March 4, 2016
State-chartered, federally insured credit unions grew at strong rates in both assets and memberships, as indicated by year-end data released by NCUA this week. Overall, the state credit unions (or FISCUs) saw assets grow by 9.6% and memberships advance by 5.5%. By comparison, FCUs saw assets grow by 5.3% and memberships rise by 1.8%, according to the NCUA data.
“Growth of credit unions, regardless of charter, is good for consumers and the nation’s overall financial well-being,” said Lucy Ito, president and CEO of NASCUS. “We are encouraged that state-chartered credit unions are thriving under their states’ regulatory regimes, which indicates the continuing strength of the dual-chartering system.” In total numbers, FISCUs at year-end 2015 held $576 billion in total assets, or 48% of all assets in federally insured credit unions. As for memberships, the state-chartered CUs held 48.4 million, or 47% of all memberships. In assets, the FISCU portion increased last year by .98%. Data for state-chartered, privately insured credit unions is not included in the NCUA numbers released Thursday. NASCUS will provide that information at a later date.
(This item updated from the email version sent earlier today.)
Institutions that wish to be designated as “rural” may submit applications to the Consumer Financial Protection Bureau (CFPB) beginning March 31, the agency announced this week, following through on legislation passed late last year. The application process, CFPB stated in a release, is to allow the bureau to consider whether there are smaller institutions that merit a designation as “rural” lenders, but do not qualify under current guidelines. “The Bureau is taking quick action to fulfill our responsibility to Congress and implement the law,” stated CFPB Director Richard Cordray in the release. Congress passed the Helping Expand Lending Practices in Rural Communities (HELP) Act in December, which (among other things) directs CFPB to establish an application process under which a person who “lives or does business in a state may apply to have an area in the state identified as a rural area if it has not yet been so designated by the CFPB for purposes of federal consumer financial law.”
To request a rural designation, CFPB stated In its release, applicants need to identify the area and the state in which it is located. As set out in the application process, institutions must then provide information that will allow the CFPB to evaluate the application under the parameters of the new law, CFPB stated. The agency added that the application process will be open through Dec. 4, 2017. However, any application submitted after April 8, 2017, will be considered only if the Bureau “determines the designation decision process for that application can be completed by the sunset date of Dec. 4, 2017, based on the time remaining, the complexity of the application, and any other relevant factors.”
Financial professionals who file “Reports of Foreign Bank and Financial Accounts” (FBARs) would see some changes in what they file under a proposed rulemaking issued this week, intended to “revise and clarify certain provisions in the rules.” The Financial Crimes Enforcement Network (FinCEN) issued the notice of proposed rulemaking Tuesday for the FBARs, which FinCEN said would mainly apply to financial professionals who file the reports due to their employment responsibilities. Also in the notice of the proposed rulemaking, FinCEN pointed out that, as a result of recent legislation, the due date for FBAR reporting will be April 15 of the year following the Dec. 31 report ending date (for example, for 2016 reports, the due date will be April 15, 2017). However, for 2015 reports, the due date remains June 30, 2016. Comments are due within 60 days of publication in the Federal Register.
Legislation aimed at providing regulatory relief to smaller institutions – by requiring federal regulators of credit unions and banks, including NCUA and the CFPB, to consider the institution’s business model and possible unintended consequences of new regulations -- is headed for the House floor after action Wednesday in the Financial Services Committee. H.R. 2896, the Taking Account of Institutions with Low Operation Risk Act (TAILOR Act), would also require federal regulators to perform a five-year review on past regulations and report annually to the House Financial Services and Senate Banking Committees on steps that are being taken to comply with the measure. The legislation was introduced by Reps. Scott Tipton, R-Colo., and Andy Barr, R-Ky., and cosponsored by Rep. Ed Perlmutter, D-Colo. All are members of the Financial Services Committee.
Following his primary victory on Tuesday in the Alabama Senate race, Senate Banking Committee Chairman Richard Shelby (R-Ala.) said this week that he will review the 16 nominees up for positions before the panel and announce next week which the committee will consider. Among the 16: NCUA Board Member J. Mark McWatters, nominated as a member of the Export-Import Bank of the U.S. Prior to this week’s primary, Shelby had deferred action on nominations pending before the Banking Committee, including that of McWatters. As recently as last week, the senator reportedly said about nominations that “we can talk about this later.” Shelby reportedly said this week that the two nominees to the Securities and Exchange Commission “ought to be high priority." He added, however, that no decisions have been made yet and he hadn't discussed it with committee members.
Our CU Executives Forum in Seattle may be less than three weeks away (Wednesday, March 23), but there’s still plenty of time to register for this event. The diverse agenda of leading-edge topics at the forum – including commercial/business lending; earthquake preparedness; an economic outlook; and national issues, including the Overhead Transfer Rate and others – make up a dynamic program that cannot be missed. The one-day program runs from 8:30 a.m. to 3:30 p.m. at the Seattle Airport Marriott Hotel. Cost is $199 for members, $299 for non-members. Hope to see you there … the NASCUS Legislative and Regulatory Committee met this week, discussing a variety of issues including the OTR, the new MBL rule, EGRPRA and more …
Patrick Keefe, NASCUS Communications, firstname.lastname@example.org or (703) 528-5974