If you remember last summer, NCUA’s Office of Consumer Protection notified over 1000 federal credit unions across the country of their eligibility for low income designation. NCUA’s initiative was in part due to President Obama’s relief and recovery package to help drought stricken states across the country. Many of you accepted the designation; however, do you truly understand the grant opportunities available as a low income designated credit union?
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Last week we released our quarterly update to PolicyAid, our online policy solution. We included a new Fair Lending Policy to assist both federal and state chartered credit unions with their fair lending program. This new policy was developed in light of NCUA’s recently published Fair Lending Guide. In addition, we’ve updated a few of our existing policies based on final rules. Our April updates include the following:
- Fair Lending Policy (New)
- Electronic Funds Transfer Policy (Updated)
- Investment Policy (Updated)
- Servicemembers Civil Relief Act and Permanent Change of Station Policy (Updated)
- Real Estate Lending Policy (Updated)
If you aren’t already a subscriber…. check us out. We offer an annual subscription to a library of over 70 policies and counting for a mere $299. If you are tired of spending countless hours just staring at a blank piece of paper trying to get started, subscribe today and let us help you save time and energy. Our policies are in word document format and can easily be downloaded and customized to fit your credit union’s needs. For questions please contact us at firstname.lastname@example.org or 1-855-341-4643.
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On Friday April 12th the CFPB issued proposed clarifications to the escrow rule. Last friday, they issued proposed clarifications to the Ability to Repay / QM Rule and the Mortgage Servicing Rule.
You are probably thinking “oh no! It’s the remittance transfer rule all over again! Why can’t they get it right the first time!” Given how many times the CFPB revisited the remittance transfer rule, such thoughts are certainly warranted. On the first read, however, the ‘clarifications’ issued on the escrow, ability to repay, and mortgage servicing rules appear to actually be clarifications, and not substantive changes to the rule. In my mind, the more commentary and explanatory examples the better. Furthermore, after a rule is issued, and even after the rule is effective, there is no reason to cease providing such commentary as issues not currently addressed in the commentary arise. Thus far, the CFPB seems to share these thoughts. In following the CFPB’s rulemaking process, you should pay attention not only to the actual rule and guidance, but also to the CFPB’s approach. The CFPB is very different from other regulators. By noting how they handle these rule-makings you can better plan the implementation of future rulemakings.
If you want a summary of the CFPB’s ‘clarifications’ click on the links provided above. Those links will also take you to the actual proposal. If you want to comment on the proposals, keep in mind that the comment period is very short – 15 days for the escrow rule and 30 days for the ATR and Servicing – so plan accordingly.
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As of October 1, 2012, each federally insured credit union had to adopt written policies addressing loan workouts. A credit unions loan workout policy and practices should be commensurate with the credit union’s size and complexity and coincide with the credit union’s risk mitigation strategies. Seems simple enough; however, questions were still lingering for both the credit unions and the Examiners on this new rule.
After soliciting feedback from credit union officials and accounting professionals, NCUA prepared and released new loan workout, nonaccrual and TDR guidance for the Examiners to follow (Letter 13-CU-03). Although this guidance is directed at field staff, it provides credit unions with valuable insight on what to expect when your Examiner inquires about your loan workout policies and procedures.
If you haven’t had a chance to review the letter yet, I would strongly encourage you to take some time in the coming days to review to ensure your loan workout program will meet examiner expectations. A little due diligence now can save you time later dealing with unwanted Examiner Finding or Document of Resolution items related to this area.
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NCUA recently created and released a new Fair Lending Guide. The guide was included in Letter to Federal Credit Unions, 13-FCU-12; however, state chartered credit unions can definitely take advantage of the guide as well.
NCUA supervises and enforces fair lending laws and regulations at federal credit unions and is also in a position to educate federally insured credit unions on their fair lending and consumer protection obligations. Fair lending laws and regulations encompass:
- Equal Credit Opportunity Act (Regulation B);
- Home Mortgage Disclosure Act (Regulation C); and
- Fair Housing Act (FHA).
Although NCUA does not actually issue these regulations, the laws require NCUA to enforce these regulations in the process of supervising federal credit unions.
In addition to the Fair Lending Guide, NCUA is also hosting a free webinar entitled, “Fair Lending Examination Program and Compliance Assistance” on Thursday, April 4, 2013 at 1 pm eastern. During the session NCUA’s Office of Consumer Protection staff will discuss NCUA’s ongoing fair lending program, including:
- An overview of NCUA’s fair lending examination program, including off-site supervision contacts;
- Fair lending best practices credit unions should consider; and
- The new Fair Lending Guide
So if you and your staff need a refresher on complying with fair lending laws I strongly encourage you to take advantage of these free NCUA resources.
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At PolicyWorks, we have had a lot of questions about the requirement to provide an annual privacy notice, in the last few months. Many credit unions have been confused, because last December a Bill which would reduce the requirement to provide this notice passed the House. Unfortunately, it did not pass the Senate before the new Congress began, so it must be presented again in 2013. This means that credit unions must continue to provide an annual privacy notice at this time.
The new Bill has been presented, and it has again passed the House. Now it is back over to the Senate, in hopes that it will pass there as well.
This means a reduced burden upon credit unions, which is always a good thing. It also means that those of us which are credit union members will get one less piece of mail, which we may consider to be irrelevant. And, those of us that are compliance nerds won’t waste 20 minutes reviewing the document to ensure it is compliant, and to determine if any changes have been made. Other than the postal service, everyone stands to gain if this Bill is passed.
Stay tuned to www.policyworks.com and www.theworksblog.com for further updates.
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Tuesday, February 19th was the effective date of NCUA’s final rule amending the definition of small entity from credit unions with less than $10 million in assets to less than $50 million in assets. So if you haven’t had a chance to read this rule because you are overworked and overstressed reading the CFPB’s mortgage rules let me give you a high level overview of the three key areas you need to know.
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