Compliance Update with Amy K

​New InfoSight content; Flood insurance webinar; CFPB Advisory Committee membership; ND DFI – Guidance for Digital Assets/Virtual Currency; and more.

New InfoSight Content!
Be sure to check out the new topic in InfoSight – Safe Deposit Boxes. This topic has been added to the Accounts Channel in InfoSight to assist credit unions with these sometimes complex issues/scenarios that can arise. The new content can help credit unions establish an effective program, and includes helpful FAQs.
 
Flood Insurance Q&A Webinar
As we discussed in the May 20 Memo, five federal regulatory agencies, including the NCUA, issued revised questions and answers (Q&As) regarding federal flood insurance law and the agencies’ implementing regulations. These Q&As replace those originally published by the agencies in 2009 and 2011 and consolidate Q&As proposed by the agencies in 2020 and 2021.

On Wednesday, July 27 at 2:00 pm eastern, the NCUA, FDIC, OCC, Fed, and Farm Credit Administration will host an interagency webinar regarding these recently finalized Flood Insurance Q&As. During the session, staff from the agencies will discuss the Q&As and there will be an opportunity for audience members to ask questions. The webinar is free and if you’re interested, you can register here. If you already have questions, you can pre-submit them to make sure they get addressed.
 
CFPB – Advisory Committee
The Consumer Financial Protection Bureau (CFPB) is accepting application for membership to their advisory committees, which includes the Credit Union Advisory Council. Directions on how to apply can be found here including a link to the questionnaire that would need to be completed.
The deadline to apply is July 24, 2022.
 
NCUA Regulatory Review – Comments Wanted
Every year the NCUA reviews one-third of its existing regulations. Comments are due August 16, 2022. As explained by the NCUA – “The NCUA’s goal is to ensure that all of our regulations are clearly articulated and easily understood. Comments are welcome on that aspect, as well as substantive suggestions for regulatory changes.”
The entire list of regulations under review this summer can be found here, but it includes regulations relating to FCU bylaws, FCU chartering and field of membership manual, loans to members and lines of credit to members, services for nonmembers within field of membership, truth in savings, mergers of insured credit unions into other credit unions.

If you have any thoughts or suggestions on potential improvements or changes please submit them either directly to NCUA or feel free to send your thoughts to me and I will incorporate them into our comment letter.
 
ND DFI – Guidance for Digital Assets/Virtual Currency
The North Dakota Department of Financial Institutions (ND DFI) recently issued a memorandum concerning digital assets and virtual currency which can be found here and is applicable to ND state chartered credit unions.  

As discussed in the guidance, the ND DFI does not encourage or discourage a credit union’s involvement in the virtual currency market. The DFI is issuing this guidance to help ensure risks are considered and mitigated. The guidance directs that – “Any credit union intending to engage in, or currently engaged in, activities involving or related to digital assets should consult its legal counsel and Federal regulator.”

ND state law does not explicitly authorize crypto custody services, therefore, credit unions that wish to offer their members crypto custody services must do so through a third-party service provider. The guidance discusses regulatory expectations, reputational risk considerations as well as BSA considerations.

The guidance notes that “Virtual currencies are not considered legal tender and can therefore not be taken as a deposit or membership share and placed on the credit union’s balance sheet as such.”

On the topic of investments – “North Dakota Administrative Code 13-03-22 does not authorize credit unions to invest credit union funds in virtual currencies.”

The credit union is considering accepting virtual currency as collateral, there are a number of issues that the credit union must first consider and address to ensure the credit union is fully protected against undue risk. Those considerations are discussed in further detail in the ND DFI’s memorandum, if any ND state chartered credit union is contemplating accepting this form of collateral.

As always, DakCU members may contact Amy Kleinschmit with any compliance related questions. ​

---