CURRENT Newsletter | 21 January 2021
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Headlines
- COVID-19 at Work: 2021 Legal Updates
- Three-Part Fundamentals of the Mortgage Process Webinar Series Offered in February
- VACUPAC Launches 2021 Pin Clubs
- Small Credit Unions: CUNA Mutual Group Providing 13 GAC Scholarships
- SBA Approved 60,000 PPP Loans Since Jan. 11
Pandemic Response
- Virginia Set to Implement ‘Permanent’ Standards for COVID-19 Workplace Safety
- Credit Union CEOs Share Key Takeaways from a Challenging 2020
- Will Biden’s Stimulus Package Help Reverse the ‘Shecession’?
Compliance / Regulatory Affairs
- Financial Regulators Finalize Statement on Role of Guidance
- NCUA Adjusts Supervisory Expectations Due to Coronavirus Crisis
- FinCEN Extends Comment Period for Rule Aimed at Closing AML Regulatory Gaps
- Chopra Likely to Return Agency to Cordray-Era Enforcement at CFPB
- NCUA Amends the Ability-to-Repay/Qualified Mortgage Rule
- CUs Would Benefit from USDA Single Family Loan Program Stability
- CFPB Finalizes HPML Escrow Exemptions
- CFPB Releases Small Entity Compliance Guide for Debt Collection Rule
- CFPB Publishes Guidance on Serving LEP Consumers
Marketplace / Economic News
- New Year, Little Change in CU Auto Lending Outlook
- Fed Governors Weigh In With Their Own Economic Updates, Views
News From Credit Unions
- Bellwood Credit Union Welcomes a New Addition to the HFCU Branch Family
- Richmond Heritage Federal Credit Union Names Chairman
Headlines
COVID-19 at Work: 2021 Legal Updates
The COVID-19 pandemic brought employers unique and difficult challenges last year and the end is still not in sight. What can you do when an employee refuses to be vaccinated? Is it even legal to ask for their “vaccination status?” How did the new Coronavirus Relief Bill change leave under the FFCRA? Should you offer paid leave voluntarily?
This Jan. 26 webinar on COVID-19 Legal Updates with attorneys from the Labor & Employment practice at Woods Rogers will answer these questions so you can protect the health and safety of your employees and protect yourself from legal risk.
The webinar begins at 10 a.m. Have a question for Dan and Leah? Send it in an email to mamyx@vacul.org.
Three-Part Fundamentals of the Mortgage Process Webinar Series Offered in February
A three-part webinar series, presented by CUNA Mutual Group partner MGIC, will provide credit union staff a better understanding of the mortgage cycle and process. Participants will learn how mortgage insurance works, the importance of a well-taken loan application, how to use the "Four Cs" in lending decisions, and the "whys" behind the "how-tos" of the mortgage process. A thorough understanding of the mortgage process will enhance your value to your members and help ensure an efficient, effective member service experience.
Fundamentals of the Mortgage Process Webinar Series schedule & content:
- Wednesday, Feb. 3, 2 p.m.- 3 p.m.: Understanding the Mortgage Cycle and How Mortgage Insurance Works - In the first of our 3-part Fundamentals series, learn about the mortgage cycle, key players, regulatory compliance, mortgage insurance and MI premium plan options.
- Wednesday, Feb. 10, 2 p.m.- 3 p.m.: Taking the Loan Application and Processing the Loan - In the second of our 3-part Fundamentals series, learn about loan types and programs, questions to ask while completing the loan application, the importance of processing and complete documentation.
- Wednesday, Feb. 17, 2 p.m.- 3 p.m.: Evaluating Credit, Capacity, Capital & Collateral - In the third of our 3-part Fundamentals series, learn about evaluating the Four Cs—credit, capacity, capital and collateral —along with risk layering.
Your educational investment is $150 per person for all three sessions. MGIC clients may attend at no charge. The webinar and registration is hosted by our TRGroup partner, the Mississippi Credit Union Association.
Get additional program details or register here!
VACUPAC Launches 2021 Pin Clubs
Your support of the Virginia Credit Union Political Action Committee (VACUPAC) plays a critical role in our advocacy work.
Contributions to VACUPAC enable us to have a greater impact with political candidates than we would if we simply contributed to candidates as individuals.
