NCUA & CFPB Update: What You Need to Know, Now NAFCU s Regulatory Affairs Team May 7, 2014: 2:00pm-3:30pm NAFCU
Webcast Presented by: Michael J. Coleman, Esq., NCCO Director of Regulatory Affairs Alicia Nealon, Esq. Regulatory Affairs Counsel PJ Hoffman, Esq. Regulatory Affairs Counsel
Agenda NCUA Risk Based Capital Stress Testing and Capital Planning Associational Common Bonds Voluntary Liquidations Exam Sites Upcoming Issues
Agenda continued CFPB Home Mortgage Disclosure Act (HMDA) Remittances Prepaid Cards Payday Loans Overdraft E-closings Amendments to Regulation Z Privacy
NCUA Risk-Based Capital January 23, 2014- NCUA issued a proposed rule regarding riskbased capital. This rule would apply to credit unions with over $50 million in total assets. The proposal would replace the current RBNW method with a new risk-based capital ratio method New risk-based capital ratio = % of a credit union s net worth available to cover losses, divided by the credit union s defined risk-weighted asset base Comments due to NCUA by May 28, 2014
NCUA Areas of Concerns Risk-Based Capital Risk Weights Implementation Timeframe Individual Minimum Capital Requirement
NCUA Resources Talking Points Risk-Based Capital Regulatory Alert 14-EA-03 NAFCU Compliance Blog Posts: Jan. 31, Feb. 21, Feb. 28, Mar. 14, Apr. 4 NAFCU s risk-based net-worth calculator NAFCU s Capital Reform Issue Page NCUA s Listening Sessions June 26 in Los Angeles, CA; July 10 in Chicago, IL; and July 17 in Alexandria, VA
NCUA Stress Testing and Capital Planning April 24, 2014 - NCUA approved final rule on stress testing and capital planning. Requires annual stress testing and submission of capital plans for credit unions with more than $10 billion in assets. Differences between proposed and final rule
NCUA Associational Common Bond April 24, 2014- NCUA propose to amend the associational common bond provisions of its Chartering and Field of Membership manual. Amendment seeks to: Establish a threshold requirement that an association not be formed primarily for the purpose of expanding credit union membership Expand the totality of the circumstances test by adding an eighth factor regarding corporate separateness Grant automatic qualification to certain categories of groups
NCUA Voluntary Liquidation February 20, 2014- NCUA proposed rule to clarify existing requirements and provide more flexibility in implementing voluntary liquidations. Proposal seeks to: Allow liquidating FCUs to publish creditor notice(s)in electronic media Increase the asset-size threshold for requiring multiple creditor notices Require that preliminary partial distributions to members not exceed the insured limit for any member share account Specify when liquidating FCUs must determine member share balances for the purposes of distributions Permit liquidating FCUs to distribute member share payouts either by wire or other electronic means or by mail or personal delivery
NCUA Exam Sites December 12, 2013- NCUA proposed a rule regarding regulatory requirements for contacts with FCUs Contact between NCUA staff and FCU required to occur in FCU s business office or other public locations. Requires FCU to maintain an email address, telephone number, or both, exclusively for credit unions business purposes.
NCUA McWatters Mark McWatters nominated by President Obama to succeed Michael Fryzel to serve in the Republican spot on NCUA Board. April 29, 2014- McWatters was approved by Senate Banking Committee. Next his nomination will be addressed in the Senate.
NCUA Member Business Lending A part of NAFCU s Dirty Dozen campaign. NAFCU has met with NCUA to discuss: Changes to waiver requirements and process, Expanding opportunities to obtain waivers, Removing five year requirement to obtain personal guarantee waiver, NCUA s use of its authority granted in Federal Credit Union Act to provide an exception to limitations on MBL cap. NAFCU expects the NCUA Board to review and potentially amend its MBL regulation in 2014.
NCUA Bylaws The Federal Credit Union Bylaws were last updated in 2007. NAFCU expects the NCUA Board to issue an updated version of the Federal Credit Union Bylaws in 2014.
NCUA Marijuana Accounts February 2014 - Financial Crimes Enforcement Network (FinCEN) released guidance for serving marijuana businesses. Credit unions are subject to same Bank Secrecy Act rules when handling monetary transactions for a marijuana business as they have to follow when dealing with any other business. NCUA has not weighed in yet, but NCUA staff have advised that the agency is working with other baking regulators to issue a joint (HA!) statement on marijuana accounts
NCUA Supervisory Focus January 2014 - NCUA released its Supervisory Focus Noted areas of risk: Interest Rate Risk, Cybersecurity Threats, Money Services Business and Private Student Lending Compliance Loan Participation Rule Credit Union Service Organization Rule CFPB s Ability to Repay Qualified Mortgage Standards Examiners have flexibility to Narrow or expand the scope of an exam
CFPB Home Mortgage Disclosure Act The Dodd-Frank Act transferred the Home Mortgage Disclosure Act (HMDA) to CFPB and asked the Bureau to expand the dataset and the collection of loan information. Dodd-Frank mandated changes vs. additional changes CFPB is seeking data about how increased reporting requirements will monetarily affect reporting entities.
CFPB Remittances April 15, 2014- the CFPB released proposed amendments to Regulation E s international transfer rule, which would: Extend an exception for international remittance transfers discloses Address the treatment of transfers from non consumer accounts Amend error resolution procedures and remedies. The CFPB seeks clarification and comments on treatment of U.S. military installations abroad.
CFPB Payday Loans 2013 the CFPB released a Payday Lending White Paper on the Bureau s comprehensive study on short term, small dollar loan markets. Recently, the CFPB held a field hearing and credit union roundtable. NAFCU expects a rulemaking in 2014.
CFPB Prepaid Cards The CFPB is seeking feedback on prepaid card disclosures The proposed rule will likely: Bring prepaid cards under Regulation E, Require static model disclosures to be made available on the outside package of packages The CFPB is currently testing model forms and will continue testing after the proposed rule is out.
CFPB Overdraft June 2013 CFPB released a Study of Overdraft Programs that looked at market and contextual factors in the offering of overdraft services since the 2010 implementation of a consumer opt-in requirement under Regulation E. The CFPB plans future studies of account-level data to better understand how differences in bank practices affect consumers. If the Bureau finds that current policies or practices do not protect consumers in accordance with federal consumer protection law, it will use its authorities to provide such protection.
CFPB E-Closings The CFPB s has planned an eclosings pilot program Credit unions that are interested in being a part of the eclosings pilot program should review the CFPB s eclosing Pilot Guidelines and the CFPB s solicitation announcement.
CFPB Amendments to the 2013 Mortgage Rules April 2014- the CFPB proposed amendments to certain mortgage rules issued in 2013 Ability to cure points and fees for qualified mortgages The CFPB is also requesting comment on: 1. A cure or correction of debt-to-income overages 2. The credit extension limit for the small creditor definition
CFPB Privacy May 6, 2014- the CFPB proposed amendments to Regulation P that would allow credit unions, under certain conditions, to post their annual privacy notices online rather than delivering them individually Requirements to qualify for online disclosure method
Questions?
Contact Information Michael Coleman, Esq., NCCO Alicia Nealon, Esq. PJ Hoffman, Esq. http://www.nafcu.org/contactus/#regulatory_affairs