ViClarity Compliance Update

​Bias in residential lending; CFPB reports on terms of credit card plans; and CFPB issues revised supervisory appeals procedure.  

The Dakota Credit Union Association’s dues-supported compliance solution –  ViClarity – is a world leader in credit union compliance. To read the complete articles/answers that are linked, you will need to log in with your username and password. If you have questions about establishing your members-only account with ViClarity, click here for detailed instructions or contact John Alexander in the DakCU office.

Valuation Discrimination and Bias in Residential Lending
On February 12, 2024, the Federal Financial Institutions Examination Council (FFIEC) released a statement of principles related to residential property appraisal and valuation practices for member entities to consider in their consumer compliance and safety and soundness examinations. The principles are designed to help member entities mitigate potential risks that may occur as a result of discrimination or bias as well as promote credible valuations. More specifically, the principles are intended to protect against discrimination or bias in residential property valuation practices that may be present in a supervised institution’s compliance management system and risk management practices, which may be identified during the examination process. Credit unions that do not have compliance systems or valuations practices in place that are sufficient to mitigate the risk of discrimination may face negative results during their examination. Read more on this topic here.
 
CFPB Reports on Terms of Credit Card Plans Survey
As part of the recent Terms of Credit Cards Plans survey, the Consumer Financial Protection Bureau (CFPB) found that large banks charge a significantly higher interest rate on credit cards and worse credit card terms than small banks and credit unions. To be more precise, large banks were found to have issued interest rates of 8 – 10 points higher on issued credit cards than small banks or credit unions.  While not surprising to most, the specifics are quite interesting to mull over and highlight to potential members or card holders. More on this topic here.
 
CFPB Issues Revised Supervisory Appeals Procedure
On February 16, 2024, the Consumer Financial Protection Bureau (CFPB) issued a procedural rule update, from the current procedure credit unions can use to appeal a supervisory finding. The updated rule broadens the CFPB’s officials eligible to evaluate appeals, the options for resolving an appeal, the matters subject to appeals and makes other clarifying changes.
 
The CFPB included some significant changes to the appeals process. Going forward, some of those changes include that the Supervision Director will select an appeals committee of three CFPB managers with relevant expertise who did not work on the matter being appealed, and who will advise the Supervision Director in conjunction with attorneys assigned by the CFPB’s General Counsel. Read more here.
​
For additional information, check out CFPB Press Release and CFPB Supervisory Process Rule. 
​