Metsger Expects Stability at NCUA as Trump Takes Office
As the NCUA board prepares for its last meeting during the Obama Administration, Chairman Rick Metsger said Thursday he does not expect any great change in policy direction in the near future.
The NCUA board meets Jan. 19 and has two items on its agenda – an advanced notice of rulemaking dealing with alternative capital and a briefing on inflation adjustment of civil money penalties.
As he takes office, President-elect Donald Trump may designate a board member belonging to his own party as chairman. The board currently has two members – Metsger and Republican J. Mark McWatters, a Republican. The board has a vacancy and speculation has centered on McWatters becoming chairman after Trump is sworn in.
“I don’t envision any major policy change as far as the board goes in the near future,” Metsger said at the Western States Summit Roundtable, according to a transcript of his remarks.
President-elect Trump appoints two people to his NCUA landing team.
Metsger said he and McWatters have developed a strong working relationship and he expects for that to continue.
“It still takes two to tango, and regardless of who has the gavel, our commitment to working together on behalf of a sound and progressive credit union system remains the same,” he said.
At the Jan. 19 meeting, the board will consider soliciting comments on alternative capital before issuing proposed rules. The proposal would govern both secondary capital and supplemental capital; the board has been considering the issue for quite some time.
In late 2014, then-Chairman Debbie Matz announced a working group on supplemental capital.
The board adopted a risk-based capital final rule in October 2015, but delayed action on supplemental capital. At its October 2016 meeting, the board received a staff briefing on supplemental capital. NCUA staff members said at the time that including supplemental capital in the calculation for the risk-based capital rules poses legal and regulatory questions for federally-insured credit unions.
In his Thursday discussion, Metsger said that as the credit union system consolidates, the NCUA must respond. He said, for example, he has asked NCUA staff to evaluate whether the office space for NCUA Region II are still needed, since they are located in Alexandria, Va. – the same city as the NCUA’s headquarters.
Metsger also said that in the coming months, the NCUA will unveil a new web-based tracking tool that will allow credit unions to monitor the status of field of membership applications.
He also questioned whether a five-region NCUA structure and a separate Office of National Examinations and Supervision for the largest credit unions are still needed.
“Are all five current regions needed if an increasing proportion of credit union assets are supervised and examined by the Office of National Examinations and Supervision?” he asked. “Would a four- or even three-region network design be more efficient and effective in the coming years?”
Metsger also said that the NCUA must remain adaptable to ensure that non-traditional, web-based service providers are held to the same consumer protection standards as traditional service providers.
Source: CU Times
Leagues Continue to Seek Expanded Powers and Protections for Credit Unions
This week, 36 states were in session and legislation was introduced that would expand both powers and protections for credit unions.
In Oregon, H 2161 would empower credit unions by permitting amendments to articles of incorporation and bylaws to become automatically effective unless disapproved by the state regulator. If enacted, the bill also authorizes credit unions to expel members who create undue risk of loss. The measure further eliminates the requirement that boards of directors meet at least 10 times per calendar year and authorizes the regulator to establish rules regarding meeting frequency.
A data security measure, H 2581, was introduced in Oregon as well. If enacted, in situations where retailer negligence causes breaches, they can be held liable to financial institutions for the costs associated with the breaches. Institutions could recover the costs for reissuing cards, stopping payments, closing accounts and notifying customers. The bill further directs state regulators to adopt security standards consistent with the Payment Card Industry Data Security Standards (“PCI DSS”), which are technical and business process requirements developed by the credit card industry to enhance payment card data security.
Texas took steps to permit credit unions to conduct prize-linked savings programs with the introduction of the Texas Savings Promotion Act, H 471. The legislation authorizes credit unions to hold the raffles and outlines their parameters. Last session, the Governor vetoed a prize-linked savings bill, noting that an amendment to the Texas Constitution is required for the programs to be legally conducted. As such, TX HJR 37 was introduced. The bill would amend the Lotteries and Gaming Enterprises; Bingo Games section of the Texas Constitution to permit lawmakers to authorize “promotional activities to promote savings.”
Like their colleagues in Texas, Delaware lawmakers are also considering legislation, H 31, that would permit credit unions to conduct prize-linked savings programs.
