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Archive - 2001 Comment Letters

Current Comment Letters

Archive: 1999-2013


NCUA

CUNA Supports NCUA's Proposal Governing Corporate Credit Unions
(December 19, 2001)
CUNA basically supports NCUA's proposal governing corporate credit unions. The major revisions in the proposed rule concern capital, credit concentration, and credit risk. CUNA supports the views expressed in the Comment Letter filed with NCUA by the Association of Corporate Credi Unions (ACCU). Please click here to go to the ACCU Web site. CUNA also urges NCUA to work with the corporate credit unions and consider how a Reg-Flex paradigm could be applied to the corporates.

CUNA Supports Quarterly Call Reports for All Federally Insured Credit Unions
(November 1, 2001)
CUNA endorses NCUA's proposed flexible examination schedule. Under the proposal, robust credit unions will, in general, be examined on an eighteen-month cycle, rather than on an annual basis. By extending the examination schedule for healthy federal credit unions, NCUA will be able to focus resources on problem areas and schould be able to achieve reductions in the agency's budget. This, in turn, should result in a lower operating fee for federal credit unions. Also, because the quarterly call reports provide examiners with more timely information on all federally insured credit unions, NCUA expects that the ability of examiners to detect emerging problems will be enhanced. CUNA urges NCUA to explore approaches to ease the compliance burden for small credit unions regarding quarterly call reporting. CUNA indicates its strong support for flexible examination schedules for well-managed state credit unions as well.

CUNA Supports NCUA's proposal to allow FCUs to reimburse guests traveling with a CU official on CU business.
(October 2, 2001)
CUNA notes the amendment is an incremental change and fully consistent with NCUA Board Chairman Dollar's approach to regulation. The proposal does not affect the statutory limits on compensation to FCU board members.

CUNA Weighs In On Proposed Technical Changes and Clarifications to Some NCUA Regulatory Definitions
(August 20, 2001)
CUNA's letter commends NCUA for its efforts to streamline its regulations and clarify definitions by incorporating language from the FCU Bylaws and other documents to further explain key regulatory terms.

Interim Final Rule Regarding the Electronic Delivery of the Disclosures Required Under the Truth in Savings Act
(August 14, 2001)
Although CUNA supports many of the provisions of this interim final rule that will provide guidance on the timing and delivery of electronic disclosures, credit unions are very concerned about the restrictive definition of "electronic address," which restricts the use of e-mails within home banking and other Intranet programs. Many of these programs are designed to provide an accurate and efficient means to deliver these disclosures in a manner convenient for credit union members.

CUNA Supports Proposed Changes in NCUA's Regulations on Advertising and Posting Notice of Nondiscrimination in Real-Estate Related Lending
(June 25, 2001)
CUNA commends the NCUA Board for proposing modifications to the rule to bring it more in line with the nondiscrimination advertising rules of other regulators. CUNA believes that giving federal credit unions (FCUs) a broader choice in what they may use in their advertisements and fair lending posters will make it easier for them to publicize the FCU's commitment to equal credit opportunities for their members.

CUNA Supports Interim Final Rule on FOM Changes
(May 21, 2001)
CUNA is strongly supporting changes the National Credit Union Adminsitration adopted in March to streamline the application process for federal community credit unions. While NCUA adopted the rule in interim final form, it requested comments on the changes through May 21. One change would eliminate the requirement that applicants submit documentation to establish a community if NCUA has already determined that a community exists. Another change would delete the example of "common characteristics" from the list of acceptable documentation because it is of little value. The rule also delegates to the regional offices the authority to approve community applications when NCUA has already determined that requirements for a community in the same area exist.

CUNA Applauds Reg-Flex and Offers Recommendations for Expansion
(May 14, 2001)
CUNA's comment letter commends NCUA and in particular NCUA Board Chairman Dennis Dollar for Reg-Flex. CUNA also commends leagues and credit unions for commenting to NCUA in record numbers. CUNA urges expansion of Reg-Flex and advocates that state chartered credit unions should be entitled to Reg-Flex relief. Member business loans, as well as examinations, should be reviewed for inlcusions in RegFlex, among other recommendations, CUNA's 10-page letter states.

NCUA's Proposed Records Preservation Program
(April 24, 2001)
CUNA supports updating the records preservation program, but recommends allowing credit union managers to select records preservation personnel. CUNA also suggests NCUA define what is a vital record and provide examples of what is and is not a vital record.

NCUA's Interim Final Rule on Prepayment Fees to Federal Home Loan Banks
(April 24, 2001)
CUNA strongly supports this interim final rule to clarify that the NCUA Board, as conservator or liquidating agent of a federally-insured credit union, will honor a claim for prepayment fees by a Federal Home Loan Bank.