Small Credit Unions: CUNA Mutual Group Providing 13 GAC Scholarships
Thanks to CUNA Mutual Group, small credit unions have a chance to win one of 13 scholarships to CUNA’s Governmental Affairs Conference, which is being held virtually March 2-4.
Learn how to qualify for one of these scholarships.
SBA Approved 60,000 PPP Loans Since Jan. 11
The Small Business Administration said Tuesday afternoon that it has approved approximately 60,000 Paycheck Protection Program loan applications submitted by nearly 3,000 lenders, for over $5 billion since the program reopened on Jan. 11.
During its first week, the PPP provided dedicated access to community financial institutions that specialize in serving underserved communities, including minority- women-, and veteran-owned small businesses, from Monday through Thursday, joined Friday by smaller lenders.
As of Tuesday, the PPP is open to all participating lenders.
Pandemic Response
Virginia Set to Implement ‘Permanent’ Standards for COVID-19 Workplace Safety
Virginia is set to adopt workplace safety standards for COVID-19 prevention that will be in place at least until Gov. Ralph Northam’s state of emergency declaration is lifted.
Virginia’s Safety and Health Codes Board last week voted 9-4 to maintain a list of emergency workplace safety rules that were adopted last year as temporary, mandatory COVID-19 prevention measures. Virginia initially approved the regulations in July, becoming the first state in the nation to do so.
The board’s vote technically makes the rules permanent, but the requirements could be lifted after Northam declares an end to the state of emergency.
The permanent rules roughly match the temporary ones adopted last year with some changes. The regulations split workplaces into “low,” “medium,” “high” and “high-risk” depending on the likelihood of COVID exposures.
Among other rules, businesses must require employees who are in regular contact with the public to wear masks while providing hand sanitizer and also cleaning common areas in workplaces regularly. All but low-risk businesses must provide COVID-19 prevention training to employees and must notify employees when someone at a worksite tests positive.
The rules were being reviewed by the Northam administration this week and will be published before they go into effect.
Learn more
Related: State anticipates fewer COVID vaccine doses due to U.S. shortfall
Credit Union CEOs Share Key Takeaways from a Challenging 2020
The outset of the coronavirus (COVID-19) pandemic in 2020 provided unforeseen challenges for every credit union leader. Leadership lessons gleaned from webinars and audiobooks were put to the test under the pressure of a crisis, and new lessons were forged from failure and success.
In this podcast, two credit union CEOs share their pandemic experiences and how they’re moving forward in 2021.
Lynette Smith, president/CEO of $130 million asset TruEnergy Credit Union in Springfield, Va., shares how TruEnergy leveraged a largely remote workforce to serve 9,000 members during the pandemic with a blend of technology and appointment-only, face-to-face member service.
Max Villaronga, president/CEO of El Paso (Texas) Area Teachers Federal Credit Union, explains how the $740 million asset credit union serves 65,000 members largely through remote services in one of the states hardest hit by the pandemic.
Will Biden’s Stimulus Package Help Reverse the ‘Shecession’?
President-elect Joseph R. Biden Jr. on Thursday unveiled an economic stimulus package that has been praised — even by conservative-leaning businesses, lobbying groups and analysts — for its size and scope, matching the current economic crisis with a historically unique response.
“Not since the New Deal during the Great Depression have we seen such an ambitious economic stimulus plan,” said C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research. “What that signals to me is that the new administration understands the magnitude of the problem.”
From the get-go, this economic crisis has been markedly different from previous ones: It wasn’t caused by geopolitical or financial forces, and it disproportionately affected women.
Compliance / Regulatory Affairs
Financial Regulators Finalize Statement on Role of Guidance
NCUA, along with the Consumer Financial Protection Bureau (CFPB) and other federal financial regulators, issued a final rule Tuesday confirming the difference between regulations and guidance. Per the statement, unlike laws or regulations, supervisory guidance does not have the full force and effect of law.
