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Sept. 23, 2016

New FOM rule expected ‘this fall’

Look for a new rule this fall from NCUA on field of membership – with substantial changes in membership definitions – NCUA Board Chairman Rick Metsger said this week at a Washington meeting. In remarks that he could very well expand upon at the NASCUS State System Summit (in two weeks – Oct. 5-7 in Chicago) – the NCUA leader told a gathering of the National Association of Federal Credit Unions (NAFCU) that the new regulations would provide credit unions the ability to provide more services to more members of the American public. “The fact is, Congress gave us the power to interpret local communities and who is eligible to join,” Metsger told the group. In other remarks, the NCUA leader discussed the agency’s efforts at transparency, pointing to the briefing on the NCUA budget in late October (in which NASCUS hopes to participate). Additionally, Metsger told the group he expects next week to have recommendations from his Exam Flexibility initiative, and ultimately aims to have changes set for the 2017 exam cycle. (Look for more about his EFI during the Summit gathering in two weeks.)


Final CFPB rules on prepaid cards, small dollar loans, debt collection and checking account access are all in the pipeline, Director Richard Cordray also told the credit union group meeting in Washington this week. Regarding prepaid cards, Cordray said that the rules will include error correction rights, dispute resolution rights, and access to account information. Additionally the agency is looking at when and how consumers are charged overdraft fees on prepaids, and transparency of fees in general. On small dollar loans, he noted the proposed rulemaking covering payday loans, vehicle title loans, and certain installment loans and now out for comments has received more than half a million so far. He gave no timetable for a final rule consideration. On debt collection, he pointed to the bureau’s current outline of proposals and also noted that it plans to address first-party debt collectors. While he said “you will hear more about that soon,” he noted that the basic principle is that “companies should not collect debt that is not owed.” Regarding checking account access, Cordray said CFPB is encouraging financial providers to offer lower-risk account options more broadly. “This might include a checking or prepaid account that will not authorize consumers to overdraw, which means they would not have to be screened out of the system based on this risk,” he said.

Cordray prepared  remarks to NAFCU meeting


Only aggregate CUSO loan, investment and cash outlay totals must be reported when federally insured credit unions submit their third quarter 2016 5300 Call Reports (and Profile update) by Oct. 24, NCUA stated in a call report “Filing Tips” notice sent to credit unions this week. The agency stated that the more limited CUSO reporting requirement is the “result of the successful launch of the CUSO Registry” earlier this year. The agency also pointed out that the Oct. 24 filing deadline is three days later than announced in prior “Filing Tips” for the third-quarter reports (which must be submitted through CU Online, the agency’s on-line system). Additionally, the message stated that year-end (fourth quarter) 2016 reports are due Jan. 23 – and that the agency is “studying options to more closely align the credit-union and commercial-bank deadlines for filing Call Reports. The results of this study will be announced later in 2016. Pending this announcement, all scheduled Friday deadlines will move to the following Monday,” the agency stated.


CU Online: dates, instructions and more


NCUA has concluded that a credit union is permitted to use Private Company Council (PCC) alternative accounting reporting options when preparing Call Reports for filing, NCUA said this week in its first accounting bulletin in two years. The policy is effective immediately, according to the accounting bulletin (16-1), dated Sept. 13.

Applicable to all federally-insured credit unions, the accounting bulletin clarifies the agency’s policy by concluding that the Federal Credit Union Act “supports the conclusion that the ‘uniform and consistent’ requirement [under the FCUA] does not preclude the use of the PCC accounting alternatives.” The FCUA states that accounting principles applicable to reports or statements required to be filed with the Board by each insured credit union shall be “uniform and consistent with generally accepted accounting principles (GAAP),” the accounting bulletin states.

However, NCUA also noted that if it determines that a particular accounting principle within GAAP -- including a PCC accounting alternative -- is inconsistent with the statutorily specified supervisory objectives, the agency can prescribe an accounting principle for regulatory reporting purposes that is no less stringent than U.S. GAAP.


