CURRENT Newsletter | 29 October 2021
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Headlines
- In a Positive Development for CUs, White House Framework Omits IRS Reporting Proposal
- League President/CEO Carrie Hunt Urges CUs to Register Now for Ignite 2021 | League Annual Meeting
- VACUPAC Golf Tournament Tees Off Nov. 10
- Second Hearing Concludes in State-Level FOM Case Before State Corporation Commission
- Resources for NCUA's MERIT Exam System Now Available
- New CFPB Chief Vows Tough Oversight of Big Tech, Large Banks
- NCUA Should Conduct Broader Evaluation of Amendments to Subordinated Debt Rule, CUNA, NAFCU and Inclusive Tell Agency
Compliance / Regulatory Affairs
- HMDA Reminder – Use the 2020 Census Data Beginning January 1, 2022
- CFPB Issued Final Rule to Effect Annual Adjustments to TILA Thresholds for 2022
- MLA Database Users Must Keep Accounts Active
- NCUA Board Announces Meeting Schedule for 2022
Education / Training
Credit Union News Releases
- Northwest Federal Credit Union Foundation’s Drive for the Driven Golf Tournament Raises More Than $136K for Scholarship Program
- 1st Advantage Colleagues Give Back to Local Non-Profits
- Vizo Financial Holds Second Virtual Payments Conference in 2021
Financial Services / Economy
- Credit Unions at Risk of Falling Behind on Digital Assets, Crypto, if NCUA Doesn’t Act, CUNA Tells Agency
- Stablecoins Face Industry-Defining Regulatory Guidance
- Most Small Banks Say They'd Refuse to Sell to CU on Principle
Risk Management
Headlines
In a Positive Development for CUs, White House Framework Omits IRS Reporting Proposal
The White House's reconciliation framework does not contain the credit union-opposed provision requiring increased reporting to the Internal Revenue Service (IRS), according to reports Thursday and a White House release outlining the framework.
"This is a positive development for credit unions and an important step forward in our now months-long battle against this proposal," said League President/CEO Carrie Hunt. "We know this remains a fluid situation and proposals like this can resurface prior to passage, so we remain engaged."
Credit unions strongly pushed back against the proposed provision since it was first discussed in the summer. Six members of Virginia's Congressional delegation signed on to letters initiated by colleagues noting their opposition to the proposal.
Learn more
Related: League Writes Treasury on Issues with Expanded IRS Reporting Requirements
Related: Virginia Reps Among 200-Plus Members of Congress Opposing Expanded IRS Reporting Requirements
League President/CEO Carrie Hunt Urges CUs to Register Now for Ignite 2021 | League Annual Meeting
Among the many highlights at this year's event, League President/CEO Carrie Hunt will outline her vision for the League and spotlight key initiatives for the coming year and beyond! View Carrie’s video invite!
Deadline to register for Ignite is 4 p.m., Nov. 3. You can attend the League Annual Meeting Business Session (Nov. 11) at no charge.
Need help securing a room? Contact your League's Mary Amyx at 800.768.3344, ext. 1630 or mamyx@vacul.org
VACUPAC Golf Tournament Tees Off Nov. 10
Calling all golfers: the 32nd Annual VACUPAC Golf Classic tees off Nov. 10 at Hell's Point Golf Club.
Your participation aids our advocacy efforts by supporting the Virginia Credit Union Political Action Committee, the state-level, non-profit, non-partisan political action committee of the Virginia Credit Union League and its affiliated credit unions. We need sponsors, as well!
Second Hearing Concludes in State-Level FOM Case Before State Corporation Commission
The second hearing in a now years-long credit union field-of-membership case concluded Friday afternoon before a State Corporation Commission hearing examiner. At issue is a field-of-membership expansion request initiated by Virginia Credit Union in November 2018 to add the Medical Society of Virginia to its FOM. That application was re-filed in March and May of 2019, and was eventually granted by the Bureau of the Financial Institutions in July 2019.
