States posted healthy growth in 2017, year-end numbers show

State-chartered credit unions remained just on the verge of reaching half of all credit union assets at the end of 2017, according to figures compiled by NASCUS based on year-end statistics released by NCUA this week.

The year-end numbers show that all state-chartered credit unions (both federally and privately insured) now hold $676.6 billion in assets, out of the total of $1.39 trillion for all credit unions, both state and federally chartered (for 48.51% of the total). Additionally, state-chartered credit unions now count 53.6 million memberships, out of the total of 112.7 million credit union memberships nationwide (for 47.44% of the total at year-end 2017).

In terms of growth, state-chartered credit unions were robust in both assets and memberships. Assets grew by nearly 6% during the past year (specifically, 5.92%); memberships advanced by about 4% (3.82%). The state growth was slightly behind that of federally chartered credit unions, which advanced by about 7% in assets (7.18%), for a total of $718 billion. Memberships at FCUs were up by more than 4% (4.42%) to 59.1 million.

For another straight year, the number of credit unions declined, by 220 in 2017. State CUs saw their numbers drop by 111 credit unions (4.83%, compared to a 3.49% decline in 2016). FCUs, by comparison, saw their numbers decline by 109 (3.02%, compared to a 4.1% decline the previous year).

NASCUS compiled the state numbers using both the NCUA year-end report and statistics for privately insured state credit unions (PICUs) from American Share Insurance, Inc. for the fourth quarter, 2017.

“State credit unions continue to display vigorous growth in a recovering economy as they serve more and more consumers,” said NASCUS President and CEO Lucy Ito. “But the state system also recognizes that continued growth and service requires a flexible and responsive regulatory system – a goal the state system works toward every day.”

LINK:
NCUA Releases Q4 2017 Credit Union System Performance Data

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BOARD TO LOOK AT BYLAWS, PROPOSED ‘SUSPENSION’ PROCEDURES

Two action items – including a notice of proposed rulemaking – are on the agenda for the NCUA Board meeting next Thursday. The board will consider an advanced notice of proposed rulemaking on Part 710, Appendix A of Federal Credit Union bylaws, which deals with FCU bylaws. Additionally, the board expects to issue for comment proposed procedures on “suspensions and debarments” during the meeting. The open meeting begins at 10 a.m.; it will be live-streamed (as per usual) on the Internet. Meanwhile, a closed meeting of the board originally also scheduled for Thursday, was changed to Wednesday. No agenda is publicly published, although the board’s notice of the date change indicated the meeting deals with a board appeal, and was closed pursuant to Freedom of Information Act (FOIA) exemption eight, which (according to NCUA) “covers records that are contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of NCUA or any agency responsible for the regulation or supervision of financial institutions.”

LINK:
March 15 NCUA Board open meeting agenda

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COURT TO HEAR SUMMARY JUDGMENT MOTIONS ON FOM LAWSUIT

Summary judgment motions in a bankers’ lawsuit over NCUA’s recent field of membership rule changes for federal credit unions will be heard next week (March 14) by a federal court in Washington. The American Bankers Association (ABA) brought the lawsuit against NCUA over its 2016 changes to FOM regulations (which took effect in February 2017). The rule changes provided more flexibility for federal credit unions in community definitions, eases consumer and small business access to credit unions and facilitates better credit union service to their members.

The lawsuit – brought within two months of the agency issuing final rules — claims that the agency exceeded its authority under the Federal Credit Union Act in how it defines FOM. Both of the national credit union trade associations (Credit Union National Assn. (CUNA) and the National Assn. of Federally-insured Credit Unions (NAFCU), along with CUNA Mutual Group, have filed briefs in support of NCUA.

LINK:
NASCUS summary: Final Rule, NCUA Chartering & FOM Manual

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SENATE DEBATE ON FINANCIAL REG REFORM BILL IN FULL SWING

Senate debate continued as the week came to a close on comprehensive financial regulation reform, including provisions for credit unions. A final vote on S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act (sponsored by Sen. Mike Crapo, R-Idaho), is expected sometime next week.

The legislation would (among other things): give credit unions more flexibility in business lending (by exempting one-to-four unit, non-owner occupied residential loans from a credit union’s member business loan (MBL) cap – essentially treating the credit union loans similar to those made by banks), and; ease Home Mortgage Disclosure Act (HMDA) disclosure requirements (that is, for those that have originated fewer than 500 open-end lines of credit and closed-end mortgages in the previous two years).

Other provisions in the legislation would:

• Provide credit unions with regulatory relief from various Truth in Lending Act (TILA) and TILA/Real Estate Settlement Procedures Act (RESPA) integrated mortgage disclosure rule provisions.
• Require NCUA to annually publish details of and hold a public hearing on its budget.
• Provide immunity to credit unions (and other financial institutions) and individuals from lawsuits for disclosure of financial exploitation of senior citizens.
• Clarify and streamline the process for establishing online banking accounts (such as by recording personal information from, and making a copy of, a driver’s license or personal identification card).

The national credit union trade groups are strongly advocating for the bill, which reportedly has the votes to pass the Senate. Additionally, numerous amendments were being offered by senators throughout Thursday’s session.

The House is expected to take up the bill in short order, and is reportedly planning to amend it with several regulatory relief provisions it has already adopted.

LINK:
S.2155: Economic Growth, Regulatory Relief, and Consumer Protection Act (with latest amendments)

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HOUSE ADOPTS EVEN MORE REG RELIEF MEASURES

Meanwhile, over on the House side of the Capitol, a bill expanding the frequency, scope and coverage of annual regulatory reviews by the federal financial institution regulators (including NCUA) was adopted, as was another measure extending the “qualified mortgage” safe harbor.