CUNA submitted comments on the rule to both NCUA and the CFPB, noting its appreciation for the rule which, “not only ensures credit unions understand where an examiner is basing its decisions, but also ensures the basis for such decisions is well-founded, given statutes must go through the legislative process and regulations through the rulemaking process under the Administrative Procedure Act.” (CUNA News Now, Jan. 19)
NCUA Adjusts Supervisory Expectations Due to Coronavirus Crisis
The NCUA’s supervisory efforts in 2021 will be adjusted to take into account the continuing coronavirus crisis, NCUA Chairman Rodney Hood said in a letter to credit unions.
“The NCUA remains committed to incorporating efficiencies into its examination and supervision program to address the effects of the COVID-19 pandemic on credit unions and their members,” Hood wrote.
Hood said the agency will maintain a commitment to its extended examination cycle. The targeted Small Credit Union Exam program will remain in place for most federal credit unions with assets under $50 million, he said. For all other credit unions, NCUA examiners will conduct risk-focused examinations — concentrating on the highest risks.
Hood went on to state the areas that examiners will focus on and areas that may be placed on the back burner.
FinCEN Extends Comment Period for Rule Aimed at Closing AML Regulatory Gaps
The Financial Crimes Enforcement Network (FinCEN) announced recently it is reopening the comment period for its recent proposed rulemaking regarding certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA).
Chopra Likely to Return Agency to Cordray-Era Enforcement at CFPB
By selecting Rohit Chopra to run the CFPB, President-elect Joe Biden has sent a clear message that he wants the agency to return to a much stricter regulatory regime, CFPB-watchers said Tuesday.
Chopra currently serves as a commissioner at the Federal Trade Commission, but earlier in his career, he helped Sen. Elizabeth Warren (D-Mass.) organize the consumer bureau.
“It’s terrific that President-elect Biden picked Rohit to run the CFPB,” Warren said after Biden announced the nomination. “He’s been a fearless champion for consumers at the FTC and will be a fearless champion leading the consumer agency.”
House Financial Services Committee ranking Republican Patrick McHenry was far less pleased with Chopra’s nomination.
“This is proof that the Biden team is pandering to members of the far left who want to weaponize the CFPB to go after financial services companies they simply don’t like,” he said. “Mr. Chopra has made it clear his agenda includes limiting consumer choice, driving up cost of credit for everyone through restrictive policies, and hamstringing job creators through overregulation.”
NCUA Amends the Ability-to-Repay/Qualified Mortgage Rule
The NCUA issued a regulatory alert (21-RA-01) recently related to CFPB’s December publication of two final rules amending the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) in Regulation Z. Credit unions should read the provisions of the CFPB General QM Final Rule and the CFPB Seasoned QM Final Rule to determine their effects on operations. The CFPB provides a compliance guide and other resources.
With some exceptions, Regulation Z requires lenders to make a reasonable, good-faith determination of a consumer’s ability to repay any residential mortgage loan. Loans that meet Regulation Z requirements for qualified mortgages (QMs) obtain certain protections from liability. Regulation Z contains several categories of QMs, including the General QM category.
CUs Would Benefit from USDA Single Family Loan Program Stability
Many credit unions would benefit from improved efficiency and effectiveness of the U.S. Department of Agriculture’s Single-Family Housing Guaranteed Loan Program, CUNA wrote to the USDA this week. CUNA’s comments were sent in response to a USDA proposal that would mandate use of certain underwriting and closing systems for the program.
Specifically, it proposes to eliminate inefficiencies by mandating the use of the Guaranteed Underwriting System (GUS) and Lender Loan Closing System (LLCS) for applications and loan closing files, including for conditional commitments and loan guarantees.
CFPB Finalizes HPML Escrow Exemptions
The Consumer Financial Protection Bureau (CFPB) Tuesday issued a final rule exempting certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs).
CUNA supported the proposal in its September comment letter, saying it “presents a positive step forward to ensure that small, leanly staffed credit unions are not burdened with costly regulatory obligations that could prevent them from offering mortgage products that are right for a members’ financial situation.”
Specifically, the exempts from the HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if:
- The institution has assets of $10 billion or less;
- The institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and
- Certain existing HPML escrow exemption criteria are met.
It will take effect immediately upon publication in the Federal Register.
CFPB Releases Small Entity Compliance Guide for Debt Collection Rule
The Bureau has issued a small entity compliance guide summarizing the October 2020 Debt Collection Rule. The guide is available here.
