Agencies Clarify Financial Supervisory, Enforcement Responsibilities
NCUA, the Consumer Financial Protection Bureau (CFPB), and federal banking regulators issued a policy statement addressing how they would measure total assets of an insured credit union, bank, or thrift for purposes of determining supervisory and enforcement responsibilities under the Dodd-Frank Act.
Under Section 1025 of Dodd-Frank, the CFPB has exclusive authority to examine for compliance with federal consumer financial laws and primary authority to enforce those laws for institutions with total assets of more than $10 billion and their affiliates. NCUA and the federal banking regulators retain supervisory and enforcement authority for institutions with total assets of $10 billion or less.
The policy statement explains that a common measure of the asset size of an insured depository institution is the total assets reported in the quarterly Reports of Condition and Income (Call Reports), which credit unions, banks, and thrifts are required to file. After an initial asset size determination based on June 30, 2011, data, an institution generally won’t be reclassified unless four consecutive quarterly reports indicate that a change in supervisor is warranted.
NCUA Issues Final Rule on Remittance Transfers
NCUA amended Section 701.30 (“Services for nonmembers within the field of membership”) to add “remittances” as another example of money transfer instruments federal credit unions may provide to nonmembers within their fields of membership (FOM).
Since 2006, federal credit unions have had the authority to provide certain financial services to all persons within their FOM, for example, negotiable checks, money orders, and other similar transfer instruments.
The Dodd-Frank Act added a new section to the Electronic Fund Transfers Act creating protections for consumers who send money to foreign countries through remittance transfer providers. The law also amended the Federal Credit Union Act. NCUA’s regulation follows the Dodd-Frank Act’s statutory language and allows federal credit unions to offer variations of remittance transfers to members and those within their FOM, subject to consumer protections. But this just clarifies the rule. Federal credit unions already could offer these transfers to members and persons within the FOM.
HUD Proposes FHA Discriminatory Effects Standard
The Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status, or national origin.
The act prohibits housing practices that intentionally discriminate on a prohibited basis and seemingly neutral housing practices that result in a “discriminatory effect” on a group of people (disparate impact) or on an entire community (perpetuation of segregation).
Although some variation in the application of the “discriminatory effects standard” exists, neither Department of Housing and Urban Development (HUD) nor any federal court has ever determined that liability under the act requires a finding of discriminatory intent. So HUD proposed a rule that would establish uniform standards to determine when a housing practice with a discriminatory effect violates the Fair Housing Act. Comments on the proposal are
due by Jan. 17, 2012.
Comment on Private Ed Loans
The Consumer Financial Protection Bureau (CFPB) is requesting comments from the public on private education loans. Comments are due by Jan. 17, 2012.
Section 1077 of the Dodd-Frank Act required the CFPB and the Education Department, in consultation with the Justice Department and the Federal Trade Commission, to prepare a report on private education loans and private education lenders. The bureau wants information on private education loans and related consumer financial products and services currently offered to or used by students and their families for postsecondary education financing.
The CFPB wants to hear from anyone who has anything to do with private student loans—students, families, school counselors, lenders, and servicers—and is looking for information on how students shop for loans, financial education, repayment experiences, etc. Visit consumerfinance.gov for more details.
Training Calendar 2012
Visit cuna.org for program and registration details.
Q How long do we have to respond to a member’s request to revoke his opt-in to the credit union’s ATM/debit card overdraft service?
A The Reg E opt-in is effective until the member revokes his consent or the credit union terminates the overdraft service for ATM and one-time debit card transactions. There’s no specific period of time for the credit union to honor the member’s revocation request. Reg E requires the credit union to implement the member’s revocation “as soon as reasonably practicable.” This may vary depending on how the member communicates the revocation request (e.g., in writing or orally) and through which channel—for example, a written request sent to an address specifically designated to receive consumer opt-in and revocation requests.