Sept. 11, 2015 NASCUS Report | NASCUS


Sept. 11, 2015

MBL proposal should consider state rules, needs

Our comment letter on NCUA’s proposed member business lending/commercial loans rule took a constructive tack – we support the proposal, but see a number of areas in which it could be improved, particularly taking into account the needs of state-chartered credit unions. Specifically, we urged the agency to preserve in the final rule a portion of existing regulation (but left out of the proposal) that would allow states with specific rules regarding business lending to maintain, repeal or amend their rules while also allowing any additional state to come forward in the future with a “state-specific” rule. We also urged the agency to require boards (or committees of boards) of all credit unions engaged in business lending to approve a comprehensive, written commercial loan policy that is reviewed at least annually and updated as needed, and for the board or board committee to receive periodic briefings on the commercial lending program and portfolio. “Any financial institution engaging in commercial lending must understand the nature of the inherent differences between consumer and commercial credit,” we wrote. “Such an understanding should be evident in policies, processes, and staffing utilized by the financial institution to govern and manage its commercial lending portfolio.”

NASCUS comment letter on MBL/commercial lending proposal
Press release/summary of NASCUS letter

Analysis of OTR calculation continues

We remain excited at the proposition that the NCUA Board will vote in January 2016 on publishing methodologies for calculating the overhead transfer rate and federal credit union operating fees as public notices in the Federal Register. In the meantime, we are reviewing and analyzing publicly available data and developing recommendations about what an equitable OTR calculation should look like. That, in addition to meeting with NCUA Board members to ensure they appreciate our concerns about the OTR and the importance of the calculation for the credit union system. Stay tuned for analysis, talking points, and comment letter recommendations from us over the next few months.

Chart on FISCU growthMid-year stats show states grew a bit faster in assets, members
There are fewer federally insured credit unions than there were a year ago – but the state chartered credit unions among them that are still around grew faster in assets, and members, than did their federally chartered brethren, according to a NASCUS review of NCUA mid-year data released last week. Comparing the one-year periods ending in June 2015, state-chartered credit unions increased their assets by 6.2% (by $32 billion for a total of $548.7 billion), and their memberships by just short of 4% (by 1.8 million for a total of 47 million), according to the NCUA mid-year call report data. Federals increased assets by 5.6% (by $32.8 billion for a total of $619.5 billion) and memberships by 2.6% (by 1.3 million for a total of 54.1 million). The mid-year data also show that 106 FISCUs went away during the June-to-June period –57% of which held assets of less than $10 million. On the federal side, 165 FCUs went away – 70% of which held less than $10 million in assets. As of June ’15, there were 2,304 FISCUs and 3,854 FCUs – representing 37% and 63%, respectively, of all FICUs (continuing a trend of the ratio of states to federals that has been more or less static for the last 10 years). Additionally, NCUA released its “state maps” report this week, tracking federally insured credit union performance in each state.

NCUA quarterly U.S. map review release

More sponsors for marijuana business banking bill in House
Marijuana business banking legislation in the House – which would give clear legal and regulatory standards to credit unions for serving their members in the legal marijuana business – has earned two more co-sponsors since Congress returned to work this week. Reps. Joseph Heck (R-Nev.) and Ted Lieu (D-Calif.) signed onto H.R. 2076, the Marijuana Businesses Access to Banking Act of 2015, introduced by Rep. Ed Perlmutter (D-Colo.). The bill now has 32 co-sponsors, but only two of those are Republicans. The legislation – and a companion piece in the Senate, S.1726 – has a long way to go, however. We are continuing to engage Congress on the issue, to ensure that state credit unions have some fundamental questions answered about liability under federal law for credit unions and other financial institutions dealing with accounts serving these businesses (including preserving regulators’ ability to address any safety and soundness or BSA/AML concerns arising from legal state marijuana accounts).

Nick Bourke/Pew Trusts video‘Framework’ for rules on small dollar/payday loans highlighted at Summit
A regulatory “framework” on payday lending and other small loan products will be released soon – and, rumor has it, that means very soon –by the CFPB, the likely first step in a rule-making process. If you are on the lookout for what that framework means for credit unions, Nick Bourke from the Pew Trusts, who has been working closely with the consumer agency on the framework, will be on hand at the NASCUS 2015 State System Summit in New Orleans to provide a sneak peak – and answer questions. If you want a sneak peak at Nick’s sneak peak, take a look at the video he cut for us (just click on the image, or use the link below).

Nick Bourke of Pew Trusts on his 2015 Summit presentation
NASCUS 2015 State System Summit registration information

BRIEFLY: NCUA Board meets; agency complaint tracking; CEOs honored

The asset threshold for “reg flex” and civil money penalties are both on the agenda for next week’s open meeting of the NCUA Board, Sept. 17 at agency headquarters in Alexandria … NCUA this week unveiled its new “Consumer Assistance Center” technology, which allows consumers to post their complaints and inquiries online and check the status of those online as well. NCUA stated, in a release, this approach is aimed at making the resolution of online consumer complaints “easier and more efficient.” … “Well done” is in order for CEOs of NASCUS-member credit unions for being honored recently by the Credit Union Executives Society (CUES): Gary Agnes of Elevations CU (Colo.) for being named society 2015 Outstanding Chief Executive, and; Pat Smith of Unitus Community CU (Ore.) and Jane Watkins of Virginia CU (Va.) for being inducted into the society’s Hall of Fame:

NCUA Board meeting agenda for Sept. 17
NCUA release on complaint technology


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Patrick Keefe, Director of Communications, or (703) 528-5974