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2014 InfoSight Users' Survey

Your opinion counts-so please take a few minutes to answer our annual users' survey-and help us understand:

  • How you use InfoSight
  • What you like about it
  • What you think could be improved

Past responses have been used to help guide discussions about enhancing InfoSight-and we have implemented some of the changes suggested through the survey.

The survey will be available from now through September 1st.

Click here for the survey or copy and paste the following Web address into your browser:

https://www.surveymonkey.com/s/Y5BJ2JW

We look forward to reading your responses!

 

NCUA Issues Letter 14-CU-08
​Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Period

As home equity lines of credit (HELOCs) approach their end-of-draw period, some borrowers may have difficulty meeting higher payments that result from principal amortization, or in renewing the existing loan.  Changes in financial circumstances and declines in property value may limit options for your members.

The attached interagency guidance encourages credit unions to work with borrowers where possible, consider sound risk management principles, and minimize risk while meeting the needs of your members. 

The risk management principles and approach described in the enclosed guidance can help you identify potential exposures, and guide consistent, effective responses to HELOC borrowers who may be unable to meet their contractual obligations.  The guidance also addresses appropriate accounting and reporting for HELOCs, as well as appropriate practices for identifying and managing associated risks.

Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Period

Source: NCUA


Civil money penalties targeted to 84 late filers

The National Credit Union Administration reports that it has identified possible financial penalties against 84 credit unions under its "zero tolerance" policy for credit unions that filed late first-quarter call reports.

The NCUA has only notified late filers of the penalty that may be assessed, but since the process is not complete, no credit union has been 'fined' at this point, the agency emphasizes.

The Northwest Credit Union Association noted in its June 24 Anthem newsletter that one of the credit unions being notified is in Oregon and four are in Washington. If the five Northwest credit unions sign consent orders, their penalties will range from $243 to $1,900. The league also notes that the steepest penalty of the possible 84 could exceed $10,000 according to the NCUA, should the credit union choose not sign the consent order.

The NCUA told News Now that it soon will be releasing national data related to the civil money penalties.

In May, the NCUA anticipated it would begin the process of assessing civil money penalties from 104 credit unions that filed 2014 first-quarter call reports late (News Now May 23).

The regulator makes exceptions to its "zero tolerance" policy for credit unions able to document certain filing hardships, including a breakdown in the credit union's core operating system, a natural disaster taking place in the credit union's community, or the incapacitation of a key employee who would be responsible for filing the report.

If a credit union encountered a problem and contacted the agency help desk to report an issue with filing the report, the NCUA generally took this into account and waived the penalties, an agency spokesman told the NWCUA.

Any fines collected by the NCUA will be remitted to the U.S. Treasury Department and do not supplement the agency budget.

The NWCUA says it is asking the NCUA to better to address issues with online filing.

"We're asking the NCUA to remind credit unions a couple of days before the reports are due that the filing deadline is approaching," said John Trull, director of the regulatory advocacy. "Furthermore, we are advocating for technical improvements to the system that would notify credit unions immediately upon hitting the submit button if there is an issue, or to confirm the report was received."

If credit unions provide evidence of previous on-time filing, Trull noted, they may be able to appeal the fine with the NCUA's Office of Examination and Insurance. If the cost of the fine would materially harm the financial health of the credit union, Trull said, that would be another circumstance for the regulator to consider.

Since January, an NCUA spokesman noted, credit unions were notified many times of the policy, and warning letters were sent to credit unions that filed their December 2013 reports late. The regulator also posted articles in the NCUA Report.

Overall, the zero tolerance policy is close to having its intended effect, with 98.4% of credit unions filing on time--the highest percentage since online filing began, according to the NCUA.

Source: CUNA News Now


GAO: Virtual currencies raise consumer, investor protection issues

Virtual currencies, while heralded by some as part of an innovative new financial system, bring with them a host of challenges and risks to financial institutions, consumers and law enforcement. The U.S. Government Accountability Office (GAO) has released a report on virtual currencies, outlining several of these issues, and urging the Consumer Financial Protection Bureau to take an active role in facing consumer issues that might arise with its use.

