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Federal agencies, including the NCUA and CFPB, have released their spring 2023 regulatory agendas. There are several NAFCU and credit union advocacy priorities included among the items, some of which have previously been introduced or included on previous rulemaking agendas.

Of note for the CFPB, the bureau anticipates publishing a final rule in October 2023 to amend its rules implementing the CARD Act related to penalty fees levied by card issuers, including the safe harbors for penalty fees. NAFCU has strongly opposed the bureau’s proposal to establish an $8 safe harbor credit card penalty fee limit, noting the negative impacts it will have on credit unions and their members.

CFPB Director Rohit Chopra testified before Congress this week, during which lawmakers echoed many of NAFCU’s concerns about its recent efforts. During the House Financial Services Committee oversight hearing, lawmakers criticized the bureau’s misleading campaign against “junk fees” and argued recent proposals and rulemakings go against the bureau’s mission of protecting consumers.

Here are a few other notable items included on the spring agendas; NAFCU will have additional insights available in the NAFCU Networks:

NCUA

Some expected proposed rules of note:

• Investment and Deposit Activities: This item has been listed in several previous agendas and the NCUA now has it listed for a proposed rule in October 2023. NAFCU has advocated for expanded investment options, and NAFCU’s Insights post on the Spring 2021 agenda has further analysis.
• Digital Assets: The NCUA says it will carefully review the comments from its previous request for information (RFI) on this issue and any studies related to President Biden’s Executive Order to determine what, if any, proposals should be forthcoming. NAFCU’s comment letter requested that the NCUA permit credit unions to provide custodial services for digital assets and adopt regulations that establish clear rules while enabling responsible innovation. This item was previously listed for June 2022 and has been updated to January 2024.
• Share Insurance Rules: The proposal, planned for July 2023, would simplify the share insurance regulations by establishing a “trust accounts” category that governs coverage of shares of both revocable and irrevocable trust. This change aims to ensure consistent share insurance treatment for all mortgage servicing account balances held to satisfy principal and interest obligations to a lender. The Federal Deposit Insurance Corporation (FDIC) previously adopted a similar final rule.

The NCUA also anticipates issuing final rules on several issues yet this year:

• Bank Secrecy Act (BSA): The proposed rule modified the requirements for federally insured credit unions (FICUs) to file Suspicious Activity Reports (SARs) and would amend the NCUA’s SARs regulation to allow the Board to issue exemptions from the requirements of that regulation in order to grant relief to FICUs that develop innovative solutions to meet the requirements of the BSA. NAFCU submitted comments in support of the proposed rule and asked for additional information and guidance to assist FICUs seeking an exemption. The final rule is tentatively planned for July 2023.
• Subordinated Debt: The proposed rule would eliminate the maximum maturity requirement in favor of a requirement that credit unions demonstrate how issued notes are considered to be debt and would extend the regulatory capital treatment of Grandfathered Secondary Capital. NAFCU’s comments supported the proposed rule; a final rule is listed for June 2023.
• Fintech: In December 2022, the NCUA issued a proposed rule, which appeared to incorporate the previously separate rulemaking item related to the Purchase, Sale, and Pledge of Loans proposed rule. The rule intended to clarify the NCUA’s regulations and provide FICUs with flexibility to utilize advantaged technologies and opportunities offered by the fintech sector, specifically through indirect lending arrangements and indirect leasing arrangements. NAFCU submitted comments in February.
• ACCESS Initiative: Chartering and Field of Membership Regulations: The NAFCU-sought proposed rule would streamline the chartering and charter conversion process, expand credit union membership eligibility for remote workers and underserved areas, and expand membership eligibility for the immediate family of deceased credit union members. NAFCU supported the proposal but recommended that the NCUA preserve standalone secondary member groups for surviving spouses and increase the period of time during which surviving family members remain eligible for membership. A final rule is expected later this fall.
• Federal Credit Union Bylaws: The proposed rule would implement the member expulsion process created by the Credit Union Governance Modernization Act, which became law in 2022. NAFCU urged the NCUA to avoid including any requirements not found in the statute and to give credit unions flexibility in conducting the expulsion process through in-person, virtual, or on-the-papers hearings. The final rule is listed for June 2023.

In addition, the NCUA plans to issue a final rule related to overdraft policy early next year. NAFCU has asked that this rule be finalized as soon as possible to provide credit unions with greater flexibility.

CFPB

The CFPB also plans to address overdraft fees, as well as fees for insufficient funds, with pre-rule activity for both anticipated in November 2023. The bureau also intends to begin pre-rule activity related to the Fair Credit Reporting Act in November. Other upcoming rulemakings of note:

• Section 1033 on Personal Financial Data Rights: In October 2022, the bureau released materials in advance of convening a panel under the Small Business Regulatory Enforcement Fairness Act (SBREFA). The bureau published its SBREFA report in April 2023 and expects to issue a notice of proposed rulemaking (NPRM) in October 2023. NAFCU submitted comments in response to the SBREFA outline of proposals under consideration.
• Supervision of Larger Participants in Consumer Payment Markets: Under Section 1024 of the Dodd-Frank Act, the bureau is authorized to supervise certain nonbank covered persons for compliance with federal consumer financial laws and for other purposes. Provisions within the section limit the bureau’s authority in certain markets to supervision of only “larger participant[s].” In a NAFCU-sought NPRM scheduled for release in July 2023, the bureau intends to define larger participants in consumer payments markets.

FHFA:

• Enterprise Regulatory Capital Framework: The final rule, expected in August 2023, would address capital requirements for a number of the government-sponsored enterprises’ (GSE) exposures including derivatives, market risk, multifamily loans in general and multifamily loans with government subsidies specifically, and exposures of a GSE to the other GSE. The rule would also encompass enhancements to the advanced approaches for credit risk and technical corrections. NAFCU supported the amendments but urged the FHFA to swiftly implement the bi-merge credit report requirement and the median credit score calculation, as well as implement a pricing specific adjustment of the base risk weight for mortgages originated by credit unions.

Financial Crimes Enforcement Network (FinCEN):

• National Defense Authorization Act (NDAA)-related provisions:
  • Section 6403 of the Anti-Money Laundering (AML) Act: FinCEN plans to issue a proposed rule in November 2023 revising the customer due diligence requirements for financial institutions.
  • Section 6101 of the AML Act: The AML Act required FinCEN to finalize regulations by January 2022. A proposed rule setting the national examination priorities has been delayed several times; it was originally scheduled for August 2021 and is now set for December 2023.
• Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities: FinCEN published a proposed rule that would establish protocols to protect the security and confidentiality of the beneficial ownership information (BOI) that will be reported to FinCEN pursuant to Section 6403 of the Corporate Transparency Act (CTA) and would establish the framework for authorized recipients’ access to the BOI reported. The proposed rule would also specify when and how reporting companies can use FinCEN identifiers to report the BOI of entities. NAFCU generally supported the proposal, but urged FinCEN to independently verify the BOI. FinCEN anticipates issuing a final rule in September 2023.