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July 6, 2018

HMDA exemptions in reg relief law
spur joint statement by NCUA, others

Partial exemptions for some financial institutions from certain Home Mortgage Disclosure Act (HMDA) requirements resulting from regulatory relief legislation enacted in May are outlined in a joint statement issued Thursday by NCUA and the other federal financial institution regulators.

It is the first such joint action taken by the regulators in response to the enactment May 24 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, S.2155.

The statement explains that exemptions provided under the legislation are:

  • For closed-end mortgage loans if the institution or the credit union originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years.
  • For open-end lines of credit if the institution or credit union originated fewer than 500 open-end lines of credit in each of the two preceding calendar years.

The joint statement was issued by NCUA, the FDIC, the OCC, and the BCFP (formerly known as the CFPB), with some slight variations.

But commonly included in the statement was the comment that the BCFP expects to provide further guidance later this summer on how the new reg relief law will apply to HMDA data collected in 2018.

“For closed-end mortgage loans or open-end lines of credit subject to the partial exemptions, the Act states that the ‘requirements of [HMDA section 304(b)(5) and (6)]’ shall not apply,” the statement reads. “Accordingly, for these transactions, those institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C.”

The statement also notes that it does not affect 2018 Loan/Application Registers (LARs) formatting and submission. More specifically, according to the statement:

  • LARs will be formatted according to the previously-released 2018 Filing Instructions Guide for HMDA Data Collected in 2018 (2018 FIG).
  • If an institution or credit union does not report information for a certain data field due to the act’s partial exemptions, the institution or credit union will enter an exemption code for the field specified in a revised 2018 FIG that BCFP expects to release later this summer.
  • All LARs are to be submitted to the same HMDA Platform; a beta version of the HMDA Platform for submission of data collected in 2018 will be available later this year for filers to test.

NCUA’s version of the statement notes (under the heading “supervision and compliance”) that “These changes do not affect the NCUA’s supervision approach to compliance with requirements for recording and reporting 2018 HMDA data. For information on the approach, see the NCUA Letter to Credit Unions on Supervisory Priorities for 2018, 17-CU-09.”

NCUA notice: Information about the Recent Changes to the Home Mortgage Disclosure Act

NCUA Letter to Credit Unions on Supervisory Priorities for 2018, 17-CU-09


Louisville Metro Police Officers Credit Union of Louisville, Ky., last week became the third federally insured credit union of 2018 to be liquidated, following actions earlier this year against credit unions in New Jersey and Illinois, both of which were also state-chartered. NCUA said late last week that the Kentucky Department of Financial Institutions named the federal agency the liquidating agent for the approximately $20 million credit union, counting about 3,300 members, after determining the credit union was insolvent and had no prospect for restoring viable operations. The closed credit union’s membership, shares, loans, and all other assets were folded into Commonwealth Credit Union of Frankfort, Ky., a $1.2 billion institution with approximately 98,376 members.

Louisville Metro Police Officers Credit Union Closes; Commonwealth Credit Union Assumes Members, Shares, and Loans


A Colorado credit union seeking to serve marijuana advocates and groups – after modifying its business plan to no longer include service to marijuana-related businesses – must reapply for federal share insurance, a federal court ruled last month. The court also ruled that the credit union’s lawsuit against NCUA asking that the agency be forced to provide insurance is moot, and that the case is closed.

In a June 25 ruling, U.S. District Court Judge Raymond P. Moore (for the district of Colorado) said that the lawsuit brought against NCUA by the Fourth Corner Credit Union of Denver had changed after the credit union “fundamentally changed” its business model. Fourth Corner was granted conditional approval for a “master account” from the Federal Reserve Bank of Kansas City earlier this year after the credit union said it would serve individual companies that support the legalized marijuana industry (such as accountants, lawyers and landlords) but not state-licensed marijuana businesses directly). In its filings with the reserve bank, the credit union said it would not “serve marijuana-related businesses until there is a change in federal law that authorizes financial institutions to serve marijuana-related businesses.”

Moore pointed to that language in his ruling. “So it is clear, serving marijuana-related businesses was one of the purposes of plaintiff as originally formed,” Moore wrote. However, he added that Fourth Corner’s pledge to the Fed to no longer serve marijuana-related businesses “is a fundamental change to plaintiff’s business model that leaves its original application for insurance moot.”

The judge noted that the credit union may in the future commenceserving marijuana-related businesses, “but that is not plaintiff’s business right now.” He said while there may be a controversy over whether NCUA can insure a credit union intending to serve marijuana-related businesses, “plaintiff is not currently one of those credit unions, and thus, the controversy is not live.”