CUNA Urges NCUA to Adopt Broader CUSO Rule Changes
(April 23, 2001)

CUNA Commends NCUA and Urges Broader Powers for FCUs (Incidental Powers Proposal)
(February 22, 2001)
(PDF file, requires Adobe Acrobat Reader)

NCUA's Proposed Changes to Community Development Revolving Loan Fund Program
(February 20, 2001)
CUNA recommends NCUA clarify that it will not require credit unions seeking technical assistance to use its assistance, but they should be allowed to choose a third party vendor or NCUA.

Proposal on Corporate CUs
(February 20, 2001)
CUNA urges NCUA to give 100% credit for existing 3-year membership capital account in the capital and net economic value ratio calculations and for credit concentration limits. CUNA opposes a change in the definition of a corporate CUSO that would require 25 percent ownership by corporate CUs.

Letter to NCUA on Fair Credit Reporting Act (FCRA) Proposed Rule
(January 31, 2001)
CUNA requests a legal opinion letter from NCUA on guidance for credit unions on how to include the Fair Credit Reporting Act (FCRA) disclosures in the privacy notices that must be sent by July 1, 2001. NCUA issued a proposed rule on the FCRA disclosures last October but the rule will not be finalized in time for those credit unions that want to include the privacy notices in the first quarter statement mailings.


FEDERAL RESERVE BOARD

Disclosure of Automobile Financing Under Regulation Z, the Truth in Lending Act
(December 12, 2001)
In a letter from CUNA CEO Dan Mica to Federal Reserve Board Governor Edward M. Gramlich, CUNA urges the Federal Reserve Board to require more useful Truth in Lending information to consumers in disclosures related to 0% financing offered by the auto industry. In the letter, Mica cites a recent court ruling stating that selling cars to other customers for $1500 less than what is charged to those who choose low rate financing constitutes a finance charge under the Truth in Lending Act.

Federal Reserve System’s Payments System Risk (PSR) Policy
(November 16, 2001)
CUNA supports proposed changes to the Payments System Risk Policy Statement that would establish lower fees for financial institutions that pledge collateral for their daylight overdrafts on their Federal Reserve Bank accounts.

Revisions to Regulation Z, the Truth in Lending Act
(October 24, 2001)
CUNA offers a number of suggestions for consideration by the Federal Reserve Board's Consumer Advisory Council regarding possible changes to Regulation Z. These changes include more accurate disclosures when consumers receive low rate financing from automobile finance companies, more accurate APR calculations when cash advance fees are charged, simpler disclosures in certain situations, and allowing consumers under certain circumstances to waive the three-day right of rescission period for home equity loans.

July 31, 2001 Draft Check Truncation Act (Act)
(September 21, 2001)
CUNA generally supports the Act by the Board to promote truncation. CUNA only supports the Act because it would exempt credit union's current truncation programs from the new expedited consumer recredit provisions. Also, CUNA recommends that check images and not the original check be sufficient to satisfy some consumer claims. CUNA makes other recommendations and states its final support will depend on the final draft.

Docket No. R-1105, Study of Regulations Regarding the Online Delivery of Financial Services
(August 20, 2001)
CUNA makes numerous recommendations to the Board to suggest how its regulations may be adapted to facilitate online banking and lending. CUNA recommends that the Board change its definition of electronic address; revise its rules for providing initial disclosures; and revise its rules on posting web disclosures. In addition, CUNA recommends changes to Regulation D to encourage online transfers and withdrawal. CUNA urges the Board to work with NCUA regarding this study.

Docket No. R-1107, CUNA supports Interim policy
(August 6, 2001)
CUNA supports the Federal Reserve's interim policy statement that would allow a depository institution that has a self-assessed net debit cap to pledge collateral to its Federal Reserve Bank to access additional daylight overdraft capacity above its net debit cap level. This would allow greater flexibility for financial institutions that would outweigh the marginal increase in risk for the Federal Reserve.

Docket No. R-1109, CUNA support posting electronic check debits later
(August 6, 2001)
This policy may encourage financial institutions to use electronic check services.

Docket No. R-1110, CUNA supports $50 million limit on fedwire securities transfers
(August 6, 2001)
CUNA supports this policy, which is an efficient way to manage daylight overdrafts. Daylight overdraft are the credit that an institution borrows from its account with a Federal Reserve Bank.

