Compliance Update with Amy K

​NCUA Supervisory Priorities; a free webinar to address cybersecurity issues and ongoing threats; CFPB hosting series on combatting elder financial exploitation; and much more! 

by Amy Kleinschmit, Chief Compliance Officer
 
NCUA 2023 Supervisory Priorities
The National Credit Union Administration (NCUA) has issued its 2023 Supervisory Priorities, which can be found here. Every credit union should be reviewing this letter in its entirety as these are items your examiner is going to ask about or be reviewing when they visit. Also, take the opportunity to hear from the NCUA about these priorities, including asking questions in the upcoming webinar.

The NCUA will be hosting a free webinar on these supervisory priorities on January 31, which will include a Q&A period afterwards. The webinar will be moderated by Christel Orusede, from the NCUA’s Office of Examination and Insurance, and include a panel of NCUA subject matter experts who will discuss topics outlining NCUA’s supervisory priorities and other aspects of the agency’s examination program for 2023 to help credit unions prepare for their next NCUA examination.

Registration for this webinar is open here.

To highlight a few of the consumer financial protection compliance topics that are of priority for the NCUA:

• Flood Disaster Protection Act – review of requirements, including disclosure requirements.
• Overdraft programs – expanded review from 2022 to now include review of website advertising, balance calculation methods, and settlement processes. The NCUA will also evaluate any adjustments credit unions have made to their overdraft programs to address consumer compliance risk and potential consumer harm from unanticipated overdraft fees.
• Fair lending, including review of residential real estate appraisals for any bias – review of policies and practices for steering or loan pricing discrimination risk factors. Also, review of policies and practices related to residential real estate appraisals and conduct a tailored file review to evaluate the consistency, fairness, and accuracy of the appraisals a credit union obtains.
• The Truth in Lending Act – evaluate compliance with regulatory requirements and disclosures related to auto lending for certain credit unions that have experienced high auto loan growth over the past year.
• The Fair Credit Reporting Act – review compliance with regulatory requirements concerning furnishing, adverse action notices, risk-based pricing, and consumer rights disclosures.

Per the NCUA, examiners also consider trends in violations identified through examinations and member complaints, emerging issues, and any recent changes to regulatory requirements to establish these consumer financial protection priorities. Credit unions should review the Supervisory Priorities Letter carefully as it will be useful in preparation for your next NCUA examination. For example, if letter states that examiners will be reviewing a particular policy and procedures – the probability that your examiner is going to ask for that policy/procedure during your exam is pretty high, take the opportunity now to review and ensure everything is in place, updated and ready to go.
 
Free Cybersecurity Webinar from NCU-ISAO
The National Credit Union Information Sharing & Analysis Organization (NCU ISAO) will be hosting a free webinar on January 31, 2023, titled "Ongoing Threats to Credit Unions and Their Members: Dual attacks threaten CU employee and member data.”

Registration can be found here - https://ncuisao.org/events/.

Two ongoing, sophisticated attacks continue to target credit union employees and their members into the new year. As a result, member and employee credentials continue to be compromised at an alarming rate. In this session, we will review these attacks in-depth and share actionable solutions to help defend your organization’s employees and your members. During this webinar, presenters will cover:

• What are these ongoing cyber and fraud attacks on credit unions, their members and partners;
• How these attacks are carried out;
• Tactics credit unions and their partners can use to improve resilience against these coordinated attacks.

 
CFPB webinar series – Elder Financial Exploitation
The Consumer Financial Protection Bureau (CFPB) will be hosting a free webinar series on combatting elder financial exploitation. These webinars will occur over the course of five Wednesdays in February and March 2023 on approaches to combatting elder financial exploitation. Registration for this webinar series can be found here.
 
CFPB Circular 2023-01
The CFPB has issued its first Circular for 2023, which can be found here. This circular analyzes the question, “Can persons that engage in negative option marketing practices violate the prohibition on unfair, deceptive, or abusive acts or practices in the Consumer Financial Protection Act (CFPA)?” “Negative option” refers to a term or condition under which a seller may interpret a consumer’s silence, failure to take an affirmative action to reject a product or service, or failure to cancel an agreement as acceptance or continued acceptance of the offer.

The CFPB answers this question with affirmatively, explaining that – “Negative option” marketing practices may violate that prohibition where a seller (1) misrepresents or fails to clearly and conspicuously disclose the material terms of a negative option program;(2) fails to obtain consumers’ informed consent; or (3) misleads consumers who want to cancel, erects unreasonable barriers to cancellation, or fails to honor cancellation requests that comply with its promised cancellation procedures.

The circular expands on the CFPB analysis of this topic. Per the CFPB, Circulars are intended to promote consistency in approach across the various enforcement agencies and parties, pursuant to the CFPB’s statutory objective to ensure federal consumer financial law is enforced consistently.

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