The small entity compliance guide includes a detailed summary of the Rule’s substantive prohibitions and requirements, including those that generally restate the Fair Debt Collection Practices Act’s (FDCPA) prohibitions and requirements. Section 2 of the guide provides a summary that highlights the Rule’s key interpretations and clarifications of the FDCPA.
The Rule is effective November 30, 2021.
CFPB Publishes Guidance on Serving LEP Consumers
The CFPB issued guidance for financial institutions that serve limited English proficiency (LEP) consumers and members. The statement includes guidance on how financial institutions can serve LEP consumers in non-English languages, in a way that benefits consumers and complies with relevant statutes and regulations.
Specifically, the statement covers principles to inform and guide financial institutions in their decision-making related to serving LEP consumers, and key considerations institutions can use to develop compliance solutions for providing products and services in non-English languages to LEP consumers.
Marketplace / Economic News
New Year, Little Change in CU Auto Lending Outlook
A shortage of new cars could have an impact on a competitive but otherwise healthy auto lending market in 2021, credit union leaders say.
Auto manufacturing has seen a slowdown driven by reduced demand resulting from the pandemic and economic slowdown, as well as a recent shortage of semiconductors, according to one recent Wall Street Journal report. With fewer new vehicles being made and sold, consumers are hanging on to the cars they currently have, which has impacted the available inventory and kept used car prices high.
"Dealers are having a hard time maintaining inventory, which is causing some impact on lending," said Shane London, president and CEO of Deseret First Federal Credit Union in West Valley City, Utah.
Credit union auto lending is feeling the hit, too. Auto loans at federally insured credit unions were up by just 1.2% year-over-year during the third quarter, according to data from the National Credit Union Administration, compared to a 3.5% increase one year prior. While used car loans were up about 4.4% as of Sept. 30 – the same growth rate seen one year prior – new auto lending was down by 3.7%, compared with a 2.1% gain seen at the close of the third quarter of 2019.
The Federal Reserve Bank of St. Louis reported inventory during the fall was down between 30-45% from normal levels. (Credit Union Journal, Jan. 20)
Fed Governors Weigh In With Their Own Economic Updates, Views
Several Federal Reserve Board governors have recently provided their own economic updates, providing insights into the central bank's view of the economy and its policy-setting efforts.
Fed Chairman Jerome Powell spoke to Princeton University's Bendheim Center for Finance, quelling speculation about its asset purchase program. NAFCU's Curt Long provided some additional context to the Fed's efforts.
"The economic recovery clearly stalled in the fourth quarter, which played a role in the relief package passed in December," said Long, NAFCU's chief economist and vice president of research. "The Fed wants to reassure markets that both fiscal and monetary channels are working in tandem, and that further spending from Congress alone will not cause the Fed to ease off the throttle. It remains to be seen how much of the $1.9 billion spending plans unveiled by the incoming administration will come to pass, but the pieces are in place for a steady acceleration in growth until the summer, when hopefully the virus will be well under control."
News From Credit Unions
Bellwood Credit Union Welcomes a New Addition to the HFCU Branch Family
Bellwood Credit Union is excited to announce the addition of a new branch on the Defense Supply Center of Richmond’s campus. “Bellwood Credit Union has a more than a 60+ year relationship with DCSR and is happy to be returning to where it all began,” said Jason Ritter, Senior Vice President of Member Experience at Bellwood Credit Union.
The new branch on the DSCR base consists of a modern banking experience, Shared Branch services and a membership that is open to the entire DSCR workforce.
Opening day celebrations have been pushed back due to COVID restrictions.
Richmond Heritage Federal Credit Union Names Chairman
The Richmond Heritage Federal Credit Union announced Friday it elected Antione M. Green as its next chairman on Dec. 29, 2020.
Green joined the board in 2018. He is the co-founder of the Patrick Henry School of Science and Arts, where he also served as CEO. He also serves as board president of the Richmond Urban Collective, a nonprofit organizing a proposed all-male charter school in Richmond.
“I’m honored to be selected by my fellow board members to lead us at a very critical period in our history,” Green said in a statement. “I think we owe it to our 10 founders, all Richmond Public Schools teachers, to ensure our legacy continues and we continue to ensure our members continue to have access to affordable capital for the next 85 years.” (Virginia Business)
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