Regulatory Roundup - January 2012
NCUA PROPOSED RULES
Part 701.22: Loan Participations: Purchases and Expansion of Requirements to Federally Insured Credit Unions
NCUA proposes to amend its loan participation regulation and relevant provisions in the eligible obligations rule, as well as the rule governing the purchase of assets and assumption of liabilities. The proposed rule aims to reorganize the current rule, direct its regulatory provisions to the purchase side of a loan participation, and impose new requirements relating to underwriting standards between participating credit unions, set concentration limits and require risk retention of 5 percent of the loan by the originating lender. It would also expand loan participation requirements to federally insured, state-chartered credit unions since loan participations often involve both state and federal charters. Comments are due on or before Feb. 21, 2012. A copy of this proposed rule can be found here.
Advanced Notice of Proposed Rulemaking – Maintaining Access to Emergency Liquidity
NCUA issued an Advanced Notice of Proposed Rulemaking that seeks public comment on the scope and requirements of a future proposal that would require federally insured credit unions, as part of their contingency funding plans, to have access to backup federal liquidity sources for use in times of financial emergency and distressed economic circumstances. NCUA is considering requiring this access be demonstrated by a credit union in one of four ways:
- Becoming a member in good standing of the Central Liquidity Facility directly;
- Becoming a member in good standing of CLF through a corporate credit union;
- Obtaining and maintaining demonstrated access to the Discount Window; or
- Maintaining a certain percentage of assets in highly liquid Treasury securities.
If issued, the regulation would be added to NCUA Part 741 (Requirements for Insurance), so it would apply uniformly to all federally-insured credit unions. Comments are due on or before Feb. 21, 2012. A copy of this proposed rule can be found here.
Part 742: Elimination of the RegFlex Program
NCUA has proposed to eliminate the Regulatory Flexibility Program (RegFlex) but would allow FCUs to engage in the activities permitted by the existing RegFlex Rule subject to safety and soundness concerns. This proposal is intended in part to provide regulatory relief as it would no longer require FCUs to engage in any process to obtain a Reg Flex designation. FCUs not currently eligible would have the relief extended to them subject to safety and soundness concerns. The six areas of relief include 1) charitable contributions, 2) nonmember deposit limits, 3) fixed asset occupancy requirements for unimproved land, 4) zero coupon investments, 5) borrowing repurchase transactions, and 6) private label commercial mortgage related securities. Comments are due on or before Feb. 27. A copy of the proposed rule can be found here.
CONSUMER FINANCIAL PROTECTION BOARD PROPOSED RULES
Fair Debt Collection Practices Act (Regulation F)
Mortgage Acts and Practices-Advertising (Regulation N)
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking authority for a number of consumer financial protection laws from seven federal agencies to the Bureau of Consumer Financial Protection Bureau as of July 21, 2011. The bureau is in the process of republishing the regulations implementing those laws with technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank act. In light of the transfer of the Board of Governors of the Federal Reserve System's (Board's) rulemaking authority for the Truth in Savings Act (TISA) to the Bureau, the Bureau is publishing for public comment an interim final rule establishing a new RegulationsF (Fair Debt Collection Practices Act); and a new Regulation N (Mortgage Acts and Practices). These interim final rules do not impose any new substantive obligations on persons subject to the existing regulations, previously published by the Board. Comments are due on or before Feb. 14. A copy of the proposed rules can be found here.
S.A.F.E. Mortgage Licensing Act (Regulations G & H)
Consumer Leasing (Regulation M)
Home Mortgage Disclosure (Regulation C)
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act transferred rulemaking authority for a number of consumer financial protection laws from seven federal agencies to the Bureau of Consumer Financial Protection Bureau as of July 21, 2011. The bureau is in the process of republishing the regulations implementing those laws with technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank act. In light of the transfer of the Board of Governors of the Federal Reserve System's rulemaking authority for the Truth in Savings Act to the bureau, the bureau is publishing for public comment an interim final rule establishing new Regulations G & H (S.A.F.E. Mortgage Licensing Act); a new Regulation M (Consumer Leasing); and a new Regulation C (Home Mortgage Disclosure). These interim final rules do not impose any new substantive obligations on persons subject to the existing regulations, previously published by the board. Comments are due on or before Feb. 17. A copy of the proposed rules can be found here.
Truth in Savings (Regulation DD)
Privacy of Consumer Information (Regulation P)
Fair Credit Reporting (Regulation V)
Equal Credit Opportunity (Regulation B)
Real Estate Settlement Procedures Act (Regulation X)
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act transferred rulemaking authority for a number of consumer financial protection laws from seven federal agencies to the Bureau of Consumer Financial Protection Bureau as of July 21, 2011. The bureau is in the process of republishing the regulations implementing those laws with technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank act. In light of the transfer of the Board of Governors of the Federal Reserve System's rulemaking authority for the Truth in Savings Act to the bureau, the bureau is publishing for public comment an interim final rule establishing a new Regulation DD (Truth in Savings); a new Regulation P (Privacy of Consumer Information); a new Regulation V (Fair Credit Reporting); and a new Regulation B (Equal Credit Opportunity). These interim final rules do not impose any new substantive obligations on persons subject to the existing regulations, previously published by the board. Comments are due by Feb. 21. A copy of the proposed rules can be found here.
NCUA LETTERS TO CREDIT UNIONS
12-CU-01: Supervisory Focus for 2012
The purpose of this Letter is to provide information analyzing the trends in credit unions for the first three quarters of 2011, and to alert all federally insured credit unions that “in order to ensure that the positive financial trends continue in 2012, NCUA plans to closely monitor and supervise emerging risks which are evident in several lending and investment trends” (i.e., credit risk, interest rate and liquidity risks, and concentration risk). A copy of this letter can be found here.
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