Legislative & Regulatory Update

​The CFPB and overdraft proposals; student loan payment resumption and challenges; NCUA welcomes Otsuka to board; and other issues impacting credit unions.  

by John Alexander, Director of Legislative & Regulatory Affairs
 
Big Developments in Politics and Credit Unions!
Let's dive deeper into some of the major happenings in the world of politics and how they're impacting credit unions.

Supreme Court Steps into Trump Election Saga
On the national stage, the Supreme Court has agreed to consider a highly significant case. The question at hand is whether states have the authority to block former President Donald Trump from appearing on election ballots due to his actions during the 2020 election and the Capitol riot on January 6, 2021. This case is monumental, as it could set a precedent affecting future elections and the eligibility of candidates who are embroiled in legal or constitutional disputes. The outcome of this case will be keenly watched by political and legal experts across the nation.

The Starting Line: Iowa Caucuses and the 2024 Presidential Election
On the political calendar, the Iowa caucuses are imminent, marking the beginning of the 2024 Presidential Election. These caucuses are a critical first step in the nomination process for presidential candidates. They serve as an early indicator of a candidate's potential success and can significantly influence subsequent primaries and caucuses. The outcomes here will be closely analyzed to gauge the mood of the electorate and the direction of the major political parties.

CFPB and Overdraft, NSF Proposals: What Credit Unions Need to Know
In regulatory news, there's an important update for credit unions. The Consumer Financial Protection Bureau (CFPB) is required to initiate a Small Business Regulatory Enforcement Fairness Act (SBREFA) review for any potential rules they propose regarding overdraft and non-sufficient funds (NSF) fees. This step is crucial as it ensures that the interests and concerns of small businesses, including many credit unions, are considered before implementing new regulations. The proposed rules could have significant implications on how credit unions manage overdraft and NSF fees, which are critical aspects of their operations and customer relations.

CFPB Announces Open Filing Period for 2023 HMDA Data
The Consumer Financial Protection Bureau (CFPB) has opened the filing period for Home Mortgage Disclosure Act (HMDA) data collected in 2023. This announcement is crucial for credit unions as they prepare to submit their mortgage lending data. Timely submission of this data is important for compliance purposes, and the CFPB’s announcement serves as a reminder for credit unions to get their submissions ready by the deadline. If your credit union meets the criteria, you must submit the data to the CFPB no later than March 1, 2024.

NCUA's Final Rule and the Close of 2023
The National Credit Union Administration (NCUA), along with the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve, has issued a final rule that amends the Uniform Rules of Practice and Procedure. This rule represents a significant step forward in modernizing administrative proceedings. It embraces the use of electronic communications, aiming to increase efficiency in these processes. For credit unions, this move towards digitalization could streamline various administrative interactions and potentially reduce the time and resources spent on compliance and regulatory matters.

First Meeting of America’s Credit Unions Board: A New Era
An important event for the credit union community was the first official meeting of the America’s Credit Unions Transition Board of Directors. For those who may not have heard, DakCU’s president/CEO Jeff Olson is on that board.

This meeting marked the beginning of a new chapter for the national association, which was launched at the start of the year. The board is setting the course for transformative efforts, aiming to strengthen and modernize the credit union movement. The decisions and strategies formulated in these early meetings will be pivotal in shaping the future of credit unions across the country.

Rep. Luetkemeyer's Departure: A Shift in Financial Legislative Focus
The announcement by Rep. Blaine Luetkemeyer (R-Mo.) that he will not seek re-election in 2024 is significant for the credit union community. His role on the House Financial Services Committee has been instrumental in shaping financial and regulatory policies. Throughout his tenure, he has been a strong advocate for credit unions, introducing several pieces of legislation that have supported the industry. His absence from future policy making could lead to changes in the legislative approach to financial regulations, impacting credit unions.

NCUA Webinar: Navigating the Simplified CECL Tool
The National Credit Union Administration (NCUA) is conducting a webinar today, January 11, beginning at 1:00 p.m. (CT) to explain the usage of its Simplified CECL Tool. This event is particularly important for credit unions as they navigate the Current Expected Credit Loss (CECL) accounting standard. The webinar aims to demystify the tool, making it easier for credit unions to comply with these accounting requirements. Understanding and implementing CECL is crucial for credit unions to manage their financial reporting and risk management effectively. Registration is available here.

Congress Reconvenes: A Focus on Credit Union Priorities
With Congress back in session, the focus on credit union priorities is more important than ever. America’s Credit Unions, as a newly united national trade association, will play a vital role in engaging with lawmakers and advancing the interests of credit unions. The association's advocacy team will be active on Capitol Hill, keeping a close eye on legislative developments and ensuring that credit union perspectives are well-represented in policy discussions.

Spotlight on Student Loan Payment Resumption Challenges
The CFPB has issued a report highlighting the challenges borrowers face as federal student loan payments resume following a three-year pause due to the COVID-19 pandemic. This report is particularly relevant for credit unions, as it underscores the need for financial institutions to work constructively with borrowers during this transition period. The NCUA has encouraged credit unions to be accommodating and supportive of borrowers impacted by this resumption, emphasizing a cooperative approach.

NCUA Welcomes 25th Board Member, Tanya Otsuka
In a significant appointment, Tanya Otsuka has been sworn in as the 25th Board Member of the National Credit Union Administration (NCUA). Her role is vital in guiding the NCUA’s policies and oversight of credit unions. Otsuka’s commitment to ensuring a resilient and fair credit union system is a positive development for the industry, promising a continued focus on safeguarding the interests of credit union members.

These developments reflect a dynamic period in both the political and credit union spheres. The implications of these events are far-reaching, affecting legislative, regulatory, and operational aspects of credit unions. Staying informed and proactive in responding to these changes will be key for credit unions as they navigate the evolving landscape.
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Have a great week, and as always, don’t hesitate to contact me with any advocacy or regulatory questions.