog
Advocacy Highlight
S. 2155 passed the House and signed into law
On May 22 the House voted to pass bipartisan regulatory relief legislation, S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act. Having passed the Senate in March, the bill was signed into law by President Trump on May 24!

The victory achieved by CUNA, leagues and credit unions with House passage of this important bipartisan regulatory relief legislation was made possible by months of 360-degree advocacy, as the credit union system engaged lawmakers on all levels to express the need for this important legislation. 
After the legislation passed the House, CUNA wrote the House Financial Services Committee Chairman and Ranking Member to highlight areas where credit unions need additional regulatory relief.

"We thank the Senate and the House for passing S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, and look forward to the President signing this bill into law very soon. Congress should be proud to have enacted this commonsense and targeted regulatory relief bill on a bipartisan basis. But, more needs to be done to ensure that consumers and small businesses that rely on credit unions and small banks to for access to credit can continue to receive those services safely and affordably." 

Source: CUNA
Keeping up with CUNA Advocacy
To stay abreast of the issues on which CUNA has provided input to lawmakers and regulators, here is a list of those topics.

The CUNA Advocacy Update is published at the beginning of every week and keeps you on top of the most important changes in Washington for credit unions--and what CUNA is doing to monitor, analyze, and influence government agencies and federal law. To receive this update, click on “Get CUNA Updates” on the CUNA Advocacy page. Additional Advocacy efforts may also be found under CUNA’s Removing Barriers blog. With the recent updates to CUNA’s website, Advocacy information has also changed. To view recent advocacy issues and see ways your credit union can become involved, visit the Priorities or Actions pages.

Source: CUNA
Weekly Regulatory Advocacy Report
The Weekly Advocacy Report provides links to information about a number of recent League, CUNA and NCUA regulatory and advocacy activities. 
   
Upcoming Education Sessions
The League has several education sessions coming up. Several focus on compliance issues. They are listed in calendar format on the League website.
   
League Consulting Department Staff
(800) 285-5300
Compliance Calendar
July
  • July 1, 2018: Regulation CC Amendments – Availability of Funds and Collection of Checks
  • July 4, 2018: Independence Day - Federal Holiday
  • July 29, 2018: 5300 Call Report Due to NCUA
September
  • September 3, 2018: Labor Day - Federal Holiday
October
  • October 8, 2018: Columbus Day - Federal Holiday
November
  • November 12, 2018: Veterans Day (observed) - Federal Holiday
There's more available from InfoSight
InfoSight content is available from the League's website . Visit anytime to get sample policies, links to federal regulations and summaries of issues that are hot-topics at your credit union. 
 
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