Virtual currencies are digital representations of value that are not government-issued, and systems operate over the Internet and use computer protocols and encryption to conduct and verify transactions. Some can be used to buy real goods and services and exchanged for dollars or other currencies.

But these currencies have also been associated with illicit activity and security breaches, which raises possible regulatory, law enforcement, and consumer protection issues.

Several of the main issues outlined in the June 26 GAO report are:

  • Virtual currency systems may provide anonymity over traditional payment systems and can lack a central intermediary to maintain transaction information. This can lead to difficulties in detecting money laundering and other crimes;
  • Many virtual currency systems can be accessed globally to make payments and transfer funds across borders. Consequently, law enforcement agencies investigating crimes that involving these currencies have to rely upon cooperation from international partners who may operate under different regulatory and legal principles; and
  • The emergence of virtual currencies has raised a number of consumer and investor protection issues, including: reported loss of consumer funds maintained by bitcoin (one type of virtual currency) exchanges, volatility in bitcoin prices, and the development of virtual-currency-based investment products. For example, in February a Tokyo-based bitcoin exchange filed for bankruptcy after reporting it had lost more than $460 million.

The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) released guidance in March 2013 requiring virtual currency exchanges to register with FinCEN. Federal agencies also have begun to collaborate on virtual currency issues through informal discussions and interagency working groups.

These working groups have focused on law enforcement aspects of virtual currencies, but not on emerging consumer protection issues. The GAO report states that the CFPB has "generally not participated" in these groups.

"Therefore, interagency efforts related to virtual currencies may not be consistent with key practices that can benefit interagency collaboration, such as including all relevant participants to ensure they contribute to the outcomes of the effort. As a result, future interagency efforts may not be in a position to address consumer risks associated with virtual currencies in the most timely and effective manner," the report reads.

The GAO recommended that the CFPB "take steps to identify and participate in pertinent interagency working groups addressing virtual currencies, in coordination with other participating agencies."

According to the report, the CFPB has agreed with this recommendation.

GAO Virtual Currencies Report (PDF)

Source: CUNA News Now


CUs among FIs with increased cybersecurity assessments

While data breaches at retailers have made headlines recently, financial institutions of all sizes are vulnerable to cyber-attacks. With that in mind, the Federal Financial Institutions Examinations Council (FFIEC) has launched a pilot program to assess 500 financial institutions' supervisory policies and processes when it comes to cybersecurity.

The assessments will be used to develop a preliminary assessment of how community financial institutions manage cybersecurity, said National Credit Union Administration spokesman John Fairbanks. Credit unions represent about half of the institutions being examined. These credit unions range from small to very large asset sizes.

"This pilot is one of several FFIEC assessments that will ultimately benefit community financial institutions by assisting regulators in strengthening and standardizing our supervisory programs and being responsive to industry requests for supervisory guidance," Fairbanks said. "The assessments under the FFIEC pilot program are being done during the normal exam cycle using existing rules and regulations."

Should the assessments lead the NCUA to identify policies and procedures that do not meet legal requirements or supervisory expectation, the institution will be notified and concerns will be handled as they would normally be during a standard exam.

In announcing the pilot program in May, the FFIEC said its members want to provide additional support to community banks, which may not have access to the resources available to larger institutions.

NCUA Chair Debbie Matz recalled one incident in her February address at the Credit Union National Association's Governmental Affairs Conference in which hackers broke into a medium-sized credit union and used that credit union's passwords to access a large credit bureau, allowing them to steal credit reports from hundreds of consumers.

"These attacks are like poison-tipped darts. Where they hit doesn't matter. Once that poison hits your bloodstream, it moves quickly through the system," she said.

The FFIEC, which in addition to the NCUA counts as its members the Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Federal Reserve Board and a liaison committee of state regulators, has said that the pilot program will not result in any new examination rating.

Source: CUNA News Now


Treasury reaches largest ever sanctions-related settlement

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has announced its largest settlement to date--a $963 million agreement with BNP Paribas SA (BNPP) to settle its potential liability for apparent violations of U.S. sanctions regulations.

