CURRENT Newsletter | 13 April 2021 - Virginia Credit Union League

A Virginia law pertaining to the exemption from creditors of federal “emergency relief payments” under the Covid-19 federal relief legislation (“CARES Act”) was amended by the Governor on March 31, 2021. The General Assembly approved those amendments last week (April 7).

This alert is to remind our member credit unions of certain requirements if your credit union receives notice, either from the payment itself or from the account holder, that certain funds in an account represent pandemic-related emergency relief payments from the federal government under legislation passed by the US Congress.

Learn more (League website password required. Register here if you need one.)

League Hosting Compliance Webinar April 28

Join us on April 28 for a free compliance/regulatory update with attorney Jay Spruill. The hour-long webinar (10 a.m. start time) will cover frequently asked questions on the League compliance hotline, key federal regulatory issues, and any recently enacted state laws that might affect your operations.

Also, feel free to send your questions prior to the webinar to your League’s Mary Amyx at mamyx@vacul.org. She’ll gladly forward them to Jay to ensure they are covered during the webinar.

Learn more and register here.

CUNA Mutual Group Webinar on Lending Risks Set for April 14

Lending is the backbone of credit unions. And, with increased competition and non-traditional lenders filling the marketplace, credit unions are having to embrace new lending strategies while minimizing risks.

Join us for a live question and answer session April 14, during which industry experts will focus their time on addressing top-of-mind lending risks. During this session, we’ll cover:

Latest loan scams and trends
Shift to digital and impact on lending
Consumer Skip-a-Pay Programs
Member authentication
Regulatory and compliance issues
Lending to marijuana-related businesses

Learn more

Online Training for Supervisory Committees

Popular credit union consultant Ancin Cooley has created a web-based course for supervisory committee members, offering the most comprehensive overview of the role, duties, responsibilities and resources available to committee members. The five modules offer you a fun, interactive learning experience with bonus content and even quizzes to test your content retention.

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Register Now (Your League is offering volume discounts for multiple registrations from the same credit union. Use our registration to ensure you receive the discount.)

Overview of Fiserv's Card Expert Solution: Free April 22 Webinar

Transform your data into actionable insights that drive fact-based, consumer-focused decisions.

League partner Fiserv will offer a free webinar April 22 that will assist you in understanding key portfolio metrics, cardholder behaviors and how their relation to your credit union's card strategy is paramount for success. Learn how Fiserv’s “Card Expert” solution can help enrich your card strategies and build member engagement.

Let’s Have an Uncomfortable Conversation: Diversity, Inclusion & Bias

Where are you in your diversity journey? Find out by joining us for The No-Nonsense Experience, starting Thursday, May 6.

Offered as a one-hour, weekly course May 6-27, The No-Nonsense Experience will be guided by a team of expert facilitators from JP Enterprises, and will focus on building conversation skills around your thoughts, intentions, actions and behaviors regarding Diversity, Inclusion and Bias.

Learn more / Register

LICUs Can Apply for NCUA Grants Beginning May 3

Low-income designated credit unions can begin applying for grants through NCUA's Community Development Revolving Loan Fund (CDRLF) May 3. The agency said it plans to distribute approximately $1.5 million in grants, according to the notice of funding opportunity.

Eligible credit unions can submit applications for grants through June 26 via the NCUA's CyberGrants portal in these categories: Digital Services and Cybersecurity; and MDI Mentoring; Underserved Outreach.

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Advocacy / Governmental Affairs

Huge (But Complex) Pot Banking Potential Awaits Clearer U.S. Signal

Will banks and credit unions deem the rewards outweigh the risks and burden of serving state-legal marijuana-related businesses?

Several hundred already do to varying degrees, but large, national entities including the major credit card companies don’t. The ongoing tension between the 44 states that legalize cannabis sales in one form or another and the federal blanket condemnation of pot as a “Schedule 1” narcotic (high potential for abuse) creates a full stop for the majority of banks and credit unions.

But the stakes are enormous and growing. As it is, financial institutions are dealing with the situation in vastly different ways. Most that offer cannabis-business services tend to underplay that fact to avoid possible reputational risk. Plenty of people still regard recreational pot use as unhealthy, immoral or both. While more than twice as many banks as credit unions are involved (515 versus 169 as of first quarter 2021), credit unions tend to be more open about it.

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Related: League Memo on Cannabis Law – Considerations for Virginia Credit Unions (NOTE: Produced in 2019, so sections dealing with Virginia law will change come July 1. The document might prove helpful in understanding the regulatory issues associated with serving the cannabis industry.
Related: Marijuana will be legal in Virginia on July 1, years earlier than planned
Related: Lawmakers OK recreational marijuana, cultivation

Compliance / Regulatory Affairs

CFPB Proposes Delayed Effective Date for Recent Debt Collection Rules

The Consumer Financial Protection Bureau (CFPB) last Wednesday proposed extending the effective date of two recent debt collection rules to January 29, 2022. This is 60 days after the currently scheduled effective date of Nov. 30, 2021.

According to the CFPB, the proposed delay would allow stakeholders affected by the pandemic additional time to review and implement the rules.

The first debt collection rule, issued in October 2020, focuses on the use of communications related to debt collection, and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.

The second debt collection rule, issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. The rule also prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.

The proposal will be open for comment for 30 days following publication in the Federal Register.

