Equal Credit Opportunity Act (ECOA)

The Consumer Financial Protection Board’s (CFPB) Regulation B (Reg B) implements the provisions of the Equal Credit Opportunity Act (ECOA) which was enacted by Congress in 1974 to prevent discrimination on the basis of sex or marital status in any aspect of a credit transaction. Subsequent amendments extended the Act's prohibition of discrimination in credit transactions on the basis of race, color, religion, national origin, age (provided the applicant has the capacity to contract), receipt of part or all of one's income from a public assistance program, and good faith exercise of rights under the Consumer Protection Act of 1968.

Key points of the act:
The Act prohibits discrimination in taking and analysis of credit applications and provides specific guidelines in the taking of credit applications.

  • Applications should avoid inquiries about race, color, religion, sex and national origin (except for loans to purchase or refinance the applicant's principal dwelling, including mobile homes and condos, the lender is required to take the application in writing and request the following information: race or national origin, sex, marital status, and age.)
  • Credit unions are prohibited from making any statements that would discourage applicants from applying for a loan.
  • Credit unions are not allowed to inquire about the gender of the applicant. Applications should be neutral as to the gender of the applicant.
  • Credit unions are allowed to inquire about marital status only by the terms married, unmarried, and separated. Applications for individual, unsecured credit should inquire about marital status only where the applicant resides in a community property state.
  • Questions concerning dependent related financial obligations should be neutral as to the applicant's sex, marital status, or other prohibited basis.
  • Questions on spouses must be limited to whether the spouse will use the account or be liable on it; whether spousal income or support payments will be relied on for repayment; or if the applicant resides in a community property state or is relying on property in a community property state to repay the loan.

For additional information, click here for the topic.

Review the information today to help your credit union remain in compliance.


Bureau Reopens Comment Period On Servicing Proposal

The Consumer Financial Protection Bureau has published in the 4/26/16 Federal Register a notice that it is reopening the comment period for a specific aspect of the proposed rule published by the Bureau in the Federal Register on December 15, 2014. The 2014 proposal included amendments to certain mortgage servicing provisions in Regulation X and Regulation Z. Among other things, the proposed rule: addressed requiring servicers to provide modified periodic statements under Regulation Z to consumers who have filed for bankruptcy, subject to certain exceptions; included related proposed sample periodic statement forms; and indicated that the Bureau intended to conduct consumer testing of the proposed sample forms and would publish and seek comment on a report summarizing the methods and results of such testing prior to finalizing any sample forms. The original comment period to the proposed rule closed on March 16, 2015. The Bureau now reopens the comment period until May 26, 2016, to seek comment specifically on the report summarizing consumer testing of sample periodic statement forms for consumers in bankruptcy. The report had not yet been posted to the Bureau's website at the time of this writing. It will be added to the Research and Reports page, at http://www.consumerfinance.gov/data-research/research-reports/.

Lawsuit Mill Shut Down and Pays $2.5 Million In CMPs

The CFPB has announced the issuance of consent orders to the debt collection law firm Pressler & Pressler, LLP, two of its principal partners, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence, and to pay a total of $2.5 million in civil money penalties.

Source:  CFPB

Same-Day ACH May Change Credit Unions

(From Credit Union Times, 4/25/16)  The advent of same-day ACH this fall will likely mean credit unions and other financial institutions will encounter more fraud, more strain on their budgets and more operational challenges, according to a new survey by the New York City-based software firm NICE Actimize.

A whopping 93% of financial institutions said they think same-day ACH will increase fraud threats, but more than half (54%) said they don’t have the appropriate fraud tools to handle same-day ACH transactions, according to the survey of some 60 financial institutions this spring. Despite their lack of fraud tools, 48% of respondents said they plan to originate same-day ACH credits and 43% said they’ll originate same-day ACH debits. Another 35% were unsure, and 16% said they’ll do neither.

“We know from other markets, such as the U.K., that the launch of faster payments is aligned with an uptick in fraud attacks and losses,” NICE Actimize Vice President/General Manager of Fraud & Cybercrime Management Solutions Erez Zohar said. “This means that U.S. financial institutions need to be prepared with fraud strategies on day one.”

Same-day payroll and account-to-account transfers could become hot spots for fraud; fraudsters could also use social engineering to target companies that initiate same-day payroll, Zohar added.

On May 19, 2015, the Electronic Payments Association gave the green light on same-day ACH, which will increase the movement of funds between financial institutions from once a day to three times per day. The new rules, which are largely based on rules proposed in late 2014, take effect in three phases beginning Sep. 23, 2016. Among other things, they require all receiving depository financial institutions to accept same-day transactions and require originating depository financial institutions to pay a $0.052 fee per transaction.

For more on this topic, click here.


CU Advocacy This Week

The National Credit Union Administration Board held its fourth open meeting of 2016 at the agency's headquarters here on 4/21/16 and approved two items:

  • A proposed rule to provide regulatory relief to federal credit unions by eliminating the full occupancy requirement in the current occupancy rule.
  • A proposed joint agency rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act to regulate in federally insured credit unions with assets of $1 billion or greater incentive-based compensation plans that encourage inappropriate risk-taking

To comment on each of these proposed rules and to read more about them, visit the NCUA site.

Also included in the Board meeting was an update on the NCUA Share Insurance Fund, which can be found on the same page.

