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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 sues auto lender for predatory practices
The CFPB and New York State Office of the Attorney General sued Credit Acceptance Corporation, one of the nation’s largest publicly traded auto lenders, for predatory practices that tricked customers into high-cost loans on used cars.
The complaint alleges that Credit Acceptance hid costs in loan agreements. While the company claims consumers would pay interest at an average 22 percent APR, its “business model pushes dealers to manipulate the prices of vehicles sold to Credit Acceptance borrowers, based on borrowers’ projected performance,” which allowed the company to evade state interest rate caps and restricted consumers’ ability to make informed decisions. It also provided loans it knew consumers couldn’t afford, used aggressive debt collection methods, and created incentives for dealers to add expensive extra products to loans to drive up revenue.
The CFPB is seeking injunctive relief, monetary relief for consumers, disgorgement of unjust gains, and a civil money penalty. Last year, Credit Acceptance agreed to pay more than $27 million to Massachusetts borrowers for similar practices.
The bureau is looking into the auto lending market and working to collect data to better understand costs and trends. NAFCU and other trade groups have asked the CFPB to provide additional clarity on what it intends to do with the data.
Coinbase fined $100M for compliance failures
Coinbase – a U.S.-based cryptocurrency exchange – has settled charges brought by the New York State Department of Financial Services for $100 million, half of which will be in the form of a penalty to the state and the other half to bolster the company’s compliance program.
The department found that compliance failures led to violations of the state’s virtual currency, money transmitter, transaction monitoring, and cybersecurity regulations. “These failures made the Coinbase platform vulnerable to serious criminal conduct, including, among other things, examples of fraud, possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking,” the settlement release revealed.
Digital assets have been at the forefront of legislative and regulatory efforts in recent months, leaders at two other crypto companies were charged by the Securities and Exchange Commission and New York state this week. Banking regulators earlier this week issued a joint statement to banks highlighting the potential risks of participating in crypto-related activities.
NAFCU has engaged several federal agencies including the Federal Reserve, Treasury Department, and Commerce Department to provide feedback on the responsible development of digital assets. The association met with Treasury officials last month to discuss digital assets and regulatory efforts to ensure the safety and soundness of the financial services industry as more digital asset companies enter the market.
2022 HMDA data filing period open
The filing period for Home Mortgage Disclosure Act (HMDA) data collected in 2022 opened Jan. 1 and must be completed by March 1. The HMDA Platform provides financial institutions an opportunity to determine whether their loan/application register (LAR) data comply with the reporting requirements outlined in the Filing Instructions Guide for HMDA data collected in 2022.
The Beta Platform is still available for filers wishing to test submissions; the bureau reminded institutions, though, that data submitted on the test site does not constitute compliance with HMDA data reporting requirements. The Beta Platform also has a new tool that provides institutions with assistance in creating their HMDA LAR file.
The bureau at the end of December finalized annual changes to asset-size exemption thresholds under HMDA for 2023. However, an institution's exemption from collecting data in 2023 does not affect its responsibility to report data it was required to collect in 2022. NAFCU discussed changes to HMDA reporting thresholds in a recent post in the Compliance Blog.
NCUA webinar on successful CU operations
The NCUA is hosting a webinar Jan. 18 at 2 p.m. Eastern on the elements of successful credit union operations. Brian McDonough, from the NCUA’s Office of Examination and Insurance, will moderate a panel of credit union executives – including Jay Williamson, president and CEO of NAFCU-member American Southwest Credit Union – who will discuss topics related to governance, management, and strategic planning and execution.
Registration for the complimentary webinar is now open; there will be a Q&A after the panel discussion.
ENDS TODAY: Save $300 on NAFCU conferences, online training subscriptions
Credit unions still have time – until 11:59 p.m. Eastern tonight – to save $300 on all NAFCU conferences and online training subscriptions with code HOLIDAY. The code can be used as many times, and for as many people, as credit unions would like.
NAFCU's conferences are designed with credit unions' needs in mind, bringing together industry professionals and experts to provide credit union professionals with the top-rated education and training opportunities needed to take their careers and institutions to the next level. The association’s online training subscriptions offer credit unions with resources and training accessible year-round to elevate their team.