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FinCEN ANPR on Beneficial Owner Due Diligence Requirements

Feedback on implementation of new laws requiring certain business entities to submit their beneficial ownership information directly to the federal financial crimes enforcement agency is being sought by Treasury’s Financial Crimes Enforcement Network (FinCEN), the agency said last week. Comments are due by May 5.

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FIs Fear AML Relief May Be Slow to Materialize

As the Financial Crimes Enforcement Network seeks public comment on developing a registry to crack down on anonymous shell companies, FIs are anxiously awaiting relief from anti-money-laundering reporting burdens.

Fincen has begun the process of implementing a law enacted in January requiring companies at incorporation to report their beneficial owners to the agency, which will put the information into a new database. FIs applauded the bill since it will relieve them of current requirements to report their business customers' true owners to Fincen.

But the key question for the industry — following the release of the agency's advance notice of proposed rulemaking — is how quickly and to what extent will Fincen ease the customer due diligence rule now imposed on FIs. Until that happens, account holders could be reporting their true owners both to the government and to a financial institution. (American Banker, April 12)

PCA Flexibility Coming Soon from NCUA

CUNA and League advocacy efforts over the past 13 months have included a strong push with NCUA to ensure Prompt Corrective Action (PCA) flexibility and overall engagement with the agency to secure policies that support credit unions during the pandemic, CUNA Chief Advocacy Officer Ryan Donovan wrote in CUNA’s Removing Barriers Blog.

NCUA approved an interim final rule in May 2020 to both allow the board to temporarily waive the earnings retention requirement for adequately capitalized credit unions and allow certain credit unions to submit simplified net worth restoration plans. This rule expired Dec. 31.

CUNA and all 34 credit union Leagues wrote to NCUA Chairman Todd Harper last month to encourage renewal of the interim final rule, and the topic was discussed this week at a meeting between Harper and CUNA’s Small Credit Union Community.

“Thankfully, Chairman Harper recently indicated the agency will soon take action to reinstitute capital relief. In the next few weeks, we expect to learn more about what NCUA is willing and able to do to provide flexibility to credit unions,” Donovan wrote. “It’s not clear whether they will simply extend the previous temporary rule or whether they will expand that flexibility to include suggestions that CUNA and the leagues made in March.”

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Compliance Alert: American Rescue Plan Act of 2021

CUNA’s compliance team has put together a chart to summarize the major provisions that could affect credit unions and your members.

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News About Credit Unions

Economic Update Examines SIF Premium Possibilities

CUNA Chief Economist Mike Schenk examines the chances of NCUA issuing a National Credit Union Share Insurance Fund premium and other topics in this month’s Economic Update video. NCUA Chairman Todd Harper said at the agency’s February meeting that the agency may no longer be able to avoid charging a premium.

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News From Credit Unions

Baylands Family Credit Union Finds New Ways to Give Back

Baylands Family Credit Union is no stranger to giving back to communities and families near and far. This year the local not-for-profit is looking to make a positive impact on both international and local communities. In early 2021, staff and management met to determine causes staff were passionate about and ways the credit union could be an ally to various groups to partner on projects focused on community impact.

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Chapter News

Tidewater Chapter Charity Golf Tournament Tees Off June 4

The Tidewater Chapter will hold its 8th Annual Charity Golf Challenge on June 4 at Sewells Point Golf Course in Norfolk. ALL credit unions – regardless of location - are invited!

Format will be four-man captain’s choice. The cost will be $100 per player. Proceeds will benefit Children’s Hospital of the King’s Daughters, our local Children’s Miracle Network Hospital! Please join us for this exciting event, which has raised more than $100,000 for CHKD during the past seven years.

Learn more / Register

Pandemic Response

A Year into Pandemic, 15% of Americans Find Themselves in a Deepening Financial Hole, Poll Finds

While most Americans have weathered the pandemic financially, about 38 million say they are worse off now than before the crisis began in the U.S. a year ago.

Overall, 55% of Americans say their financial circumstances are about the same now as a year earlier, and 30% say their finances have improved, according to a new poll from Impact Genome and The Associated Press-NORC Center for Public Affairs Research. But 15% say they are worse off.

The problem is more pronounced at lower-income levels: 29% of Americans living below the federal poverty line say their personal finances worsened in the past year. Roughly that many also find themselves in a deepening financial hole, saying they struggled to pay bills in the past three months.

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Financial Services / Economy

Powell: Need for Digital Dollar is an Issue for Congress, Public

Federal Reserve Chair Jerome Powell said the central bank is involved in a large-scale research and development project on the digital dollar, and that questions of whether adopting such a currency would provide a public benefit have yet to be resolved.

“It’s a very, very large, complex project. And, you know, this is really just table stakes,” Powell said in an interview with “60 Minutes” on CBS. “This is understanding the technology and the possibilities so that you can really address the policy issues.”

Countries from China to Sweden are also testing digital currencies. Powell has said the U.S. doesn’t need to be first, and he’s also noted that any introduction of a new currency format would require congressional input. (American Banker, April 12)

Driving Members to Prime Credit Scores

Credit unions are finding more ways to make car loans for people with dings and dents in their credit scores. Some of the tools include trended data showing consumer payment behavior over 30 months, alternative data such as rent or utility payments, and credit-builder programs.

All of them require dedication to lending beyond the safety zone of A and A+ paper, and to building analytical muscles. Sometimes small loans for weak credit require a heavy lift to gauge the risk and price for it.

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