May 23, 2019

Rulemakings underway headline NCUA, CFPB agendas

regulationsBoth the NCUA and CFPB released their spring rulemaking agendas this week. A number of issues on the agendas are already underway, including payday lending and alternative loans, real estate appraisals, federal credit union bylaws, debt collection, Home Mortgage Disclosure Act (HMDA) and more.

Other federal departments and agencies also released their spring rulemaking agendas, including the Federal Housing Finance Agency. Its agenda includes a number of issues NAFCU previously commented on, including Federal Home Loan Bank goals, uniform mortgage-backed security, credit score models and enterprise capital requirements.


Rate ceiling for federal credit union loans: The agenda indicates an advance notice of proposed rulemaking to gather feedback on the issue is slated for this summer. The NCUA in August voted to maintain the interest rate ceiling at a fixed 18 percent; NAFCU encouraged the board to move forward with a variable interest rate because of the growth opportunities it would provide credit unions.

Payday alternative loans (PALs): NCUA's agenda indicates that the agency expects to finalize its 2018 proposal to create additional PALs programs in June. NAFCU, commenting on the proposal, recommended more flexible parameters. The association also continues to urge the CFPB to expand its payday loan rule safe harbor to all future iterations of PALs.

Federal credit union bylaws: NAFCU has long advocated for bylaws changes and proposed several additional amendments to the NCUA's proposal issued in November. The agenda indicates the agency will release a final rule in July.

Real estate appraisals: Real estate appraisals were among NAFCU's priorities for the NCUA to address this year. NAFCU offered its support for the NCUA's commercial real estate appraisal proposal – which attempts to credit unions' standards more consistent with the changes other regulators have made for banks. The agency is set to finalize this rule this summer, and is expected to issue a proposed rule for residential real estate proposals in June.

Subordinated debt/regulatory capital: The agency issued an advance notice of proposed rulemaking in 2017, which sought feedback on both supplemental and alternative capital. A formal proposal is expected this summer.

Credit Union Service Organizations (CUSOs): A proposed rule to expand the permissible lending activities for CUSOs is expected soon.


Debt collection: The bureau earlier this month issued a proposed rulemaking related to third-party debt collection. NAFCU has urged the bureau to exempt credit unions from any rules related to first- and third-party debt collection, as credit unions are not the bad actors in this space. See what's in the proposal here.

Payday lending: The bureau has proposed delaying the implementation date of the rule until 2020 and removing mandatory underwriting requirements, including ability-to-repay provisions. NAFCU offered its support for both proposals and reiterated its request that the rule's safe harbor for NCUA's PALs be expanded. The agenda indicates it will finalize a delay this summer.

Regulation CC: With the Federal Reserve, the bureau last year issued a proposed rule that would introduce a new calculation methodology for adjusting dollar amounts under the Electronic Funds Availability Act to account for inflation and make technical amendments to the regulation. NAFCU asked that the final rule, expected this summer, mitigate funds availability disclosure costs that could disproportionately impact small credit unions.

Home Mortgage Disclosure Act (HMDA): The bureau recently issued a notice of proposed rulemaking on the thresholds and an advance notice of proposed rulemaking (ANPR) on the costs and benefits of reporting certain data points. Credit unions can learn more about these efforts here.

Ability-to-repay (ATR)/qualified mortgage (QM) rule: In a release announcing its agenda, the bureau noted its assessment of the ATR/QM and said it's focusing now on the government-sponsored enterprise (GSE) patch provision. During a NAFCU Regulatory Committee meeting in January, the bureau updated credit unions on the ATR/QM assessment and the committee specifically asked the bureau to extend the GSE patch.

The bureau's release also highlighted its efforts to review existing regulations, including those to consolidate various mortgage origination disclosures under TILA/RESPA. The bureau recently announced it would begin reviewing rules as required by the Regulatory Flexibility Act; it is starting with the overdraft rule.