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NAFCU's Regulatory Committee meets today and on its agenda are various proposals open for comment from the NCUA, Federal Housing Finance Agency (FHFA) and Federal Reserve. The committee will also discuss compliance issues related to S. 2155, the Financial Crimes Enforcement Network's (FinCEN) customer due diligence rule, and the current expected credit loss (CECL) standard.

Here are details on the issues to be discussed during today's meeting:

• S. 2155's impact on Bank Secrecy Act (BSA) requirements: A provision of S. 2155, "Making Online Banking Initiation Legal and Easy (MOBILE)," potentially conflicts with BSA requirements – and could affect NCUA examinations – related to credit unions' internal Customer Identification Program policies. The MOBILE provision requires credit unions to permanently delete copies of identification once it's used to open and verify the identity of a member when either an account is opened or a financial service or product is offered online.

• FinCEN's customer due diligence rule: A recent NCUA letter to credit unions appears to impose new Office of Foreign Assets Control (OFAC) obligations related to FinCEN's customer due diligence rule. FinCEN typically does not interpret or implement OFAC regulations; a recent NAFCU Compliance Blog explains the issue and NAFCU plans to seek more guidance.

• Financial Accounting Standards Board's (FASB) CECL standard: The CECL accounting standards requires financial institutions – including credit unions – to record expected losses whenever they make a new loan. Recently, FASB offered CECL clarifications, including a proposed update to the standard's effective date for non-public business entities, which includes credit unions, and clarification that operating lease receivables are not covered within the scope of CECL. NAFCU continues to search for potential opportunities to provide relief for credit unions struggling to collect data and prepare for CECL implementation, and continues to urge the FASB to coordinate with the NCUA to provide credit unions with more resources.

• NCUA's real estate appraisals proposal: The NCUA Board in September advanced a proposed rule to make the commercial real estate appraisal standards for credit unions more consistent with the changes other regulators have made for banks. The proposal would increase the threshold from $250,000 to $1 million for non-residential (commercial) real estate transactions exempt from an appraisal requirement, among other things. Credit unions can submit comments on the proposal to NAFCU through its Regulatory Alert until Nov. 19.

• FHFA's enterprise capital requirements proposal: The FHFA has proposed setting capital requirements for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The purpose of the new risk-based framework is to assess credit risk across different loan categories, as well as market risk, operational risk and going-concern buffer components. NAFCU is supportive of efforts that will ensure the GSEs' stability in the secondary mortgage market. Credit unions can submit comments on the proposal to NAFCU through its Regulatory Alert until Nov. 2.

• FHFA's uniform mortgage-backed security (UMBS) proposal: The FHFA in September released a proposed rule on the UMBS meant to improve the liquidity of the GSEs' to-be-announced (TBA) eligible MBS; the GSEs are set to begin issuing the single security in June 2019. NAFCU supports standardization and uniformity in the MBS market. Credit unions can submit comments on the proposal to NAFCU through its Regulatory Alert until Nov. 2.

• Federal Reserve's settlement system for faster payments: The Fed is requesting comments regarding the development of a 24/7/365 real-time gross settlement (RTGS) service to facilitate interbank settlement of faster payments. It would also like to know whether it should also develop a liquidity management tool, possibly based on the existing National Settlement Service (NSS). NAFCU will seek feedback from credit unions on the proposal.

The Regulatory Committee will next meet Nov. 13.