Bills impacting credit unions were introduced in New York. One measure, A 410, would require credit unions to have a notary public available during business hours and another, A 472, would bar financial institutions, including credit unions, from retaliating against employees.
Indiana lawmakers are exploring a bill that would prevent the public from being misled and protect the reputation of credit unions and other cooperatives. Under H 1236, businesses that are not cooperatives or mutual organizations would be prohibited from using the terms cooperative, co-op, or mutual in their names or marketing materials.
Source: CUNA Removing Barriers Blog
CFPB - CUAC and CAB Application Process
The CFPB will be seeking applicants for the Credit Union Advisory Council (CUAC) and the Consumer Advisory Board (CAB) starting January 16, 2017. To serve on CUAC you must be a current employee of a credit union with total assets of $10 Billion or less. If you are at a larger credit union or a credit union volunteer, advocate, or supporter you may want to consider applying to serve on the CAB, which also discusses many relevant issues to credit unions and members.
The complete application packets must be submitted by March 1, 2017. A live link will be available when the application period begins. The CAB has seven open seats and the CUAC has six open seats.
Even if you have applied in the past and were not selected, we would encourage you to apply again if you are interested. Particularly, with the potential changes at the CFPB over the next few months and an updated rulemaking agenda, the CFPB may be seeking different expertise/geographic locations/memberships from year-to-year
Click here to read more.
Source: CUNA Compliance Blog
Do Not Fire CFPB's Cordray, Dems Warn Trump
Senate Democratic Leader Chuck Schumer (D-N.Y.) delivered a stern message to President-elect Donald Trump today—“Do not tell Richard Cordray he’s fired.”
Schumer joined Sen. Sherrod Brown (D-Ohio) and Elizabeth Warren (D-Mass.) on a conference call with reporters to defend the embattled CFPB director.
Several Republicans have called on Cordray’s removal as Trump takes office.
And last week, Trump met with former Rep. Randy Neugebauer (R-Texas), who reportedly is under consideration as a possible Cordray replacement.
Trump appoints an outspoken critic of the CFPB as Sen. Warren fights to save the agency.
Schumer said Neugebauer, a longtime critic of the CFPB, would not be acceptable as a replacement. He contended that as chairman of the House Financial Institutions subcommittee, Neugebauer was a defender of the payday loan industry.
“That’s like putting the biggest arsonist in the firehouse,” he said.
Warren said the CFPB is working on rules governing arbitration agreements, payday loans and debt collection. She accused businesses involved with those activities of actively lobbying for Cordray’s removal.
The senators said that converting the agency into a five-member commission would not be acceptable to Democrats.
Two Republican Sens.—Ben Hasse of Nebraska and Mike Lee of Utah—have called on Trump to fire Cordray. However, Senate Banking Chairman Mike Crapo (R-Id.) declined to support that effort, simply saying that Cordray should quit so Trump can appoint his own director.
To make matters even more uncertain, Trump’s ability to simply fire Cordray is hung up in federal court.
Currently, Cordray may only be fired for cause, Warren said, adding that no federal agency head has been removed for cause for more than a century.
A panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled that the structure of the agency is unconstitutional since it is governed by a single director who can only be removed for cause. The panel said that the president has the power to fire the director for any reason, but has stayed its order.
The ruling came in a case in which PHH, a mortgage lender, was the subject of $109 million penalty from the CFPB. A panel of appellate court judges voided that penalty and sent the case back to a lower court for review.
The CFPB and the Obama Administration have asked that the full D.C. Circuit Court of Appeals consider the case.
And last week, the appellate court gave PHH until Jan. 27 to file a supplemental brief—effectively ensuring that there will not be a ruling before Trump takes office.
Brown said that Trump voters supported the President-elect because they believe the financial system is unfair.
“The people who voted for Trump believe the system was rigged,” he said, adding that Trump should support Cordray who, he added, has been fighting that system.
Source: CU Times
CUNA Advocacy Update
The CUNA Advocacy Update is published at the beginning of every week and keeps you on top of the most important changes in Washington for credit unions--and what CUNA is doing to monitor, analyze, and influence government agencies and federal law. Additional Advocacy efforts may also be found under CUNA’s Removing Barriers blog.
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