CURRENT Newsletter | 30 September 2021
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Headline News
- Vaccine Mandate: Credit Unions Not 'Federal Contractors' Based On NCUSIF Coverage
- Increased IRS Reporting ‘Fundamentally Flawed’ at any Threshold
- TRGroup Offering Live Demos of Business Partners' Products, Services
- Marketing Workshop: Getting Your Digital Story Telling Right
- CEO FORUM Set for Oct. 20; Registration Open!
- League Seeks Your Input on NCUA's Capital Adequacy Rule; Deadline Oct. 6
- No Nonsense Experience: Your CU's Diversity Journey
- Ignite Education Sessions: Strategic Considerations for 2022 and Beyond
- National Data Security, Privacy Law w/ Robust Standards Needed
- CUNA Backs Modernization Bill, Calls for Look at ‘Regulatory Gaps’
- CONNECT Conference Draws 50 CU Attendees
Compliance / Regulatory Affairs
- NCUA Letter to CUs Offers Info on End of Pandemic Homeowner Protection Programs
- Long Way to Go on Libor Transition as Key Deadline Nears
- CFPB Issues New Specifications for its Collect Website Relating to Credit Card Data Submission
- NCUA Comment Period for Digital Assets RFI Extended to Oct. 27
- COVID-19 Multifamily Forbearance Extended Again
Risk Management
Education & Networking
- Woods Rogers Offering Discount to CUs for Upcoming Labor & Employment Webinar Series
- CUNA Mutual Group Hosting Mortgage Lending Webinars
- CUNA Mutual Group Hosting Oct. 20 Webinar on HR, Employment Practices Risk
- Registration Open for NCUA’s DEI Summit, Nov. 2-4
- Building Financial Health for a Brighter Tomorrow: A World Council International Credit Union Day® 2021 Webinar
News About Credit Unions
News From Credit Unions
- George Ballew selected as Executive-of-the-Year in Mortgage Banking By IAOTP
- UVA Community Credit Union Welcomes Louis D. Farina, Jr. As Senior Commercial Loan Officer
News From Our Chapters
Financial Services / Economic News
- Treasury Secretary Sees ‘Catastrophic’ Consequences if Debt Ceiling Isn’t Raised; Fed Chair Says Inflation Will Moderate
- Can Regulators Keep Pace with Fintech Innovation?
Headline News
Vaccine Mandate: Credit Unions Not 'Federal Contractors' Based On NCUSIF Coverage
Other Contractual Arrangements and Future Regulations By DOL Still Considerations
On Sept. 9, President Biden announced his COVID-19 Action Plan: Path Out of the Pandemic (Executive Order 14042). The action plan includes, among other things, requirements for employees to combat COVID-19 -- specifically those working for large (100-plus employees) private employers, working for the federal government, and working as federal contractors and subcontractors.
The unanswered question for federally insured credit unions is whether “federal contractors” in Executive Order 14042 include financial institutions with federal share and deposit insurance, which are considered government contractors within the meaning of the regulations implementing Executive Order 11246 (Affirmative Action Program).
Neither Executive Order 14042 nor the Task Force guidance issued last week clarify that financial institutions with federal share and deposit insurance are included in the term “federal contractors.”
- Therefore, until there is additional guidance such as regulations implementing Executive Order 14042 or guidance from NCUA, there is nothing to state that federally insured credit unions are federal contractors for purposes of Executive Order 14042. NOTE: The exception here is a credit union doing business with the federal government, or that has a lease or other agreement to provide services on federal government property. Credit unions in this category are among the entities that would seem to be covered by the Executive Order and therefore required to comply with the Executive Order. Examples here could include credit unions with branches inside federal government buildings or on military bases.
- Credit unions should consult with legal counsel to determine if there are any state mandates that apply or if employers can mandate that employees get vaccinated as a condition of employment.
CUNA and NAFCU have both issued summaries of the executive order, with both drawing the same conclusion noted above as to whether or not CUs are federal contractors for purposes of Executive Order 14042.
Increased IRS Reporting ‘Fundamentally Flawed’ at any Threshold
A proposal requiring increased financial institution reporting to the Internal Revenue Service is fundamentally flawed, CUNA wrote to all 535 Congressional offices Wednesday. The CUNA and League-opposed language was not present in the House Ways and Means Committee-passed legislation, but could potentially be added as the reconciliation package moves to the House floor.