Under the Comprehensive Regulatory Review Act (H.R. 4607, adopted by a vote of 264-143), NCUA and other federal financial institution regulators (including CFPB) would be required to conduct comprehensive reviews of all rules every seven years rather than the 10 years now required. The legislation amends the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) to include both NCUA and CFPB for the first time (even though NCUA had been conducting EGRPRA reviews voluntarily). The FDIC, Federal Reserve, and OCC were covered under the law. In addition to the frequency changes, H.R. 4607 (sponsored by Rep. Barry Loudermilk (R-Ga.)) requires the agencies to expand the scope of the regulatory review to include requirements imposed on individual people or on companies that offer consumer financial products or services, and to tailor regulations to reduce the burden on those persons or companies.

Under the Portfolio Lending and Mortgage Access Act (H.R. 2226, sponsored by Rep. Andy Barr, R-Ky.), the Truth in Lending Act (TILA) is amended to extend the “qualified mortgage” safe harbor to loans held in portfolio by some depository institutions with less than $10 billion in assets. Loans eligible for safe harbor treatment cannot have negative amortization or interest-only features, and must to comply with limits on prepayment penalties. The creditor must document and “continually verify a consumer’s income, employment, assets, and credit history,” according to a summary of the bill. The measure passed on voice vote.

LINKS:
Text of H. R. 4607, Comprehensive Regulatory Review Act

Text of H.R. 2226, Portfolio Lending and Mortgage Access Act

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ANOTHER WEEK, ANOTHER RFI: #7 LOOKS AT ‘RULEMAKING PROCESSES’

For the seventh straight week, CFPB issued a “request for information” (RFI) regarding its own processes, inviting public input on the discretionary aspects of the bureau’s rulemaking actions. The RFI – the seventh of an expected 12 to be issued by the bureau — has a 90-day comment period (expected to begin today with publication in the Federal Register).

In the latest in the RFI series (which bureau Acting Director Mick Mulvaney has said is a “call for evidence” to ensure the bureau is “fulfilling its proper and appropriate functions to best protect consumers”) CFPB said it seeks comments in a dozen areas, organized as:

• Initial outreach and information gathering – mechanisms used, convening of review panels representing a cross-section of affected small entities (called SBREFA panels, named for the 1996 Small Business Regulatory Enforcement Fairness Act), consultations with tribal governments.
• Notices of proposed rulemaking – content of notices of proposed rulemaking (NPRM), the bureau’s issuance of the NPRM and supporting materials, comment periods, mechanisms for encouraging additional feedback, processing and posting of comments received, outreach and engagement before and after comment periods, consideration of new data, studies and reports by other agencies or other third parties after an NPRM is released.
• Final rules – content of the notice issuing the final rule, release of the final rule on the bureau’s website before it appears in the Federal Register as well as any supporting materials.

The bureau said it wants comments that address positive and negative aspects of its processes; provide specific suggestions regarding potential updates or modifications to those processes and supporting data regarding potential impacts; and specifics regarding any process aspects that should not be modified.

LINKS:
CFPB Issues Request For Information On Rulemaking Processes

NASCUS CFPB web pages (listings of all RFIs, comments-due dates)

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FINAL RULE OFFERS MORE FLEXIBILITY FOR MORTGAGE SERVICERS

Mortgage servicers would receive more latitude in providing period statements to consumers entering or exiting bankruptcy under a final rule issued Thursday by the CFPB, and which takes effect April 19. The final rule, meant to help mortgage servicers communicate with borrowers facing bankruptcy, follows up on the agency’s 2016 mortgage servicing rule, the bureau said in a release, which requires that servicers send modified periodic statements or coupon books to certain consumers in bankruptcy starting April 19. CFPB also noted that that rule additionally addressed the time for servicers to “transition to providing or ceasing to provide modified periodic statements to consumers entering or exiting bankruptcy.”

However, as CFPB has noted, after the bureau issued the rule two years ago, it became aware of “unintended challenges” caused by “certain technical aspects” of the timing of the transition to the new rule, which could also be subject to different legal interpretations. Consequently, the bureau last October issued a proposed rule to help servicers comply. “Specifically, the final rule provides a clear single-statement exemption for servicers to make the transition, superseding the single-billing-cycle exemption included in the 2016 rule,” the bureau stated in its release.

The effective date for the rule is April 19, 2018, the same date that the other sections of the 2016 rule relating to bankruptcy-specific periodic statements and coupon books become effective.

LINKS:
CFPB Issues Final Rule To Help Mortgage Servicers Communicate With Certain Borrowers Facing Bankruptcy

NASCUS summary: 2016 Mortgage Servicing Rules

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CALENDAR ALERT: APRIL 30 ‘NASCUS 101’ WEBINAR EXPLAINS BENEFITS

So, you belong to NASCUS – what’s in it for you? Find out April 30 during NASCUS 101, our free orientation/onboarding webinar sponsored by your advocate for the state credit union system. Whether you and your organization are new credit union or associate members of NASCUS, or long-time participants, this one-hour webinar is for you. Topics to be covered: who belongs, the NASCUS advocacy agenda, the unique accreditation program, education and training for 2018, NASCUS communications tools and systems, the annual Pierre Jay honors for leadership in the state system – and much more. The program gets underway at 2 p.m. ET. Details about registration, which is required, will be coming soon.