From the Archives: March 2013

Student Loan Affordability; Disclosure of Records & Information; MBL Waivers; Denial-of-Service Attacks Risk Alert; Financial Instruments - Credit Losses; Social Media Risk Guidance; Financial Products for Students 

Student Loan Affordability
As part of an investigation into student lending practices, the CFPB has issued a request for comment to determine options that would increase the availability of affordable payment plans for borrowers with existing private student loans. The information gathered will be used to help policymakers identify opportunities to spur refinance and modification activity in the private student loan market. Comments are due April 8. A copy of the request for comment can be found here.

Disclosure of Records & Information

On Feb. 15, the CFPB released the final rule establishing procedures for the public to obtain information from the bureau, under the Freedom of Information Act. The Disclosure of Records and Information Rule also establishes how the CFPB will confidentially treat information obtained from persons in connection with the exercise of its authorities. The rule is effective March 18. To access the final rule, click here.

Member Business Loan Waivers

The NCUA issued Supervisory Letter to Credit Unions 13-CU-02 addressing member business loan waivers. The guidance provided information on credit unions' eligibility for waivers of regulatory requirements on certain types of member business loans. The NCUA stressed that rather than applying for a separate waiver for each loan, a credit union may apply for a “blanket” waiver that would cover all MBLs meeting certain conditions. The guidance also addresses clarifications regarding when waivers are needed. Additional information on the supervisory letter is available here.

Mitigating Distributed Denial-of-Service Attacks Risk Alert
Due to the increasing frequency of cyber-terror attacks on depository institutions the NCUA released a Risk Alert to address distributed denial-of-service (DDoS) attacks and the effect of internet services outages resulting from overloading network bandwidth and system resources. The alert identifies appropriate policies and procedures to guard against DDoS attacks. Such attacks are sophisticated, requiring the vigilance of credit unions offering Internet-based financial services. The NCUA requested credit unions exercise due diligence in employing controls outlined by the FFIEC.

The NCUA Risk Alert is available here.

Financial Instruments – Credit Losses

The Financial Accounting Standards Board issued a request for comment on its proposal to improve financial reporting for expected credit losses on loans and other financial assets held by credit unions and other financial institutions. The proposed accounting standards update, Financial Instruments — Credit Losses (Subtopic 825-15), proposes a new accounting model intended to require more timely recognition of credit losses, while also providing additional transparency about credit risk. 

Comments are due on or before April 30. A copy of the request for comment can be found here.

Social Media: Consumer Compliance Risk Management Guidance

The Federal Financial Institutions Examination Council is proposing guidance to address consumer protection and compliance laws, regulations and policies for social media activities conducted by financial institutions, including credit unions. The proposed guidance is meant to help financial institutions identify potential risk areas as well as ensure institutions are aware of their responsibilities to oversee and control these risks within their overall risk management program. Comments on the proposal must be received on or before March 25. The complete proposal can be reviewed here.

MCUL Comments on CFPB’s Request for Information on Products Marketed to Students
MCUL submitted a comment letter to the CFPB in response to its request for information on Financial Products Marketed to Students Enrolled in Institutions of Higher Education. The CFPB requested the information to get a clearer picture of the financial products and services that are offered to college students, as well as information about how financial institutions can structure and promote positive financial decision-making among young consumers. 

In their comment the MCUL stressed the unique relationship students have as member/owners of their credit unions and the significance of the financial literacy and education provided by credit unions to all members, but particularly focused on students. In 2012, Michigan credit unions operated 395 student-run credit union branches and presented 2,001 classroom presentations on financial literacy. The MCUL highlighted the regulatory restrictions already present in the Truth in Lending Act to protect student borrowers and advocated for decreased regulatory burdens for credit unions. 

Federal and State regulatory Issues

Previous Issues

Search Priority Report

MCUL Publications