We continue to call on credit union advocates to use the Grassroots Action Center to send a message outlining concerns with the proposal.
Learn more
Related: Security concerns, increased costs come with increased IRS reporting
Related: Senator Offers Bill to Block IRS from Collecting Data
TRGroup Offering Live Demos of Business Partners' Products, Services
The TRGroup, in collaboration with seven state leagues (including the Virginia Credit Union League), is excited to invite credit union executives to participate in our first Virtual “DEMO DAY” on Oct. 19.
Demo Day is an opportunity for credit unions to see live demonstrations of products and services with enterprise-wide benefits for your operations and your members.
Marketing Workshop: Getting Your Digital Story Telling Right
Digital storytelling helps us connect to people. Through videos, podcasts, commercials and other channels, we’re able to share meaningful stories about our credit union and our members. Join Elizabeth Rider (On the Mark Strategies) for a session at this year’s virtual Marketing Workshop covering:
- Components of an effective digital story
- How to strategically communicate your brand across all digital channels
- The secret to building and effectively executing a content marketing strategy
- The smarter way to budget for digital marketing
This virtual event (Oct. 14 & 15) event is brought to you by the Virginia Credit Union Leagues Marketing and Business Development Committee. We are excited to invite you to join us for a lot of fun, interactive education and networking. "See" you there!
CEO FORUM Set for Oct. 20; Registration Open!
This year's CEO Forum (small/mid-size CUs) will be held as a one-day, in-person event Oct. 20 at Credit Union House in Richmond. This is a great opportunity to learn from industry experts, network with your peers, and discuss your top-of-mind issues with new League President/CEO Carrie Hunt and other League staff.
League Seeks Your Input on NCUA's Capital Adequacy Rule; Deadline Oct. 6
Your League is seeking your input on NCUA's proposed rule that would provide a simplified measure of capital adequacy for federally insured credit unions more than $500 million in assets.
We invite you to provide the League with any comments or thoughts you have on this proposed rule. We would need them by Oct. 6 and ask that you email them to cvtipilson@vacul.org.
No Nonsense Experience: Your CU's Diversity Journey
Where are you in your credit union’s diversity journey? Whether you are in the beginning stages of engaging in diversity, equity, and inclusion conversations or looking for ways to continue to affect positive cultural changes in your credit union, please join credit union leaders from across the country for the No Nonsense Experience, starting Thursday, Oct. 7.
Offered as a one-hour, weekly course each Thursday, Oct. 7 through Oct. 28, 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.
Ignite Education Sessions: Strategic Considerations for 2022 and Beyond
Ignite 2021 will feature key education sessions guaranteed to help you address pressing strategic considerations heading into 2022 and beyond, including sessions on auto lending, commercial risk management, leveraging your CECL data, important regulatory considerations, and the outlook for the industry.
Learn more about Ignite 2021 and the League Annual Meeting.
National Data Security, Privacy Law w/ Robust Standards Needed
Credit unions fully support legislation containing a national data security and privacy standard, CUNA wrote to the Senate Commerce Committee Wednesday for its hearing consumer privacy.
CUNA supports the following principles for federal privacy and data security legislation:
- New privacy and data security laws should keep the Gramm-Leach-Bliley Act (GLBA) intact, as financial services their regulators have developed regulations, guidance and procedures for compliance.
- Any new privacy law should include both data privacy and data security standards.
- The new law should cover all businesses, institutions and organizations.
- Any new law should preempt state requirements to simplify compliance and create equal expectation and protection for all consumers.
- Breach notification or disclosure requirements are important, but these requirements alone
- won’t enhance security or privacy
- Hold entities that jeopardize consumer privacy and security accountable through regulatory
- enforcement
- Recognize this issue for what it is: a national security issue.
CUNA Backs Modernization Bill, Calls for Look at ‘Regulatory Gaps’
CUNA supported a credit union governance modernization bill and commented on oversight of fintech companies in a letter to a House subcommittee Wednesday for the record of a hearing on the future of financial services. CUNA hopes the subcommittee will examine the legal framework and regulatory scope governing the oversight of commercial businesses engaged in financial activity.
CUNA urged the subcommittee to look closely at the regulatory gaps that fintech and other companies exploit to provide financial services.
“Consumer protection can be vastly different when a product or service is offered by non-financial institution, and consumers do not always appreciate this difference,” it reads.