Docket No. R-1040, Interim Final Rule Regarding the Electronic Delivery of the Disclosures Required Under Regulation B
(June 1, 2001)
Although CUNA supports many of the provisions of these interim final rules that will provide guidance on the timing and delivery of electronic disclosures, credit unions are very concerned about the restrictive definition of "electronic address," which prohibits the use of e-mails within home banking and other Intranet programs. Many of these programs are designed to provide an accurate and efficient means to deliver these notices in a manner convenient for credit union members.  

Docket No. R-1044, Interim Final Rule Regarding the Electronic Delivery of the Disclosures Required Under Regulation DD
(June 1, 2001)
Although CUNA supports many of the provisions of these interim final rules that will provide guidance on the timing and delivery of electronic disclosures, credit unions are very concerned about the restrictive definition of "electronic address," which prohibits the use of e-mails within home banking and other Intranet programs. Many of these programs are designed to provide an accurate and efficient means to deliver these notices in a manner convenient for credit union members.  

Docket No. R-1041, Interim Final Rule Regarding the Electronic Delivery of the Disclosures Required Under Regulation E
(June 1, 2001)
Although CUNA supports many of the provisions of these interim final rules that will provide guidance on the timing and delivery of electronic disclosures, credit unions are very concerned about the restrictive definition of "electronic address," which prohibits the use of e-mails within home banking and other Intranet programs. Many of these programs are designed to provide an accurate and efficient means to deliver these notices in a manner convenient for credit union members.  

Docket No. R-1042, Interim Final Rule Regarding the Electronic Delivery of the Disclosures Required Under Regulation M
(June 1, 2001)
Although CUNA supports many of the provisions of these interim final rules that will provide guidance on the timing and delivery of electronic disclosures, credit unions are very concerned about the restrictive definition of "electronic address," which prohibits the use of e-mails within home banking and other Intranet programs. Many of these programs are designed to provide an accurate and efficient means to deliver these notices in a manner convenient for credit union members.  

Docket No. R-1043, Interim Final Rule Regarding the Electronic Delivery of the Disclosures Required Under Regulation Z
(June 1, 2001)
Although CUNA supports many of the provisions of these interim final rules that will provide guidance on the timing and delivery of electronic disclosures, credit unions are very concerned about the restrictive definition of "electronic address," which prohibits the use of e-mails within home banking and other Intranet programs. Many of these programs are designed to provide an accurate and efficient means to deliver these notices in a manner convenient for credit union members.  

Real Estate Brokerage for Banks
(May 1, 2001)
CUNA President and CEO Dan Mica points out bankers' hypocrisy in seeking real state powers for their financial holding companies while adamantly opposing any new pwoers for credit unions. This letter was sent to key Congressional leaders as well as to the Federal Reserve and the Treasury Department.

Private Sector Adjustment Factor
(April 6, 2001)
CUNA supports the Federal Reserve's proposal to modify its method for calculating the PSAF, which affects the prices that the Federal Reserve Banks charge credit unions for payment services. By law, the Federal Reserve Banks must set their fees to recover their actual costs and the PSAF. CUNA believes that the proposal uses models and calculation methods that are reasonable, but the Federal Reserve should reevaluate these methods periodically.

Proposed Revisions to Regulation C (Home Mortgage Disclosure Act)
(March 9, 2001)
CUNA opposes these proposed changes to Regulation C, the Home Mortgage Disclosure Act. Although intended to combat predatory lending, the burden imposed by these changes will affect all financial institutions that meet the HMDA threshold, regardless of whether they are involved in predatory lending.

Proposed Revisions to Regulation Z (Home Ownership and Equity Protection Act)
(March 9, 2001)
CUNA generally supports these proposed changes to the Home Ownership and Equity Protection Act provisions of Regulation Z because they are targeted towards lenders that offer high-priced loans. CUNA also offered other suggestions, including the prohibition of single-premium credit life insurance that is financed over a long period of time and additional restrictions on prepayment penalties.


NACHA

ACH Preliminary Recommendations
(November 30, 2001)
CUNA makes comments to preliminary recommendations from a task force of the NACHAb Board of Directors in its draft report on making the ACH network more reliable; reducing fraud; and ensuring compliance.

CUNA Supports Production of Copies of Checks Within 5 Days for Certain ACH Transactions
(October 9, 2001)
CUNA supports the proposal to shorten the response time so that an originating depository financial institution must produce a copy of a check within 5 banking days, when a copy is requested by another financial institution. The current rules provide an originating depository financial institution with 10 banking days to produce the image.