NCUA Accounting Bulletin 16-1: use of Private Company Council (PCC) alternative accounting reporting options


Preparation for same-day automated clearing house (ACH) payments under new rules that take effect this week, and voluntary diversity and inclusion policies and practices, are the subjects of two recent NCUA “Letters to Credit Unions” that have been summarized by NASCUS, and posted to the website. NCUA LTCU 16-CU-06, notes that on Friday (Sept. 23), an amendment to the NACHA Operating rules becomes effective, allowing users to send same-day ACH credit payments. “Same Day ACH builds on existing next-day ACH Network capabilities and establishes a new option for same-day clearing and settlement via ACH,” the letter states. “Both ACH Operators will begin delivering same-day ACH credit payments to receiving depository financial institutions twice each banking day beginning September 23” (that’s today). The letter also points out that NACHA rules require all depository financial institutions to be ready to receive Same Day ACH credit transactions today (Sept. 23).

The other letter, NCUA LTCU 16-CU-05, on voluntary diversity and inclusion practices, centers on a checklist that the agency has created to “help credit unions assess their diversity and inclusion policies and practices and identify opportunities to put those policies and practices to work.” According to the letter, the goal of the voluntary self-assessment is to establish a baseline for evaluating diversity and inclusion in the credit union system. “Individual credit union assessment results will not be shared with examiners and will have no bearing on CAMEL ratings,” the letter states. “There is no penalty for credit unions that currently have limited or no diversity or inclusion polices in place.”

NCUA 16-CU-05 Voluntary diversity and inclusion policies and practices checklist
NASCUS summary of LTCU 16-CU-05 (members only)
NCUA LTCU 16-CU-06 Preparing for Same-Day Automated Clearing House (ACH) Payments
NASCUS summary of LTCU 16-CU-06 (members only)


Today is David Cotney’s last day as commissioner of the Massachusetts Division of Banks after six years in the position. He has been with the agency for 20 years, starting as an examiner. According to the Boston Globe, taking his place will be Terry McGinnis, former general counsel for Eastern Bank, the state’s largest community bank, who retired last week from the Boston-based bank. Additionally, according to the newspaper, McGinnis’s appointment marks the first time in nearly three decades that the state’s banking commissioner will come from the banking industry and not from the regulatory side. “David Cotney leaves a legacy of building substantive and constructive dialogue between state and federal banking regulators,” said NASCUS President and CEO Lucy Ito. “He assumed a leadership role for the state system as a tireless champion of both state banking and state credit unions. For example, as chairman of the State Liaison Committee of the FFIEC, he vigorously represented state system issues. We are very grateful for his service and wish him the best.”

SUMMIT NOTES: Additional Summit sessions look at commercial lending, NMLS

Two additional sessions have been added to the 2016 NASCUS State System Summit – in just two weeks in Chicago (Oct. 5-7). The first is a panel discussion on the future of member business/commercial lending at credit unions, focusing on the investments credit unions must make to engage in the lending practice, effective supervisory tools currently available outside of the credit union space, and how states have approached the issue. The second panel looks at the Nationwide Multistate Licensing System and Registry (NMLS). Titled “More than Mortgage Licensing: The Evolving NMLS,” the session is designed to cover updates on mortgage licensing, and other initiatives underway by the system. Both sessions are on Friday, Oct. 7, at the Summit venue the Westin Chicago River North hotel. There’s still time to register; see the link below.


Updated agenda, registration: 2016 NASCUS State System Summit (Oct. 5-7, Chicago)

BRIEFLY: Hello in GA; ‘viewpoints’ on mortgage lending regulation

Welcome to Melissa Sneed as the new deputy commissioner for supervision for the Georgia Department of Banking & Finance. She is taking the place of Lori Godfrey who is leaving the department to join the Community Bankers Association of Georgia … NASCUS’s Lucy Ito was a featured speaker this week at the American CU Mortgage Association annual meeting in a “Viewpoints” session – along with Credit Union Natl. Assn. President and CEO Jim Nussle, John Stocchetti (of the FHLB of Chicago) and Dave Bohley of Fannie Mae. In her remarks, Ito focused on the interplay between the state and federal CU systems and what is on the minds of state credit union regulators with respect to credit union mortgage lending.

Summit 2016

Information Contact:
Patrick Keefe, NASCUS Communications, or (703) 528-5974