CUNA also noted its support for the Credit Union Governance Modernization Act, one of the bills discussed during the hearing. It would update the credit union member expulsion process while ensuring a fair procedure for reinstatement.
CUNA believes it would “allow credit unions the ability to better protect members and employees,” the letter reads.
The letter addresses bank sales to credit unions, and misleading critiques of these transactions.
“Banks that sell to credit unions ensure continued access to locally provided, safe and affordable financial services,” it reads. “These types of sales help prevent new banking deserts from developing. They should be encouraged—not impeded.”
The letter also notes CUNA’s opposition to the NCUA Oversight of Third-Party Vendors Act, which would permanently give NCUA the authority to examine credit union service organizations (CUSOs) and other third-party vendors used by credit unions.
CONNECT Conference Draws 50 CU Attendees
We welcomed 50 credit union professionals from across the Commonwealth for the 4th Annual CONNECT Conference!
Compliance / Regulatory Affairs
NCUA Letter to CUs Offers Info on End of Pandemic Homeowner Protection Programs
Credit unions are being reminded by NCUA that many homeowner protection programs put in place by the government during the pandemic are now expiring, and credit unions have until Sept. 30 to act on a number of related issues.
In a Letter to Credit Unions, the agency provided what it called “critical information” for complying with the expiration of the protection programs.
Long Way to Go on Libor Transition as Key Deadline Nears
With less than 100 days left before a key deadline, financial institutions are moving away from the world’s most important interest rate more slowly than regulators had hoped.
Despite years of preparation and hand-wringing, many new loans originated by U.S. financial institutions are still using the London interbank offered rate, or Libor, which is being phased out globally after a rate manipulation scandal years ago.
Many FIs have yet to lean into using non-Libor benchmarks — either the one that regulators have implicitly pushed or one of two competing rates that have gained some traction — when making loans. (American Banker, Sept. 28)
The NCUA encourages all federally insured credit unions to transition away from using the U.S. dollar LIBOR settings as soon as possible, but no later than December 31, 2021.
CFPB Issues New Specifications for its Collect Website Relating to Credit Card Data Submission
On Aug. 20, 2021, the Consumer Financial Protection Bureau (CFPB) issued new technical specifications for complying with credit card agreement and data submission requirements under the Truth in Lending Act and the Credit Card Accountability Responsibility and Disclosure Act of 2009. To comply with these two laws, credit unions with applicable credit card portfolios will make the required submissions through the CFPB’s Collect website.
NCUA Comment Period for Digital Assets RFI Extended to Oct. 27
The National Credit Union Administration (NCUA) Board unanimously approved, by notation vote, an extension of the comment period for the Digital Asset Request for Information from Sept. 27 until Oct. 27, 2021.
COVID-19 Multifamily Forbearance Extended Again
The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners as needed, subject to the continued tenant protections FHFA has imposed during the pandemic.
Risk Management
NYDIG Allows Members to Buy, Sell Bitcoin But CUs Should Recognize Risk
NYDIG, a digital asset management firm, has partnered with the nation’s largest online banking solution providers to allow account holders to buy, sell and hold bitcoin. Credit union members can now trade bitcoin through online banking and mobile banking channels. Offering this service to members significantly increases a credit union’s exposure to account takeovers.
Education & Networking
Woods Rogers Offering Discount to CUs for Upcoming Labor & Employment Webinar Series
The Woods Rogers 2021 Labor & Employment webinar series begins next Thursday, October 7. Registration closes on Oct. 6. We don't want you to miss a single session, so please follow this link to register today.
League members, your cost is $200, a $50 discount. Use the registration link above to secure this deal.
The following sessions are on tap:
- Legal Update: Federal Cases, News from the Big 3 & Virginia Law - Oct. 7 [1 p.m. - 3 p.m.]
- Marijuana in the Workplace - Oct. 14 [1 p.m. - 3 p.m.]
- The Diversity, Equity & Inclusion Took Kit - Oct. 21 [1 p.m. - 3 p.m.]
- Understanding How Lawsuits Work & the E-Discovery Process - Oct. 28 [1 p.m. - 3 p.m.]
- Panel: The State of the Workplace in 2021 - Nov. 4 [1 p.m. - 3 p.m.]
CUNA Mutual Group Hosting Mortgage Lending Webinars
You’re invited to participate in our quarterly series of CU-exclusive webinars designed to keep you fully informed of current mortgage lending practices, so you’re better prepared to help your members achieve their dreams of homeownership. Webinars begin Oct. 6.