Proposal Allows Usage of Electronic Affidavits, Authorizations, & Records
(August 13)
CUNA supports the proposal because it would facilitate the use of electronic agreements and electronic storage of records in conformance with law; allow automated clearing house (ACH) participants to use electronic affidavits without notarization; and allow credit unions and their members to conduct more of their financial business by efficient electronic methods.

Proposal to Expand Checks Eligible for ACH Truncation and Liberalize Authorization Requirements
(July 19, 2001)
CUNA supports NACHA's proposal to make corporate checks and checks between $2,500 and $50,000 eligible for truncation \into ACH items. CUNA supports notice as authorization for bill payments to lockboxes, but believes signatures should still be required at the point-of-purchase and for RCK collection fees. In addition, CUNA supports a new standard entry class (SEC) code for bill payments, but requests a delay in implementation of this SEC code. CUNA comments further on other aspects of this wide sweeping rule.

Proposed Limit of Three Presentments Per ACH Item Returned NSF
(July 17, 2001)
CUNA supports this proposal to limit ACH items to three presentments and recommends quick implementation of this rule. Credit unions have experienced multiple representments of items returned for insufficient funds. Multiple representments are costly for credit unions and their members.

Proposal to Allow ACH Debits to Purchase Securities
(March 15, 2001)
CUNA opposes this proposal that allows securities firms to send an ACH debit to a consumer's account to pay for securities trades. CUNA finds that this proposal shifts the liability for trade disputes from securities firms to financial institutions and creates too many operational and procedural burdens for financial institutions.


BITS (Banking Industry Technology Secretariat)

BITS Draft Framework on Technology Outsourcing
(July 24, 2001)
CUNA supports the Framework as a helpful business planning model that will provide credit unions of all sizes with guidance for sound program development concerning technology outsourcing. CUNA recommends several modifications and additions including: changing the title of the document to better reflect its scope; including a sample Request For Proposal; adding details concerning defining an appropriate exit strategy; clarifying the right to audit; discussing the establishment of a group/groups to conduct annual review of outsourcing arrangements; and addressing the issue of ongoing relationship management more fully.


IRS

Testimony at the IRS Hearing on Electronic W-2 Forms
(July 25, 2001)
This is a summary of testimony given by Navy Federal Credit Union on behalf of CUNA at the IRS hearing on the issue of furnishing electronic W-2 forms to employees. The testimony emphasized that the regulations' "notice and consent" requirements are unworkable. Requiring each employee to be notified and to provide consent before receiving electronic W-2 statements would burden employers, including credit unions.

Electronic Payee Statements (Supplemental)
(July 24, 2001)
CUNA supplements its earlier comment letter to the IRS and focuses on the issue of furnishing W-2s via electonic format. The IRS has drafted the proposed regulations to be consistent with the E-SIGN Act. However, a legal analysis of the E- SIGN Act leads to the conclusion that it is not appropriate to apply the "notice and consent" provisions of the E-SIGN Act in the case of furnishing electronic W-2s. Further, it would be impractical and unduly cumbersome for credit unions to bear the costs of establishing and maintaining two systems for current employees - an electronic one and a paper-based system for those who do not provide consent.

CUNA's Testimony at IRS Hearing Opposing the Proposal on Reporting of Deposit Interest Paid to Nonresident Aliens
(June 21, 2001)
This is a summary of CUNA's testimony at the IRS hearing on June 21, 2001 regarding the agency's proposal to expand reporting requirements for interest on deposits paid to all nonresident alien individuals. In its testimony, CUNA strongly urged the IRS to withdraw its proposal. In the alternative, CUNA urged the IRS to make changes to the proposal to minimize its impact on financial institutions, such as the change CUNA suggested regarding joint accountholders, and then to reissue the proposal for a 90- or 100-day comment period.

CUNA Opposes IRS Proposal on Reporting of Deposit Interest to Nonresident Aliens and Requests Opportunity to Testify at IRS hearing
(May 31, 2001)
CUNA's letter strongly opposes the IRS's proposal to expand reporting requirements for interest on deposits paid to all nonresident alien individuals. Currently, only such interest to Canadian residents is reportable. CUNA objected to the proposal based on its costs to credit unions and its questionable utility to the IRS. CUNA also urged the IRS to consider the impact of the proposal on undocumented invidiuals, which some credit unions are seeking to serve. CUNA has requested an oportunity to speak at the IRS's hearing on the proposal scheduled for June 21.

