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 News
Check out this new video about all the bells and whistles in InfoSight!
Compliance Updates
This month, the Membership Expulsion and/or Service Limitation topic in the Accounts channel was updated based upon updates to the NCUA’s Federal Credit Union Bylaws.
Compliance News
IRS Issues Clarification on RMD Statements
The IRA required mandatory distribution (RMD) age has increased from 70 ½ to 72 for 2020. As a result of this change, IRA owners who will attain age 70½ in 2020 will not have a required beginning date of April 1, 2021. The new required beginning date for an IRA owner is April 1 of the calendar year following the calendar year in which the individual attains age 72.

Please note that this tax law change does not change the required beginning date for IRA owners who attained age 70½ prior to January 1, 2020. In order to reduce misunderstanding among IRA owners, credit unions are encouraged to remind IRA owners who attained age 70½ in 2019, and have not yet taken their 2019 RMDs, that they are still required to take those distributions by April 1, 2020.  

If you have already sent out your RMD statements for members who will turn 70 ½ in 2020, the IRS will allow some flexibility this year due to the short amount of time you had to adjust to the new requirements. The agency issued  Notice (2020-6)  this week clarifying that “if a required mandatory distribution (RMD) statement is provided for 2020 to an IRA owner who will turn age 70½ in 2020, the IRS will not consider the statement to be incorrect, but only if the financial institution notifies the IRA owner no later than April 15, 2020, that no RMD is due for 2020.”

If an IRA owner has an RMD due for 2020, the credit union maintaining the IRA must file a 2019 Form 5498 (IRA Contribution Information) by June 1, 2020 and indicate by a check in Box 11 that an RMD is required for 2020. 

Source: IRS
Highlights from the January NCUA Board Meeting
Proposed Rule, Part 708a, Subpart D, Credit Union Combination Transactions : The proposal clarifies the processes and requirements related federally insured credit unions’ applications submitted to NCUA for these transactions.The proposed rule also addresses a FICU’s merger or consolidation with an entity other than a credit union. The comment period is open for 60 days after publication in the Federal Register.

Proposed Rule, Part 701, 702, 709, and 741 – Subordinated Debt : Condensed into an extensive presentation, the 277-page proposal would amend various parts of the NCUA’s regulations to permit low-income designated credit unions (LICUs), Complex Credit Unions, and New Credit Unions to issue Subordinated Debt for purposes of Regulatory Capital treatment. The comment period for the proposal once it is published in the Federal Register is 120 days.

Civil Monetary Penalty Statutory Inflation Adjustment : A chart of the new amounts can be found in the final rule was introduced. The new CMP amounts take effect once the rule is published in the Federal Register.


Source: NCUA
CFPB Policy Statement on ‘Compliance Aids’
The CFPB has published a policy statement announcing a new designation for certain Bureau guidance, known as "Compliance Aids," and to explain the legal status and role of guidance with that designation. The designation will be applicable beginning February 1, 2020.

Compliance aids will be similar to previous compliance resources from the Bureau, but will be designated as "Compliance Aids." Some current compliance resources may be so designated when they are updated or reissued. They are not to be considered "rules" under the Administrative Procedures Act. Instead, Compliance Aids present the requirements of existing rules and statutes in a manner that is useful for compliance professionals, other industry stakeholders, and the public. Compliance Aids may also include practical suggestions for how entities might choose to go about complying with those rules and statutes. But they may not address all situations. Where there are multiple methods of compliance that are permitted by the applicable rules and statutes, an entity can make its own business decision regarding which method to use, and this may include a method that is not specifically addressed in a Compliance Aid. Regulated entities are not required to comply with the Compliance Aids themselves. Regulated entities are only required to comply with the underlying rules and statutes.

When exercising its enforcement and supervisory discretion, the Bureau does not intend to sanction, or ask a court to sanction, entities that reasonably rely on Compliance Aids.

Source: CFPB
Articles of Interest
Advocacy Highlight
CUNA's Advocacy Resources:
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
There's more available from InfoSight
InfoSight content is available anytime to get sample policies, links to federal regulations and summaries of issues that are hot-topics at your credit union. 
 
Access to InfoSight is a benefit of League affiliation, so it is password-protected. If you don't have a password or if you have forgotten yours, click on the tan "Log In" button in upper right corner of the site; a box will open. Click on the blue wording to get your password.