In an announcement of this week's settlement, Treasury said the agreement resolves an investigation into BNPP's "systemic practice of concealing, removing, omitting, or obscuring references to information about U.S.-sanctioned parties in 3,897 financial and trade transactions routed to or through banks in the United States between 2005 and 2012" in apparent violation of a series of regulations.

"Today's settlement is OFAC's largest-ever and reaffirms OFAC's determination to aggressively enforce U.S. sanctions rules and regulations," said OFAC Director Adam J. Szubin in a release.  "The settlement is the result of an interagency effort to investigate institutions that abuse the U.S. financial system and undermine U.S. sanctions programs. OFAC will continue to coordinate these efforts with other federal and state agencies in order to protect the U.S. financial infrastructure from the risks inherent in this type of illicit activity."

Under the settlement agreement, BNPP is required to put in place and maintain policies and procedures to minimize the risk of the recurrence of such conduct in the future.

Treasury's Release on BNPP Settlement

Source: CUNA News Now


Canadian anti-spam law addresses commercial e-mails

Canada's anti-spam law took effect Tuesday, and while the statute is a Canadian law, it affects any commercial electronic message (CEM) sent to Canadian recipients. A CEM can be defined as any electronic message sent with the purpose of encouraging participation in a commercial activity.

Valerie Moss, senior director of compliance analysis for regulatory affairs for the Credit Union National Association, writes on CUNA's CompBlog that a CEM can include e-mails, text messages and some social media messaging.

"We have been asked whether Canada's new anti-spam requirements will affect U.S. credit unions that send marketing messages to members who reside in Canada. The answer appears to be yes," she wrote. However, there is a grandfather clause for existing credit union members and a safe harbor for emails that comply with the U.S. CAN-SPAM Act that should help limit compliance burdens on U.S. credit unions.

Moss lists three general requirements for sending a CEM to an electronic address (defined as an email account, a telephone account, an instant messaging account and any other similar account) in Canada: the recipient's consent to receive CEMs; the sender's identification and contact information; and an unsubscribe mechanism that can be "readily performed."

Consent to send CEMs is implied for a period of at least 36 months following the law's implementation where there has previously been an existing business relationship.

Significantly for credit unions, the "implied consent" period likely extends beyond 36 months in the case of a person who is a member of the credit union on July 1, 2014, until he or she leaves the credit union's membership, because the existing business relationship remains continuous so long as the member maintains his or her membership share.

The law also contains a safe harbor if the sender is located outside of Canada, the sender reasonably believed that the recipient would access the commercial electronic message outside of Canada in a jurisdiction on the ECPR List of Foreign States schedule, which includes the United States, and the CEM was in compliance with that jurisdiction's "substantially similar" anti-spam law,  that is, the CAN-SPAM Act in the case of a U.S. credit union.

The law and its implementing regulations generally prohibit:

  • Sending of commercial electronic messages without the recipient's consent;
  • Alteration of transmission data in an electronic message resulting in the message being delivered to a different destination without consent;
  • Installation of computer programs without the express consent of the owner of the computer system or its agent;
  • Use of false or misleading representations while promoting products or services;
  • Collection of personal information through accessing a computer in violation of Canadian law; and
  • Collection of electronic addresses by the use of computer programs or the use of such addresses, without permission.

Use the link below to access CUNA's CompBlog entry on the new law.

Also, the World Council of Credit Unions has produced an extensive summary of Canada's Anti-Spam Legislation (CASL) for non-Canadian credit unions. Use the resource link for access.

CUNA Comp Blog: Canada’s Anti-Spam Law (members only)

World Council CASL Summary

Source: CUNA News Now

 

CUNA Seeks Feedback on NCUA Appraisals Proposal
CUNA seeks feedback from credit unions to our Regulatory Call to Action through August 18, on NCUA’s recent proposed rule regarding appraisals and the availability to applicants and requirements for transactions involving an existing extension of credit. The proposed rule would eliminate the duplicative requirement that federal credit unions (FCUs) make available, to any requesting member/applicant, a copy of an appraisal used in connection with that member’s application for a loan secured by a first lien on a dwelling. The proposal would narrow the scope of this requirement to cover only loans secured by a subordinate lien on a dwelling. FCUs would still be subject to the CFPB’s Reg B requirement that all creditors must automatically provide applicants with free copies of all appraisals and other written evaluations. Additionally, the proposal would require that the appraisal be available for a period of 25 months after the applicant has received notice from the FCU of the action taken by the credit union on the application for a loan secured by a subordinate lien on a dwelling.