Ruling of Federal Judge Raymond Moore in 4CCU v. NCUA


The Federal Reserve Board is considering a three-year extension of interagency guidance regarding reverse mortgage products and is accepting public comments until Sept. 4, according to a notice this week in the Federal Register. The guidance, Interagency Guidance on Managing Compliance and Reputation Risks for Reverse Mortgage Products, was first adopted in 2010 by all the federal bank financial institution regulators, including NCUA, under the umbrella of the FFIEC. That guidance focused on the need to provide adequate information to consumers about: reverse mortgage products; to provide qualified independent counseling to consumers considering these products; and to avoid potential conflicts of interest. It also addressed related policies, procedures, internal controls, and third-party risk management.

Comment Request on reverse mortgage products


An analysis of monthly consumer credit data shows the majority of student loan payoffs occur early and coincide with large payments and balance reductions on other student loans and revolving credit products, the BCFP said in a new report released this week by its Office of Research (OFR).

The bureau said that patterns it found highlight the interconnected nature of borrowers’ finances, as repayment of one type of debt affects payments and borrowing on other types of debt. According to the report, the typical student loan has a term of 10 years and features equal monthly scheduled payments. Borrowers may, however, pay their loans off early at any time by using savings, gifts, or other resources, or by refinancing with a new loan – and the research, presented in a “Data Point” report, showed that most prefer to do so with a single large payment when they can.

“The timing of this payment coincides with a broader reduction in existing debts and is followed by increases in home purchases,” according to a blog post late last week by bureau economist Thomas Conkling. “However, for those borrowers who are unable to, or choose not to, pay off their loans early, the reduction of other debts that follows their final payment suggests that their required monthly student loan payments constrained their ability to pay down these other debts.”

Key findings of the study include:

  • Most borrowers paying off a student loan do so before the final payment is due, often with a single large final payment.
  • Borrowers paying off a student loan early also reduce their credit card balances and make large payments on their other student loans at the same time. In addition, these borrowers are 31% more likely to take out their first mortgage loan in the year following the payoff than in the year preceding the payoff.
  • The smaller share of borrowers who pay off their loan according to the scheduled payments pay down, rather than take on, other debts in the months following payoff.

NASCUS web pages on BCFP actions

BCFP report: New research report on student loan repayment and broader household borrowing


Two veterans of credit union service and regulation will be presented with the 2018 Pierre Jay Award in less than two weeks at the 2018 NASCUS State System Summit in Orlando.

Ron McDaniel, former president and CEO of California Credit Union in Glendale, Calif., and Sarah Vega, chief of staff and senior policy advisor to NCUA Board Chairman J. Mark McWatters, were selected for the honor. Those eligible for the annual award are persons, programs or organizations that have made a significant contribution to the state credit union system over the last year (or years); the honoree does not necessarily have to be affiliated with NASCUS. However, only NASCUS members are eligible to submit a nomination, which is considered by a committee appointed by the NASCUS chairman for selecting one or more honorees.

In addition to serving as a credit union CEO, McDaniel was a NASCUS advisory council member. He also represented credit unions for more than 10 years as a member of the California Department of Business Oversight’s advisory committee. He advocated for improvements in the state credit union system and encouraged credit union colleagues to get involved as well.

Vega, in addition to serving as staff chief for NCUA’s McWatters, has previously served in the same capacity for NCUA Board Member Michael E. Fryzel. Prior to that, Vega was director of the Illinois Department of Financial Institutions; during her tenure in Illinois, she contributed to the modernizing of the Illinois Credit Union Act to establish a balance between permitting credit unions to compete in a changing environment and maintaining the safety and soundness of the industry. She is a former NASCUS chairman.

“Congratulations to Sarah and Ron for earning this honor,” said NASCUS President and CEO Lucy Ito. “Sarah has relied on her extensive background in the areas of credit union law and policy to strengthen the relationships between federal regulators, state supervisors and credit unions” she said, noting that Vega has dedicated her career to credit unions and ensuring a safe, sound and robust credit union system at both state and federal levels.

“Ron is a titan in the credit union industry and has consistently used his stature to mentor young credit union professionals and bridge divides between credit unions and regulators,” Ito said. “I wholeheartedly agree with his colleagues who describe him as ‘a leader by example and action.’”

The pair will be presented with their awards July 18 at the State System Summit, which runs July 16-19 at the Disney Yacht and Beach Club resort in Orlando.

About the Pierre Jay Award

NASCUS press release: Vega, McDaniel named Pierre Jay Award 2018 recipients

Information/registration for NASCUS 2018 State System Summit

ON THE ROAD: Helping to bring smiles to kids in Boston

NASCUS’ Lucy Ito (at left) helps stuff more than 500 bags for delivery to Boston Children’s Hospital, part of a “give back” project sponsored by credit unions at last week’s America's Credit Union Conference (sponsored by the Credit Union Natl. Assn. (CUNA)) in Boston. The bags contained stickers, tattoos, crayons, and glue sticks, and will be distributed to children who will be spending their summer in a hospital room.

BRIEFLY: Welcome newest CU member

NASCUS welcomes its latest member, Tennessee Employees Credit Union of Nashville. The credit union counts more than 3,800 members and $28 million in assets; Sherrie Brooks is President and CEO.

Information Contact:
Patrick Keefe,