Your League is a party to the case, joining Virginia Credit Union and the Medical Society of Virginia. Though first argued in a July 2020 hearing before an SCC hearing examiner, last week’s hearing represented new proceedings after the SCC judges remanded the case to a new hearing examiner, with the added requirement that Virginia Credit Union must prove its compliance with the applicable laws governing field-of-membership expansions.
The burden of proof now rests with Virginia Credit Union, but the new proceedings also forced the bankers to narrow their argument in the case to whether it is “practicable and consistent with reasonable safety-and-soundness standards” for the Medical Society of Virginia to form its own credit union. Hundreds of exhibits and extensive written testimony were filed in this most recent proceeding, including expert witnesses for Virginia Credit Union, the League and the Virginia Bankers Association. Stay tuned for more details.
Resources for NCUA's MERIT Exam System Now Available
The National Credit Union Administration is making available resources to credit unions related to the Modern Examination and Risk Identification Tool (MERIT).
Resources are available for credit unions to learn about the new examination system, including:
- Implementation of Modernized Systems (Letter to Credit Unions 21-CU-08)
- Enterprise Solution Modernization (ESM) Program Webpage
- MERIT Training for Credit Unions
New CFPB Chief Vows Tough Oversight of Big Tech, Large Banks
Rohit Chopra sought common ground with House lawmakers in his first congressional hearing as Consumer Financial Protection Bureau director, and the strategy generally seemed to work.
Chopra, a Democrat who was sworn in on Oct. 12, focused on topics with bipartisan appeal: the bureau's enforcement efforts aimed at large companies, ways it may try to help small businesses (including small financial companies) and the importance of strong relationships between financial institutions and customers.
His peace offering appeared to be well received by Republicans and Democrats. During the four-hour hearing Wednesday, lawmakers avoided using the kind of fiery rhetoric that they've aimed at his predecessors in the past.
One of the consensus topics harped on by Chopra was the need for more oversight of the financial products and services being offered by technology giants. His appearance before the House Financial Services Committee came less than a week after the agency ordered Amazon, Apple, Alphabet’s Google, Facebook, PayPal and Square to turn over details about their payments businesses. (American Banker, Oct. 28)
Related: New CFPB Leadership Can Recalibrate Approach to Credit Unions
NCUA Should Conduct Broader Evaluation of Amendments to Subordinated Debt Rule, CUNA, NAFCU and Inclusive Tell Agency
NCUA needs to conduct a broader evaluation of proposed amendments to its 2020 Subordinated Debt Rule, CUNA, NAFCU and Inclusiv have told the agency in a joint letter.
Compliance / Regulatory Affairs
HMDA Reminder – Use the 2020 Census Data Beginning January 1, 2022
In February 2021, the U.S. Census Bureau released the 2020 Census Data tract boundaries. As a reminder, Regulation C, 12 CFR 1003.4(a)(9)(ii)(C) requires financial institutions to provide census tract information for certain properties.
To determine what to report for this data point, a covered financial institution must look to the “most recent decennial census conducted by the U.S. Census Bureau” and “use the boundaries and codes in effect on January 1 of the calendar year covered by the loan/application register that it is reporting.”
As a result, for data collected beginning January 1, 2022, financial institutions should use census tract information provided in the 2020 Census.
CFPB Issued Final Rule to Effect Annual Adjustments to TILA Thresholds for 2022
The Consumer Financial Protection Bureau (CFPB) Monday issued a final rule revising dollar amounts for certain regulations falling under Regulation Z that implement the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), the Home Ownership and Equity Protection Act (HOEPA), and the ability-to-repay/qualified mortgage (QM) provisions of the Truth in Lending Act.
MLA Database Users Must Keep Accounts Active
The Department of Defense Military Lending Act website has announced a planned systems upgrade scheduled for Jan. 20, 2022.
Under new version 5.11, all users will be required to log into their accounts at least once every 35 days to maintain active-account status.
After 35 days of account inactivity, accounts will be disabled and users will need to create a new account.
NCUA Board Announces Meeting Schedule for 2022
The NCUA board released its monthly meeting schedule for 2022. The calendar is posted to the NCUA’s public website along with the agendas, which are available one week in advance of each open board meeting.
