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5 things to know this week
NAFCU's widely read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. For those short on time, here's a roundup of this week's top need-to-know updates and resources.
CFPB’s credit card late fees proposal gets firm comment deadline
Wednesday, the CFPB’s proposed rule to drastically reduce the current credit card late fee safe harbor to $8 was published in the Federal Register. NAFCU has been vocal in opposing the proposal, with President and CEO Dan Berger stating it “amounts to financial chaos.” Comments are due to the bureau May 3; credit unions are encouraged to submit comments to NAFCU on the proposal.
Review the association’s Regulatory Alert on the proposal for a full breakdown of what credit unions need to know.
Movement on impending debt limit stalls
According to reports, House Republicans who previously stated they would not vote to raise the national debt limit without significant spending cuts are backing away from their initial promises to balance the budget and find themselves struggling to unite behind a fiscal plan. Progress on averting a default – which is expected to happen in July – has been stalled as President Biden and Congressional leaders have not scheduled any meetings to negotiate.
Of note, one piece of legislation introduced by House Republicans – intended to address the debt crisis – was advanced by the House Ways and Means Committee. The legislation, passed on a party-line vote in February, would “prioritize” payments on U.S. Treasury bonds if the country could no longer borrow funds to cover all its expenses. NAFCU will continue to track Congressional movement on the debt limit.
SEC charges crypto trading platform
Within the crypto space, the Securities and Exchange Commission (SEC) filed charges against cryptocurrency company Beaxy, alleging that the digital asset trading platform should have been registered as a national securities exchange akin to NYSE and Nasdaq. This is the latest step in SEC Chair Gary Gensler’s crypto crackdown and follows a Wells notice sent to Coinbase – the largest U.S. crypto exchange – explaining the commission’s intention to sue over a range of issues.
The Beaxy case stands out because the SEC has only charged a handful of crypto companies with operating an unregistered national securities exchange. Beaxy suspended operations Tuesday amid the exchange violations and unregistered broker and clearing agency violations.
Senate investigators find Credit Suisse hid $700M from IRS
The Senate Finance Committee found Credit Suisse hid more than $700 million in accounts from the IRS, in blatant disregard of a 2014 plea deal the bank made with the Justice Department for wide-ranging criminal tax evasion.
Credit Suisse remains in the news amid recent turmoil and its acquisition by UBS in a deal orchestrated by regulators in an effort to avoid further turbulence in the global banking system.
FHFA announces enhanced payment deferral policies
The Federal Housing Finance Agency (FHFA) announced Thursday the government-sponsored enterprises (GSEs) will enhance their payment deferral policies to allow borrowers facing hardship to defer up to six months of mortgage payments.
“Based on the success of the COVID-19 payment deferral, we are making this solution a key part of our standard loss mitigation toolkit that is available to all borrowers with eligible hardships,” said FHFA Director Sandra Thompson.
The payment deferral allows borrowers who are unable to resolve a financial hardship keep the same monthly mortgage payments by moving past-due amounts to the end of the loan as a non-interest bearing balance, due and payable and maturity, sale, refinance, or payoff. Mortgage servicers may offer borrowers one of several solutions to resolve a delinquency, including enhanced payment deferral, reinstatement, repayment plan, or loan modification, depending on their individual situations.