CURRENT Newsletter | 4 February 2022 - Virginia Credit Union League

Our parity powers legislation took an important step in the House of Delegates last night with a Commerce and Energy subcommittee's unanimous vote to report the bill to the full committee for its consideration.

HB209 will make the process easier for state-chartered credit unions to exercise the same powers as their federally chartered peers. Currently, state-chartered credit unions must seek permission from the state Bureau of Financial Institutions to do this. This bill would change the process to a notice requirement, whereby a state-chartered credit union would notify BFI of its intention to engage in an activity, service, or other practice that is authorized for a federally chartered credit union. Provided BFI doesn’t deny or delay that new authority, the state-chartered credit union would be authorized to engage in that activity after a 45-day waiting period.

League President/CEO Carrie Hunt testified before the subcommittee, noting the importance of parity legislation that helps state-chartered credit unions remain on equal footing with federally chartered credit unions.

HB209 will likely be heard by the full Commerce and Energy Committee next week, either Feb. 8 or 10. Companion bill SB329 could be heard by the Senate Commerce and Labor Committee as early as Feb. 7.

We appreciate credit unions' support of this bill through our Grassroots Action Center, through which we've generated 277 email messages to state lawmakers. If you haven't yet reached out to your lawmakers, please do so today!

Governance Committee Seeks Candidates for 4 League Board Seats

The Governance Committee of the Virginia Credit Union League seeks your recommendations for candidates to be nominated for election to the Board of Directors. In 2022, four board seats are open for election.

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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.

Credit union professionals and volunteers are eligible for both awards.

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CUNA Offering Virtual GAC Option; Registration Now Open

Credit Union National Association (CUNA) opened registration today for “CUNA GAC On-Air,” a limited-content, virtual option to attend the 2022 Governmental Affairs Conference (GAC). “CUNA GAC On-Air,” will include CUNA President/CEO Jim Nussle’s speech, the ED (Filene) talk with Mick Ebeling, an economic update with CUNA Chief Economist Mike Schenk, and more. To register for CUNA GAC, visit cuna.org/gac.

NCUA Issues HMDA-Related Reg Alerts

The National Credit Union Administration (NCUA) issued two regulatory alerts related to HMDA reporting.

Credit unions located in metropolitan areas that engage in certain types and volume of residential mortgage lending, and that had assets exceeding $48 million as of December 31, 2020, must file a report this year on mortgage loan applications received during 2021. Read the Regulatory Alert.

A second alert again noted that credit unions must comply with the Consumer Financial Protection Bureau’s Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). Read the Regulatory Alert.

FASB Eliminates TDR Requirements for CECL Adoptees

The Financial Accounting Standards Board Wednesday agreed to a CUNA-supported update to the current expected credit loss (CECL) standard. CECL is an accounting standard that recognizes lifetime expected credit losses.

The update eliminates Troubled Debt Restructuring (TDR) accounting requirements for entities upon adoption of the CECL standard.

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Virginia Could Kill Its First-in-U.S. Workplace COVID-19 Measure

Virginia officials may rescind the state’s first-in-the-nation standard for protecting workers from COVID-19 infections.

The possible withdrawal of the rule has been called for by Republican Gov. Glenn Youngkin, who, immediately upon taking office on Jan. 15, set out to reverse measures approved by the prior Democratic administration. Virginia is one of 21 states federally approved to enact protections for workers at private employers and state and local governments.

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League’s Carrie Hunt to Headline MACUMA’s Feb. 9 Virtual ‘Lunch-and-Learn’

League President/CEO Carrie Hunt will be the featured speaker at the Metropolitan Area Credit Union Management Association’s Feb. 9 Virtual Lunch and Learn. She’ll discuss the key issues credit unions MUST watch this year at the federal level; flag state trends that could creep into the D.C./Maryland/Virginia area; and talk about how we can change the dialogue on overdraft.

Feb. 16 Virtual Seminar: Your Safe Deposit Service - 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.

Feb. 24 Webinar: Legal Developments in Labor & Employment

Last year was a busy year for federal regulators, and 2021's issues are still affecting workplaces in 2022. Join Woods Rogers Labor & Employment attorneys as they review recent court cases and critical updates from the EEOC, DOL, and NLRB. They'll also discuss pandemic-related issues such as implementing vaccine requirements, the CDC's updated guidance, and whether the federal contractor vaccine mandate applies to credit unions. This session is SHRM and HRCI approved for 2 hours of continuing education credit. Your cost: only $49!

Comments Due April 4 on NCUA's Proposed Rule on Succession Planning

Comments on NCUA's proposed rule on succession planning are due by April 4. View the Federal Register entry here.

