Proposed Regulations

Recently, the Board of Governors of the Federal Reserve System (Board) issued a proposed rule to amend Regulation Z, which implements the Truth in Lending Act (TILA). The proposed rule would apply principally to open-end credit that is not homesecured, and address a variety of issues relating to the format and content of open-end credit disclosures and the substantive protections provided under the regulation.

On March 27, 2007, the National Credit Union Administration (NCUA) published a proposed rule related to federally insured credit unions' obligation to maintain a records preservation program. The proposed rule amends Parts 748 and 749 of the NCUA's Rules and Regulations by clarifying requirements for preserving vital records and the meaning of “catastrophic act,” recommending items for consideration in restoring vital member services, and adding a new appendix comprised of recommended guidelines.

Recently, the Board of Governors of the Federal Reserve System (Board) issued a proposed rule to amend Regulation Z. Under the Home Ownership and Equity Protection Act (HOEPA), which amended the Truth in Lending Act, the Board is authorized to prohibit unfair or deceptive acts and practices in connection with mortgage lending. Accordingly, the proposed amendments would prohibit certain unfair, abusive or deceptive practices in connection with closed-end mortgage loans. The proposal is intended to focus particularly on abuses in the subprime mortgage market, while generally excluding the prime market.

The Federal Credit Union Act (FCU Act) permits federal credit unions (FCUs) to lend up to 1% of their paid-in and unimpaired capital and surplus and to invest an equivalent amount in CUSOs. NCUA's regulations allow FCUs to invest or lend to a CUSO only if the CUSO primarily services credit unions or credit union members.

NCUA is considering clarifying or revising aspects of its member business loans rule related to loan-to-value ratio, collateral and security requirements, the requirement that credit unions use the services of individuals with two years experience in the type of lending, credit union service organization involvement, loan participations, and waivers.

The amendments will allow Federal Reserve Banks to pay interest on depository institutions' balances held at Federal Reserve Banks to satisfy reserve requirements and on excess balances of required reserve balances and clearing balances. The interim final rule also includes several minor changes to the Board's clearing balance policy and the method for recovering float costs.

On July 30, 2008, the Board published a final rule amending Regulation Z, which implements the Truth in Lending Act (TILA). The July rule requires creditors to give consumers good faith estimates on mortgage loans other than those secured by the consumer's primary dwelling (such as a refinance loan). The July rule also requires that the disclosures be provided before the consumer pays any fee, other than a fee to obtain the consumer's credit report.

The proposal would amend current rules regarding electronic disclosures. Additionally, the rule would also require new disclosures regarding overdraft protection fees.

Recently, the National Credit Union Administration (NCUA), along with the Office of Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporate (FDIC), and Office of Thrift Supervision (OTS), issued a proposed interagency guidance on funding and liquidity risk management (proposed guidance). The proposed guidance reiterates existing principles of liquidity risk management and describes the process that institutions should follow to identify, measure, monitor and control their funding and liquidity risk.

The Federal Reserve published a proposed rule amending Regulation Z to implement the provisions of the Credit Card Accountability, Responsibility and Disclosure Act (CARD Act) that go into effect on Feb. 22, 2010. The Board's proposal covers a wide range of activities related to credit card lending.

On December 14, 2001, NACHA Rules Work Group #35 proposed amendments to the NACHA Board that would modify certain aspects of the Rule Enforcement Procedures.

The Federal Accounting Standards Board (FASB) has issued the final Statements on Business Combinations, Number 141 and Goodwill and Other Intangible Assets, Number 142. These Statements could potentially change accounting methods for credit union mergers in significant ways.

The Federal Reserve Board is requesting comments on a proposed rule amending Regulation Z to address concerns related to predatory practices in mortgage lending. The proposed amendments extend the protections of the Home Ownership and Equity Protection Act (HOEPA) to more loans, prohibit certain acts or practices such as loan flipping, strengthen HOEPA's prohibition on loans based on homeowners' equity without regard to repayment ability and revise HOEPA disclosures received by consumers before closing.

The Federal Reserve Board has issued a proposed rule amending the Official Staff Commentary on Regulation E. The commentary applies and interprets the requirements of Regulation E and assists financial institutions in compliance with the regulation.

On November 26, 2002, the Board of Governors of the Federal Reserve issued proposed revisions to the official staff commentary on Regulation Z, which applies and interprets the requirements of Regulation Z.

The Internal Revenue Service has published a proposed regulation on the reporting requirements for interest on deposits maintained at U.S. Offices of certain financial institutions and paid to nonresident alien individuals that are residents of specified countries.

On April 12, 2002, Rules Work Group #52 of the National Automated Clearing House Association (NACHA) published proposed amendments that would clarify the NACHA Operating Rules to address inconsistencies identified within the Rules and to modify certain aspects of various applications to function more efficiently in today's marketplace.

On September 24, 2003, NCUA issued a proposed rule updating its rule regarding the conversion of insured credit unions to mutual savings banks. The proposed rule seeks to increase disclosure requirements to ensure that the credit union's notice of conversion to its members provides full disclosure and transparency

On March 27, 2003, the National Credit Union Administration published proposed revisions to the member business loan regulation and related provisions in the prompt corrective action, corporate credit union, and credit union service organization rules.