Pennsylvania Credit Union Association
Life Is A Highway...July 29, 2010
Federal Agencies Issue Final S.A.F.E. Act Rules
Federal agencies issued final rules Wednesday requiring residential mortgage loan originators who are employees of national and state banks, savings associations, Farm Credit System institutions, credit unions, and certain of their subsidiaries (agency-regulated institutions) to meet the registration requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act). The final rules were issued by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of Thrift Supervision, Farm Credit Administration, and the NCUA.
The S.A.F.E. Act requires residential mortgage loan originators who are employees of agency-regulated institutions to be registered with the Nationwide Mortgage Licensing System and Registry (registry). The registry is a database created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators to support the licensing of mortgage loan originators by the states. As part of this registration process, residential mortgage loan originators must furnish to the registry information and fingerprints for background checks. The S.A.F.E. Act generally prohibits employees of agency-regulated institutions from originating residential mortgage loans unless they register with the registry.
The final rules establish the registration requirements for residential mortgage loan originators employed by agency-regulated institutions and requirements for these institutions, including the adoption of policies and procedures to ensure compliance with the S.A.F.E. Act and final rules. As required by the S.A.F.E. Act, the final rules also require that each residential mortgage loan originator obtain a unique identifier through the registry that will remain with that residential mortgage loan originator, regardless of changes in employment. This will enable consumers to easily access employment and other background information about registered mortgage loan originators from the registry. Under the final rules, registered mortgage loan originators and agency-regulated institutions must provide these unique identifiers to consumers.
The final rules take effect on October 1, 2010. Registrations will begin in January 28, 2011.
NCUA will provide an advance announcement of the date when the registry will begin accepting federal registrations.
Federal Register Notice & Final Rules
Third NCUA Corporate DVD Now Available Online
The NCUA has posted online the third installment of explanatory tracks to help credit unions better understand the history and prevailing situation involving the nation’s corporate credit union system.
Track 3 is available on NCUA's website. Track 3 outlines steps NCUA has taken to help stabilize the corporate credit union system.
This series of presentations is being produced to provide a broad overview, in simple terms, of various aspects of the corporate credit union crisis.
- Track 1 covers the history and services of corporate credit unions;
- Track 2 describes types of corporate credit union investments; how these investments were affected by financial market declines; and how problems with the investments affected corporates and threatened the entire credit union system.
- Track 3 focuses on NCUA efforts to stabilize the credit union system, ensure access to adequate liquidity and uninterrupted lending and payment processing, and achieve the least costly outcome for federally insured credit unions.
In the near future, a DVD containing all three tracks will be sent free of charge to all federally-insured credit unions.
Weekly InfoSight Update
The latest issue of InfoSight eNewsletter, dated 7/30/10, is now available. Click on the “Compliance” section to reach InfoSight and check out the latest compliance news. Here are some highlights from this week’s update:
Employment Channel
Employment rules keep coming at your credit union, rules such as EEO; OSHA; COBRA; USERRA; ADA; FLSA; FCRA; FMLA; EPPA; and more. How can your credit union stay current on all the federal and state employment rules? A good place to start is the Employment channel of InfoSight. Here’s what’s available: Checklists for OSHA and EEO; Posters for EEO and Minimum Wage; and FAQs for COBRA and the EPPA.
NCUSIF Coverage Made Permanent – $ 250,000
As a result of the signed Dodd-Frank Wall Street Reform and Consumer Protection Act, the NCUA share insurance maximum of $250,000 is permanent. And remember, share insurance stickers, downloads, and other resources are available on the NCUA website. And, every credit union must continuously display the official sign:
- At each station or window where insured account funds or deposits are received;
- In the credit union's principle place of business;
- In all branches; and
- On its Internet page (website) where it accepts deposits or opens accounts.
NCUA Official Advertising Statement
Every insured credit union must include the official advertising statement in all of its advertisements, including on its main Internet page. Credit unions are permitted to use the following language:
- The official advertising statement “This credit union is federally insured by the National Credit Union Administration”
- A shortened form, as follows: “Federally insured by NCUA”
- A reproduction of the Official Sign
CUNA Seeks Comment on Proposed FHA-HUD Credit Score Rules
CUNA has asked credit unions to comment on new credit score requirements imposed by the Department of Housing and Urban Development's (HUD) proposed changes to Federal Housing Administration (FHA) loan insurance standards.
BSA E-Filing Announces New Toll-Free Number and E-mail Address
The Financial Crimes Enforcement Network (FinCEN) announces a new toll-free number and e-mail address for the Bank Secrecy Act electronic filing (BSA E-Filing) Service Desk. Effective July 31, 2010, the BSA E-Filing Service Desk toll-free number and e-mail address will change. The new number is 1-866-346-9478 (Option 1) and the new e-mail address is BSAEFilingHelp@fincen.gov. The old number will be disconnected on July 31, 2010 and a recording announcing the new number will not be available if this number is called.
Compliance Calendar
July 30
Federal Reserve Form G-4 - Reg U Annual Report/Stock Secured Loans Filing - Due
August 2
Consumer Credit Card Agreement Submission Deadline
August 15
Regulation E - Overdraft Protection Rule (Existing Accounts) - Effective Date
August 22
Regulation E - Gift Card Rule Change Effective Date
September 6
Labor Day - Federal Holiday
Newsmakers
For the fifth year in a row, Freedom Credit Union teamed up with the Friends of Pennypack Park to sponsor a spirited show at the Pennypack Park Summer Music Festival. More than 1,500 people came out for the July 7 event to hear the music of the Sensational Soul Cruisers, who kept the crowd entertained for nearly two hours with classic Motown and R&B hits. Freedom representatives were also on-location to distribute promotional items and information about the credit union. Freedom’s sponsorship of the Soul Cruisers helps fund future concerts, make venue improvements to Pennypack Park, and provide scholarships for local youths to participate in performing arts programs.