All open NCUA Board meetings are tweeted live. Follow @TheNCUA on Twitter. Board Action Memorandums are available online at www.ncua.gov under About NCUA/NCUA Board Actions/Draft Board Actions. NCUA rule changes are posted online at www.ncua.gov under Regulatory, Publications, and Reports/NCUA Regulations/Recent Final Rules. 

Source:  NCUA

Senate Finance Committee Passes Bills Curbing Identity Theft and Tax Refund Fraud

The Senate Finance Committee passed two bipartisan bills aimed at curbing identity theft and tax refund fraud, as well as legislation designed to protect taxpayers.  By voice vote, the Committee passed the Taxpayer Protection Act of 2016.  This legislation includes many provisions, but two of interest to state-chartered credit unions (SCUs).
All SCUs are required to annually submit a Form 990 to the Internal Revenue Service (IRS).  The bill passed yesterday, if enacted into law, will require all SCUs to file the IRS Form 990 electronically.  Currently, only state chartered CUs that file at least 250 returns (IRS Forms W-2, 1099, etc.) during the calendar year and with total assets of $10 million or more must file electronically.  This will be a new burden on SCUs that currently file their Form 990s by other means, mostly notably through paper forms.  The amount of money the IRS will raise from this provision is literally “negligible” according to the nonpartisan Joint Committee on Taxation.
However, another provision was added to the bill that aids tax-exempt entities that are required to file Form 990s.  Currently, if such an organization, including SCUs, fails to file a Form 990-series return or notice for three consecutive years, that organization’s tax-exempt status is automatically revoked.  To regain their tax-exempt status, the organization must reapply to the IRS for such recognition.  This is a process that no credit union wants to endure.  However, this legislation would require the IRS to provide notice to an organization that fails to file a Form 990-series return or notice for two consecutive years not later than 270 days after the date of the second failure.  The notice must contain information about how to comply with the annual information return and notice requirements.
We will continue our dialogue with Hill lawmakers on increasing tax compliance without adding unfair burdens on the credit union movement.

(Posted April 21, 2016 by CUNA Advocacy)

CUNA Advocacy Update

The Regulatory Advocacy Report is now combined with CUNA’s Legislative Update into a comprehensive CUNA Advocacy Update. The new Advocacy Update is published at the beginning of every week, is accessible here 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.

Prior CUNA Regulatory Advocacy Reports have been archived and are available here

FREE Webinars on ComplySight, the League's latest compliance resource

Registration is now open for your front row seat to learn about ComplySight, the league's newest addition to your compliance toolbox. If you're looking for a solution to the compliance tidal wave, this system is for you!

For “live” webinars, click on the DATE of the webinar to sign up and obtain registration instructions. This should be done at least 15 minutes prior to the start of the webinar to allow for registration to be accepted and login instructions received.  Please note that all of the webinars require a password, which is “1234.”  The times listed are in the Eastern Time Zone.

For “recorded” webinars, click on the title of the webinar to listen.  Users may be asked to download WebEx, which is a safe download for viewing the webinars.  These are also available on the Dashboard in ComplySight and are available 24/7! 


Introduction to ComplySight

Designed to introduce and show the many features and benefits of ComplySight.

May 18, 2016 ♦ (Wednesday)  ♦ 590 423 639  ♦ 3:30pm – 4:30pm (ET)

ComplySight Training & Tips – Reports in ComplySight

An opportunity to review specific ComplySight topics in detail. Topics change so users can continue to learn additional ComplySight functionality. Come with questions!       

May 11, 2016  ♦ (Wednesday)  ♦ 595 326 929  ♦ 3:30pm – 4:30pm (ET)



New Recorded Webinar! 

ComplySight Training & Tips Regulatory Alerts, Assigning Employees, Preview of L2.5, Tools in the Help Area
What should be done when you get an email about a Regulatory Alert?  Where are “old” Regulatory Alerts? How do I assign an employee to an Area, and what will be different with the upcoming Level 2.5?  And – what tools are available in the Help area?  This webinar will explore all of this – and more!

Introduction to ComplySight
Designed to introduce and show the many features and benefits of ComplySight.

ComplySight Training & TipsWhere to Start?
This webinar will: suggest a starting point as a new ComplySight user, discuss how Factor Grading works, review the Action Item Build/Edit process, and discuss the need for a compliance management tool that regulators - and you - will appreciate.

ComplySight Training & TipsHow to Export Data
When you need to archive or copy data out of ComplySight for a fresh start or to provide information for a Board meeting, this webinar will explain the process.

Compliance eNEWSLETTER

April 26, 2016
Vol. 10, Issue 17

Created in partnership with the

Credit Union National Association

CU Compliance Connection

In this newly released video, Glory LeDu, Manager of League System Relations, discusses the Compliance outlook for the 1st quarter of 2016 and gives us a review of the 4th quarter of 2015. View the CUBE TV video here.

May, 2016
  • May 30th, 2016: Memorial Day - Federal Holiday
June, 2016 July, 2016 September, 2016
  • September 5th, 2016: Labor Day - Federal Holiday
October, 2016 November, 2016
  • November 6th, 2016: Daylight Savings Time Ends
  • November 11th, 2016: Veterans' Day - Federal Holiday
  • November 24th, 2016: Thanksgiving Day - Federal Holiday


CUNA offers hundreds of online training events that make it easy for you to learn right at your desk. Click here for updates on compliance, operations, lending topics and more!