Education / Training
CUNA Mutual Group Webinar: Culture Needs a Risk Management Approach
An effective culture is one that allows and encourages employees and departments to recognize that risks exist and be willing to take next steps in an educated and confident manner. Creating a strong culture of risk is a step towards progress and innovation. While not easy or quickly done, it will improve every aspect of a credit union organization.
Join CUNA Mutual Group’s expert risk management panelists Nov. 17 as they share insights into why creating a culture of risk is important, how to create a successful culture of risk, and what a good risk culture looks like.
Credit Union News Releases
Northwest Federal Credit Union Foundation’s Drive for the Driven Golf Tournament Raises More Than $136K for Scholarship Program
The Northwest Federal Credit Union Foundation (Foundation) the charitable arm of Northwest Federal Credit Union, recently held their 6th Annual Drive for the Driven Golf Tournament. The money raised from this year’s tournament will benefit the Foundation’s Scholarship Program, which awarded $125,000 in scholarships to individuals and Northern Virginia Community College’s Lifeline and Helping Hands programs earlier this year. The program has awarded over $1.6 million since its launch in 2004.
1st Advantage Colleagues Give Back to Local Non-Profits
1st Advantage colleagues continued their 1st AIDE Day tradition, volunteering their free time to support some of the organizations that make the Hampton Roads region healthier, stronger, and more vibrant, sending a clear message that the work of nonprofits matters.
Vizo Financial Holds Second Virtual Payments Conference in 2021
The future of payments came alive through a wealth of information at Vizo Financial’s 2021 Payments Conference on October 19-20. The conference focused education on financial payment technology, faster payments, ACH and international services.
The conference featured five experts from a variety of payment-related organizations
Financial Services / Economy
Credit Unions at Risk of Falling Behind on Digital Assets, Crypto, if NCUA Doesn’t Act, CUNA Tells Agency
Without action from NCUA, credit unions will fall behind when it comes to their ability to purchase digital assets, CUNA wrote in a letter to the agency in response to its Request for Information on digital assets and related technologies.
“Credit unions should be able to offer consumers an entry point to purchase and use digital assets. Credit union members trust their credit union to provide necessary financial services, and the ability to provide new financial services products and delivery channels is needed for credit unions to fulfill their mission,” CUNA stated. “Moreover, credit unions’ focus on financial literacy and financial education can be extended to digital asset-related products in order to help credit union members use these new products prudently.
“And as regulated entities, by law, credit union members receive robust protections not available when obtaining financial services from fintech and other providers with a business model designed to skirt regulations,” the letter adds.
Stablecoins Face Industry-Defining Regulatory Guidance
U.S. regulators considering oversight of stablecoins will have to balance the need for greater security against the risk of stifling innovation in a fast-growing corner of the cryptocurrency market. Recommendations for new cryptocurrency rules will be published within weeks, Federal Deposit Insurance Corp. Chairman Jelena McWilliams said on Oct. 25, including measures for stablecoins. The market for stablecoins, which are pegged to government-issued currencies, has ballooned to about $130 billion, according to data from Coin Metrics and The Block.
Most Small Banks Say They'd Refuse to Sell to CU on Principle
A majority of community bankers say they wouldn’t sell their institution to a credit union, even one that offered the highest bid — underscoring the rivalry between the two industries at a time of rising consolidation.
Fifty-three percent of bankers said in a recent survey that they would not sell to a credit union, while 47% said they would take the best offer.
The findings suggest that many executives at smaller banks are troubled by the recent trend of credit unions scooping up banks across the U.S.
“The animosity between banks and credit unions is significant, and something policymakers should not underestimate,” said Paul Weinstein, a senior advisor at IntraFi Network, which conducted the survey. (American Banker, Oct. 29)
Risk Management
FTC Warns Scammers are Sending Fake IRS Emails about Economic Impact Payments
There’s a fake IRS email that keeps popping into people’s inboxes. It says that you can get a third Economic Impact Payment (EIP) if you click a link that lets you “access the form for your additional information” and “get help” with the application.
But the link is a trick. If you click it, a scammer might steal your money and your personal information to commit identity theft. It’s yet another version of the classic government impersonator scam.
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