This Week in Regulatory Compliance: June 12-16, 2023

Happy Friday everyone! As schools are letting out and summer weather approaches, let's take a quick look at some highlights from the regulatory compliance world this past week.

NCUA

This week the NCUA released its Quarterly U.S. Map Review, showing state-level credit union data for the year ending 3/31/2023. Median asset growth and share growth declined slightly, while loans outstanding grew at the median. While aggregate industry data showed across the board growth in loans (17.6%), total assets (4.4%), and insured shares and deposits (2.3%), this report shows what things look like for the median credit union, both nationally and state-by-state.

Industry share growth is of particular note because the FDIC recently reported that US banks lost $472 billion in deposits during the first quarter - a 2.5% drop. However, while total bank deposits declined, insured bank deposits increased $255 billion, indicating deposit movement resulting from the mid-March bank failures. This will be an interesting trend to keep an eye on this year.

The NCUA Board also announced the agenda for their June 22, 2023, Board meeting. The Board will consider the following items:

• Request for Comment, Operating Fee Schedule Methodology
• Board Briefing, New Charter Modernization
• Proposed Interpretative Ruling and Policy Statement, Minority Depository Institution Preservation Program

NCUA Quarterly U.S. Map Review: quarterly-map-review-first-quarter-2023.pdf (ncua.gov)

CUNA: NCUA releases Q1 2023 state-level credit union data report | CUNA News

CFPB

CFPB Director Rohit Chopra was on Capitol Hill this week, testifying before both Chambers of Congress on their recent proposal to limit credit card late fees. The proposal was criticized by a number of lawmakers, who pointed out that card issuers would recoup revenue from other areas, making loans more expensive for many borrowers. Director Chopra also answered questions about what could happen if the Supreme Court upholds a Fifth Circuit Court of Appeals ruling that the Bureau's funding structure is unconstitutional. The Court's ruling could open many, if not all, of the CFPB's rulemakings and proposals into legal challenges. Virginia Senator Mark Warner noted the potential for "chaos" depending on where the Supreme Court comes down on the issue. The Supreme Court is expected to hear arguments on the case in October.

The Bureau also released a statement noting they will soon propose a rule on consumers' control of their banking data. In a blog post, the CFPB recognized the power that new digital banking technologies have in expanding banking access to more Americans. To help accelerate this shift to "open banking," new rules are needed on personal data rights to protect financial privacy. The CFPB will solicit comments later this year and will finalize a rule in 2024.

CFPB blog post on open banking: Laying the foundation for open banking in the United States | Consumer Financial Protection Bureau (consumerfinance.gov)

NAFCU: CFPB outlines perspective on open banking, 1033 rulemaking | NAFCU

Federal Reserve

This week the FOMC voted not to increase the Fed Funds rate, keeping them steady after 10 consecutive hikes. The move was largely expected by the markets after inflation data released on Tuesday came in cooler than expected. While the pause was anticipated, all eyes and ears were on the dot plot and Fed Chair Jerome Powell's press conference for hints of what to expect for July and beyond. In the press conference, Powell noted that while there was some discussion of the July meeting, the Committee's focus was on making the best decision for the June meeting. The CME Group's FedWatch Tool currently assigns a 74% chance of a 25 basis point rate hike in July, and a 26% chance of no rate hike.

Federal Reserve: Federal Reserve issues FOMC statement