Through this proposed rule, the NCUA Board (Board) would require that Federal Credit Union (FCU) boards of directors establish and adhere to processes for succession planning. The succession plans will help to ensure that the credit union has plans to fill key positions, such as officers of the board, management officials, executive committee members, supervisory committee members, and (where provided for in the bylaws) the members of the credit committee to provide continuity of operations.

Loans Should Grow 9% in 2022, Notes Latest Trends Report

A new report is forecasting credit union loan growth of 9% in 2022 (even as the smallest CUs show negative growth), while the pace of deposits will slow and membership will rise slightly, according to CUNA Mutual’s Trends Report.

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Advocacy / Governmental Affairs

SAFE Banking Act Added to America COMPETES Act

The CUNA/League-supported Secure and Fair Enforcement (SAFE) Banking Act was added to the House’s America COMPETES Act, which will likely be voted on Friday. The SAFE Banking Act would provide protections to financial institutions serving cannabis-based businesses where it is legal.

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Democrats Circulate Bill to Rein in Stablecoins

Congressional Democrats are crafting legislation that would establish the first federal rules and prudential backstops for stablecoins, according to draft legislation obtained by American Banker.

The draft legislation — spearheaded by House Financial Services Committee member Rep. Josh Gottheimer, D-N.J. — would limit what institutions may issue stablecoins and would create a separate insurance fund supervised by the Federal Deposit Insurance Corp. to cover losses by nonbank stablecoin issuers. The draft legislation has been circulating on Capitol Hill for the last several weeks but has not been officially released. (American Banker, Feb. 3)

Compliance / Regulatory Affairs

Register Now for NCUA’s Feb. 10 Call Report Changes Webinar

Credit unions can get valuable information on changes to the NCUA’s Call Report Form 5300 during an upcoming webinar hosted by the NCUA on Thursday, Feb. 10.

Compliance: MLA Card Fee Spreadsheet Updated for 4Q 2021

CUNA has updated its Military Lending Act (MLA) credit card fee spreadsheet for the fourth quarter of 2021. The updated resource can be found in the CUNA Compliance Community’s “CUNA Compliance Tools” folder in the file share library, and under the “Resources” tab in CUNA’s MLA e-Guide.

The spreadsheet is necessary because a credit union may exclude a bona fide credit card fee from the military annual percentage rate (MAPR) if the fee is considered “reasonable,” under the MLA rule.

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InfoSight Provides Access to Law Summaries for All 50 States; Resources Impacting Credit Unions

As credit unions continue to grow and open branches with members in different states, it’s important to have a tool that provides summaries of state laws that impact credit unions. InfoSight provides national access to state law summaries and resources for all 50 states! Visit InfoSight today!

Financial Services / Marketplace

Credit Unions Grow Branch Count While Banks Slash Locations

Credit unions are adding branches at a time when most banks are closing them amid the increasing digitization of finance.

In 2021, the credit union industry added 46 branches by opening 310 and closing 264 while the banking industry produced a net figure of 2,927 closings, a record high. Banks have accelerated plans to consolidate branches as the COVID-19 pandemic led to greater consumer adoption of mobile channels, and the industry has increased its technology spend to better compete with digital-only banking startups that have made market share gains.

But credit unions depend on membership, which could be more tied to retail branches than customer acquisition might be for a bank, said Paul Davis, director of market intelligence for advisory firm Strategic Resource Management. "I think credit unions, on average, are probably under-branched as opposed to banks who are probably over-branched," Davis said in an interview.

Northwest Federal Wins an Energage ‘Top Workplace’ Award for the Third Year in Row

Northwest Federal Credit Union recently announced that they are a recipient of a Top Workplace award from Energage, a nationally-recognized leader in measuring workplace engagement. This is Northwest’s third year receiving the award.

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Energage Names Chartway a 2022 Top Workplaces USA Winner

Chartway is proud to announce that in addition to being recognized as a “Top Workplace in Hampton Roads” by Inside Business and a “Top Workplace in Utah” by The Salt Lake Tribune in 2021, the Hampton Roads-based credit union has been awarded a 2022 Top Workplaces USA honor by Energage.

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Risk Management

Cold, Winter Conditions Deliver Potential Office Safety Issues

As colder winter weather reaches most parts of the country, credit unions need to be aware of safety hazards that could be introduced. As the weather changes, so do the risks to your credit union business. These risks can include slippery conditions – both inside and outside branch offices – and even the use of portable space heaters which can introduce serious fire and other safety hazards.

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