CUNA Mutual Group Hosting Oct. 20 Webinar on HR, Employment Practices Risk
On Oct. 20, join CUNA Mutual Group’s expert risk management and legal panelists as they share what’s going on in this challenging employment landscape and answer your questions on what you can do to minimize potential employment practices/HR risks before they impact your organization.
Registration Open for NCUA’s DEI Summit, Nov. 2-4
NCUA is hosting credit union leaders, credit union trade and support organizations, and diversity and inclusion professionals during the agency’s second Diversity, Equity, and Inclusion (DEI) Summit.
Building Financial Health for a Brighter Tomorrow: A World Council International Credit Union Day® 2021 Webinar
The theme for International Credit Union Day® 2021 is "Building Financial Health for a Brighter Tomorrow." To expand on that vision, this World Council of Credit Unions’ (WOCCU) Oct. 21 virtual event will feature presentations examining financial health and all the complexities associated with that term for credit unions and their members.
News About Credit Unions
New Filene Research Focused on CUs & Data Analytics
Filene Research Institute launched what could be a first for the credit union industry – a study on credit unions’ data analytics practices.
What is being billed as the “Data Analytics Readiness Assessment,” the Madison, Wis.-based think tank announced on Tuesday a system-wide effort to survey credit unions and study data analytics practices to help measure the readiness and maturity of the industry’s business intelligence capabilities.
This research is being conducted through Filene’s Center of Excellence for Data Analytics and the Future of Financial Services. Members of the research team announced the new project during a webinar this week.
News From Credit Unions
George Ballew selected as Executive-of-the-Year in Mortgage Banking By IAOTP
George Ballew, Senior Vice President at Member Options LLC, was recently selected as Top Executive Of The Year in Mortgage Banking for 2021 by the International Association of Top Professionals (IAOTP) for his outstanding leadership, commitment and excellence within the Banking industry.
Member Options LLC, is a wholly owned subsidiary of UVA Community Credit Union, offering members a variety of mortgages and related services.
UVA Community Credit Union Welcomes Louis D. Farina, Jr. As Senior Commercial Loan Officer
UVA Community Credit Union is pleased to welcome Louis D. Farina, Jr. (Lou) as a senior commercial loan officer. Farina will be responsible for building business relationships and providing banking solutions to members with businesses located in the City of Charlottesville, Albemarle County, and the surrounding areas.
News From Our Chapters
League President/CEO Carrie Hunt to Speak at Tidewater Chapter's Oct. 14 Meeting
League President/CEO Carrie Hunt will be the featured speaker at the Tidewater Chapter's Oct. 14 meeting. Register by Oct. 8.
Financial Services / Economic News
Treasury Secretary Sees ‘Catastrophic’ Consequences if Debt Ceiling Isn’t Raised; Fed Chair Says Inflation Will Moderate
Treasury Secretary Janet L. Yellen offered a warning to lawmakers of “catastrophic” consequences if Congress doesn’t soon raise or suspend the statutory debt limit, while Federal Reserve Chairman Jerome Powell said inflation is likely to stay high in the coming months before moderating.
Learn more
Related: Senate Passes 9-week funding patch to thwart shutdown
Can Regulators Keep Pace with Fintech Innovation?
Digital payment products and alternative credit took off rapidly during the pandemic — and while they may have outpaced regulation, these technologies did not escape regulators' notice.
New fintech and payment services are likely to face tougher rules under the Biden administration, but the market is moving so fast that regulators can't keep up, according to a panel of financial technology legal experts at American Banker's Card Forum, taking place this week as a virtual event.
"Some of these [payment] products didn't exist five years ago," said Brian Tate, president and CEO of the Innovative Payments Association, a Washington, D.C.-based trade group. "We're in a pandemic, which strains resources, so it's much easier for regulators to focus on what they [already] know."
The pace of innovation has created regulatory gaps in which certain products don't have set rules, while other products are adhering to older rules that don't address current conditions, according to Eric Goldberg, a partner specializing in consumer financial services at the Washington, D.C.-based law firm Akerman. Earlier in his career, Goldberg was managing counsel for regulations at the Consumer Financial Protection Bureau during the Obama Administration.
One area of possible concern is the fintechs that perform bank-like functions without bank regulation. (American Banker, Sept. 29)
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