National News
Udall takes Senate floor on MBLs
WASHINGTON (7/29/10)--Sen. Mark Udall (D-Colo.) on Wednesday again promoted legislation that would lift the current 12.25% cap on credit union member business lending ahead of a potential Senate vote on small business legislation.
Udall's new amendment, which was reintroduced on procedural grounds, is identical to earlier legislation that proposed lifting the current MBL cap to 27.5% of total assets.
Speaking before the Senate on Wednesday, Udall said that his legislation was a "small step" to help small businesses at no cost to taxpayers. Udall added that he would work with senators from both sides of the aisle in hopes of gaining support for his "sensible reforms."
The Credit Union National Association (CUNA) has estimated that lifting the cap even to 25% of assets would inject about $10 billion in new funds into the economy and create more than 100,000 new jobs, at no cost to taxpayers. Udall during his remarks cited the effect that his legislation could have on currently tight credit markets, and estimated that lifting the cap could create $200 million in new small business funding in his state.
The small business jobs bill may come up this week for a vote, though it is not known whether leading Senators can gather the votes needed to end debate. That legislation would provide small banks with $30 billion in funds to lend to small businesses. Udall, who supports the small business legislation, said that he did so with the understanding that if the Senate was "going to finance $30 billion to increase lending," they would "at the very least" also move to "increase lending without costing taxpayers a dime."
Negotiations on which amendments could be potentially added to the small business legislation continued late yesterday, and the Senate will likely hold a vote on limiting debate and amendments later today. President Barack Obama on Wednesday urged the Senate to approve the jobs bill, which he said would cut taxes for small businesses and make more loans available. Obama this week encouraged members of Congress to approve the legislation before the House and Senate begin their respective summer recesses.
House committee approves Internet gambling legalization
WASHINGTON (7/29/10)—H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, will move on to the full house after the House Financial Services Committee approved the legislation by a 41 to 21 vote margin on Wednesday.
The legislation, which was introduced by committee head Barney Frank (D-Mass.), would allow the U.S. Treasury to license internet gambling operators and would permit approved operators to accept bets from U.S. citizens.
Both Credit Union National Association (CUNA) President/CEO Bill Cheney and Discovery FCU President/CEO Ed Williams, who testified on behalf of CUNA, have spoken on the good that the gambling legislation could do for credit unions that are currently mired in the compliance burdens of the Unlawful Internet Gaming Enforcement Act (UIGEA).
UIGEA, as currently constructed, requires credit unions and other financial institutions are required to establish and implement policies and procedures to identify and block restricted internet gambling transactions, or rely on those procedures established by the payments system.
While many transactions that are made with illegal gambling operators are blocked, the UIGEA regulations do result in a large number of false positives, creating issues for both credit union members and credit unions.
H.R. 2267 would ease the compliance burdens by supplying a list of approved Internet gambling providers that financial institutions could use to help determine what transactions to validate.
However, Cheney, in a letter sent to House members this week, also urged legislators to direct the Treasury and the Department of Justice to develop and maintain a list of illegal Internet gambling providers, as well as the list of licensed operators, to further reduce the compliance burden on credit unions and other financial institutions. It is not known when the gambling legislation will come up for debate or a full House vote.
Unlawful Internet Gambling: Complying with the New Rule Audio Recording
New interchange issue creeps into subcommittee appropriations bill
WASHIINGTON (7/29/10)--Sen. Susan Collins (R-Maine) today may offer an amendment to an appropriations bill with an interchange provision in an effort to mitigate the impact of the provision on credit unions and community banks.
Collins expressed concern for credit unions earlier this week as the ranking Republican member of the Senate subcommittee that approved a funding package, which included a ban on payment card networks charging the federal government a credit card interchange rate higher than the lowest interchange rate available on the market.
Collins noted at that time her intention to offer a substitute" amendment when the full Senate Appropriations Committee considers the measure today, and the Credit Union National Association (CUNA) is asking credit unions to contact members of the committee to express concern about further interchange regulation.
"This legislation has a long path before enactment--and there is significant time to affect this legislative language. Nevertheless, we will not take this threat lightly and will work with Sen. Collins and other senators who have concerns about interchange regulation," CUNA Senior Vice President of Legislative Affairs John Magill said Wednesday.
The subcommittee, which added the interchange language to the funding bill, is chaired by Sen. Richard Durbin (D-Ill.), who drove the successful push to include government limits on interchange fees in the comprehensive financial services regulatory reform bill signed into law June 21.
Prior to a final vote in Congress, CUNA called for credit union grassroots action against the government controls, which resulted in hundreds of credit union advocates making personal visit to lawmakers on Capitol Hill. CUNA's call to action also spurred in excess of 600,000 emails and phone calls to lawmakers, urging their opposition to the interchange provision. The final law includes an exemption from the interchange limits that should cover all but the three largest credit unions.
CUNA continues to advocate for credit unions on interchange by working closely with the Federal Reserve as that agency works to implement the new rules affecting debit card interchange fees.
Also of interest to credit unions in the bill before the Appropriations Committee today are provisions that would set funding for the U.S. Treasury Department Community Development Financial Institutions (CDFI) Fund, and the National Credit Union Administration's Community Development Revolving Loan Fund (CDRLF), and Central Liquidity Facility.
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