The proposed rule would also amend NCUA’s regulations to exempt transactions that involve an existing extension of credit at the lending federally-insured credit union, provided that: (1) there is no advancement of new monies, other than funds necessary to cover reasonable closing costs; or (2) there has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the credit union’s real estate collateral protection after the transaction, even with the advancement of new monies. Further, the proposed rule would align NCUA’s definition of “application” with the CFPB’s definition under Reg B

InfoSight
Compliance eNEWSLETTER

July 18, 2014
Vol. 8, Issue 27

Created in partnership with the

Credit Union National Association

CU Compliance Connection: CFPB Integrated Mortgage Disclosures
The CFPB has finally released the Integrated Mortgage Disclosure requirements that have been in the works for over two years. For a review of the disclosures requirements please attend this CU Compliance Connection presentation.

Click here for the video.

July, 2014 September, 2014 October, 2014 November, 2014
  • November 2nd, 2014: Daylight Savings Time Ends
  • November 11th, 2014: Veterans' Day - Federal Holiday
  • November 27th, 2014: Thanksgiving Day - Federal Holiday
December, 2014

CUNA

August 10 – 14
CUNA Lending Compliance School, Las Vegas, NV

September 14 – 19
CUNA Regulatory Compliance School, Chicago, IL 

October 19 – 22
CUNA Attorney's Conference, Dana Point, CA

October 26 - 29
CUNA Bank Secrecy Act Conference
, Las Vegas, NV

CUNA Webinars
CUNA offers hundreds of online training events that make it easy for you to learn right at your desk. Whether you are looking for a beginner course or want a comprehensive understanding on a specific topic, CUNA webinars, audio conferences and eSchools have what you need. Click here for updates on compliance, operations, lending topics and more!

CUNA Marketing Compliance eSchool (07-18-14)

3rd Party Vendors and Regulatory Compliance Demands webinar (07-17-14)

Overview of the CFPB webinar (07-15-14)

Garnishments-Levies webinar (07-17-14)

Consumer Lending Update and Fair Lending webinar (07-22-14)

Mortgage Lending Update webinar (07-19-14)

CUNA Lending Compliance School (08-10-14)

Bargaining with the Devil – Understanding Vendor Contracts webinar (08-11-14)

Money, Attitudes and Roles webinar (08-12-2014)

CUNA Succeeding in Member Sales eSchool (08-13-2014)

Developing Outstanding Member Service webinar (08-13-2014)

Understanding and Improving Cash Flow webinar (08-19-2014)

Inquiring and Listening for Member Needs webinar (08-20-2014)

MIP and Account Openings webinar (08-21-2014)

Money Mission Demo - Online Financial Literacy Game webinar (08-25-2014)

From Budget Analysis to Spending Plan webinar (08-26-2014)

Linking Member Needs to Credit Union Service webinar (08-27-2014)

CUNA Financial Management eSchool - Part 1 (2014) (08-28-2014)

Introduction to Financial Ratios webinar (2014) (08-28-2014)

Improving Credit and Correcting Errors on Credit Reports webinar(09-02-2014)

Closing Member Sales with Confidence webinar (09-03-2014)

Introduction to Asset-Liability Management webinar (2014) (09-04-2014)

Helping Your Members Understand Their Rights on Repossessions, Foreclosures and Bankruptcies webinar (09-09-2014)

Introduction to Financial Management Analysis and Problem Solving webinar (2014) (09-11-2014)

The Counseling Relationship webinar (09-16-2014)

Introduction to Balance Sheet Earnings webinar (2014) (09-18-2014)

The Counseling Process webinar (09-23-2014)

Introduction to Investments webinar (2014) (09-25-2014)

Money Mission Demo - Online Financial Literacy Game webinar (09-29-2014)

CUNA Lending Compliance eSchool (09-29-2014)