CURRENT Newsletter | 14 January 2022 - Virginia Credit Union League

The Supreme Court on Thursday stopped the Biden administration’s vaccination-or-testing requirement on the nation’s largest employers, expressing doubt that there is legal authority for such a broad mandate.

The Court found OSHA does not have the broad power to enact such a mandate on private sector employers.

The ruling means that companies across the country must now decide between protecting employees, potentially losing staff members resistant to complying and running afoul of patchwork regulations.

The Supreme Court has repeatedly upheld state vaccine mandates in a variety of settings against constitutional challenges. The two cases decided on Thursday concerned a different question, that of whether Congress has authorized the executive branch to institute the requirements.

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Meanwhile, the issue of vaccines and mandates is playing out at the state level, as well, and your League is tracking and monitoring bills of interest.

A bill (HB27) has been introduced in the Virginia General Assembly this session that would prohibit the State Health Commissioner and the Board of Health, the Board of Behavioral Health and Developmental Services, the Department of Health Professions, and the Department of Social Services from requiring any person to undergo vaccination for COVID-19 and prohibits discrimination based on a person's COVID-19 vaccination status with regard to education or public employment and in numerous other contexts.

Another bill (HB22) would prohibit medical mandates by the Commonwealth and private employers. It remains to be seen whether any COVID-related bills will survive a divided legislature.

League, Credit Unions Push Secondary Capital, 'Parity Powers' Bills in General Assembly

We are pursuing two measures at the Virginia General Assembly this year.

Companion bills HB268 and SB326 will fix the Virginia statute so that the NCUA’s Subordinated Debt Rule will not be in conflict with the Virginia Code.

Companion bills HB209 and SB329 will make the process easier for state-chartered credit unions to exercise the same powers as federally chartered credit unions. Currently, state-chartered credit unions must seek permission to do this; we are asking that be changed to a notice requirement.

"In addition to our own legislation, we can also count on dozens of bills we'll need to track and monitor for their potential impact on credit unions, including legislation that impacts both state- and federally chartered credit unions," notes Carrie.

For those of you with national fields-of-membership, we are working with AACUL and other Leagues to flag any concerning issues at the state level.

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Updates on Advocacy Events

Planning for two of our key advocacy events remains fluid at present, as Congress and the General Assembly weigh various COVID safety measures.

Our Credit Union Day at the Virginia General Assembly (set for Jan. 27) will be scaled down to a small group of credit union participants, in light of COVID concerns. We will send out a separate invitation with an agenda and a RSVP for that event. In addition, we are planning several in-District legislative events throughout the year in each region of the state, so you’ll have opportunities this year to meet in-person with lawmakers (if COVID cooperates).

COVID is having an impact, as well, on planning for our popular Congressional Luncheon, held in conjunction with the CUNA’s Governmental Affairs Conference. Please keep an eye out for updates from us on the Luncheon and GAC. We are having to alter what we normally do relative to COVID restrictions. If you are attending GAC and would like us to set up a meeting with your member of Congress, please reach out to your League’s CeJae Vtipilson as soon as possible. We’re finding that the various Congressional offices have implemented different meeting protocols.

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Still Time to Register for ULEND Academy, A Game Changer for Lenders

ULEND Academy is a hands-on, customized experience that propels lenders from transactional to consultative, meeting members’ full financial needs. The curriculum guides lenders from foundational to advanced skill levels in all lending communication channels and across all stages of the loan process — origination, underwriting, and closing — with cross-selling, consultation, and compliance woven throughout.

ULEND will be offered Feb. 8-10. Seats are limited and are filling fast! Registration closes Jan. 21.

Your Safe Deposit Service: Top 50 Most-Important Operating Procedures

The safe deposit operation is a unique, fast-changing service in the financial industry. It is the only product or service in which your staff members do not know the value of a consumer's assets. As a result, every vault transaction can lead to considerable liability. Effective procedures and daily sound practices can counteract and minimize this risk.

Our Feb. 16 virtual seminar covers the "nuts and bolts" and the recommended day-to-day operating procedures for your institution.

In addition, you will receive information about many current safe deposit lawsuits and other nationwide horror stories.

League Board Seeks Nominees for Kirsch, Farley Awards

The League Board is seeking nominees for its annual awards recognizing individual achievement - the James P. Kirsch Lifetime Achievement Award and Eugene H. Farley Jr. Award of Excellence. The deadline for nominations is Feb. 15.

The Kirsch Award recognizes an individual who has made significant contributions to their credit union or the credit union industry during the course of their career.

The Farley Award recognizes an individual who has made a significant contribution over a period of the last three years. It may entail work on a specific project or initiative, enhancing your credit union’s culture, financial education, community involvement, or the individual can be recognized for exemplary leadership at the local, state or national level.

Credit union professionals and volunteers are eligible for both awards.

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Virginia League Joins System Partners in Calling for Relief from PCA Challenges

The Virginia League joined system partners in asking for additional PCA relief. The current interim final rule is scheduled to expire March 31.

Additional relief is needed for credit unions facing Prompt Corrective Action (PCA) challenges, CUNA, the American Association of Credit Union Leagues, and all Leagues wroteopens a pdf to NCUA leadership last Thursday.

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Compliance / Regulatory Affairs

NCUA Revises Call Report Beginning with the March 2022 Reporting Cycle

Following the NCUA Board’s approval of a final rule that simplifies the risk-based capital requirements for eligible, complex credit unions, and as part of its Call Report Modernization Initiative, the NCUA has modified the Call Report, Form 5300, beginning with the March 2022 reporting cycle.

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Jan. 24 Deadline to Submit Comments on NCUA’s Draft Strategic Plan

Comments on the draft of the National Credit Union Administration’s Strategic Plan are due on or before Jan. 24.

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CFPB Likely to Punt Data-Sharing Rule into 2023

The Consumer Financial Protection Bureau is more than a year away from releasing a long-awaited proposal on consumers’ right to control their own financial data, far later than many had expected, according to people familiar with the bureau’s thinking.

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What Card Issuers Can Learn from CFPB's Buy Now/Pay Later Inquiry

The Consumer Financial Protection Bureau’s recently announced inquiry into the operations of buy now/pay later fintechs raises many questions about how the rapidly growing industry’s policies affect overall consumer debt.

But the CFPB’s probe could also end up spotlighting the very reasons consumers have flocked to simpler BNPL loans over the last few years, putting pressure on credit card issuers to modernize their own products.

"Merchants like how BNPL loans influence the consumer's shopping behavior in the moment," said Brian Shniderman, U.S. CEO and global chief strategy officer at Opy, the U.S.-based subsidiary of BNPL fintech Openpay Group, founded in Australia in 2013.

To close that gap, many credit card issuers are moving instant credit offers directly to the point of sale and online checkout. Visa Installments, currently in pilot, aims to help banks accomplish this, along with Mastercard Installments, which is set to roll out this year.

In other developments, Discover teamed with Sezzle and Alliance Data Systems purchased Bread last year. Both payment companies plan to use those channels to significantly expand instant loans offered at the point of sale this year.

Amex last month announced a partnership with Opy that will add Amex as an instant financing option at the point of sale in the health care and automotive sectors. Stein said Opy is in discussions with "several major banks" looking to use Opy's application programming interfaces and other technology to bring instant financing options directly to merchants' checkouts.

“A big chunk of the U.S. population is happy with credit cards, and half of them revolve balances and the other half pay off their bills every month, but the fastest-growing group wants an option to finance purchases at the point of sale with BNPL loans, and credit card issuers are seeing that and responding to it,” Stein said. (American Banker, Jan. 11)

Education

2022 Inclusiv Annual Conference Scholarships: Apply Now

Registration is open for the 2022 Inclusiv Annual Conference and scholarships are available for member credit unions with assets of less than $25 million. Credit unions that meet these criteria are encouraged to apply.

Click Here to Apply

News From Credit Unions

Chartway’s We Promise Foundation Awards $670,000 in Charitable Grants

Thanks to its 5th Annual Putting for Promises Golf Tournament, 22nd Annual Charity Golf Classic, and other campaigns, Chartway Federal Credit Union and its We Promise Foundation will make $670,000 in charitable grants to non-profits in both its Virginia and Utah markets.

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Sara DePauw Hired as SVP Lending for Northwest Federal Credit Union

Northwest Federal Credit Union announces the hiring of Sara DePauw as Senior Vice President of Lending. DePauw replaces Erin Krause, who was promoted to Chief Member Experience Officer earlier this year.

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Financial Services / Economy

Wells Fargo Joins Other Big Banks in Cutting Overdraft Fee

Wells Fargo has joined Bank of America in becoming the latest to announce it will significantly reduce its overdraft fee. Like BofA, Wells Fargo said it will cut its OD fee to $10 from $35 beginning in May. It also plans to reduce the roughly $12 fees previously levied when customers used overdraft protection services.

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Mortgage Delinquency Rate Reaches Pre-Pandemic Levels

Mortgage delinquency rates hit pre-pandemic levels in October due to labor market improvements and home equity increases, according to the most recent CoreLogic Loan Performance Report. The expectation is that rates will continue to decline during 2022.

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