Electronic Payee Statements
(May 14, 2001)
CUNA supports the IRS' temporary and proposed regulations that permit payors required to furnish electronic payee statements -- IRS Form W-2, "Wage and Tax Statement," and Form 1098-E, "Education Loan Statement," the option to do so electronically. CUNA recommends expanding the authority to include other common payee statements such as Form 1099-INT, "Interest Income Statement." CUNA, however, expresses concern about the lengthy data storage requirement. CUNA also emphasizes that any confidentialy standards that are issued should be flexibile and technology-neutral to allow credit unions to used their best business judgment and to take advantage of new technologies as they become available.

Announcement 2000-84 - Use of the Internet by Exempt Organizations
(February 13, 2001)
CUNA urges that the IRS not impose restrictions with regard to Internet hyperlinks between a charitable organization and an organization that engages in political and lobbying activities. CUNA also opposes any changes to the exemption from the unrelated business income tax merely because a trade show is conducted online, instead of at a physical location.

Third Party Payment Rules
(January 19, 2001)
CUNA opposes the additional reporting requirements that credit unions may encounter when making third- party payments on an infrequent and isolated basis.

Follow-up letter to IRS Chief Counsel Stuart Brown
(January 8, 2001)
Follow-up letter to IRS Chief Counsel Stuart Brown on the change to IRS Form W-9, Request for Taxpayer Identification Number and Certification.

Request for Taxpayer Identification Number and Certification, IRS Form W-9
(January 5, 2001)
CUNA President and CEO Dan Mica's letter to IRS Commissioner Charles O. Rossotti, urging him to "suspend immediately" mandatory compliance with the IRS's recent change to form W-9, "Request for Taxpayer Identification Number and Certification." The new W-9 form came out just before the holidays, leaving no time for credit unions to incorporate new certification language onto account cards.


TREASURY

Federal Government Participation in the Automated Clearing House
(July 31, 2001)
CUNA urges Treasury to adopt several key improvements to its check conversion program, such as excluding certain corporate checks and keeping the rules consistent for consumer and corporate checks. In addition, CUNA is concerned about the elimination of the signature authorization for point-of-purchase ACH entries and asks Treasury to reconsider that decision.


SECURITIES AND EXCHANGE COMMISSION

Exemptions for Banks, Savings Associations and Savings Banks from the Broker-Dealer Requirements under the Securities and Exchange Act of 1934
(July 17, 2001)
CUNA urges the Securities and Exchange Commission to give credit unions the same exception to the broker- dealer requirements that it plans to provide to banks and thrifts.


FEDERAL TRADE COMMISSION (FTC)

Letter to FTC on Fair Credit Reporting Act (FCRA) Proposed Rule
(January 31, 2001)
CUNA comments on the Federal Trade Commission's (FTC's) proposed commentary regarding interpretations of the Fair Credit Reporting Act (FCRA), which is intended to conform certain requirements of the FCRA with the privacy rules that were issued last year. The FTC commentary will affect all state-chartered credit union and CUNA requests that the FTC permit these state-chartered credit union to follow the FCRA rules that were proposed by NCUA last October, which apply to federal credit unions.

Gramm-Leach Bliley Act Privacy Safeguards Rule, 16 CFR Part 314
(October 8, 2001)
The FTC's proposed rule on privacy safeguards will apply to approximately 400 non-federally insured credit unions and CUSOs. In our comment letter to FTC, CUNA suggests that these non-federally insured credit unions be permitted the option of complying with NCUA's rule, which applies to all federally insured credit unions.


FREDDIE MAC

Draft Electronic Mortgage Guidelines
(April 16, 2001)
CUNA supports Freddie Mac's e-mortgage guidelines but stresses that the guidelines should maintain maximum flexibility because technology is rapidly evolving and current practices may become obsolete rather quickly. The letter also suggests that these guidelines should be subject to periodic review and public comment so that they may reflect current technologies.


FINANCIAL ACCOUNTING STANDARDS BOARD (FASB)

Ronald Parker's Presentation on Behalf of CUNA at the Financial Accounting Standards Board Meeting on 10/29/01
(October 29, 2001)
At the FASB Board meeting on October 29 regarding mergers of mutuals, Ron Parker, a partner with the CPA firm of Clifton Gunderson (3rd largest auditor of credit unions in the U.S.) and partner in charge of their CU Group gave a presentation concerning who the users of credit union financial information are and their respective interests in that information. Mr. Parker noted that a board decision as to whether to merge or not to merge with another credit union is based on the benefit of the combination to the respective members in terms of better services and the safety and soundness of the surviving credit union. He concluded that the sum of net assets/fresh start method of accounting for credit union mergers is more faithful than the purchase method in terms of representing the economic realities of a credit union combinations and would be the most understandable and relevant to credit union decision makers.

Joint Working Group Letter Regarding Mergers of Mutuals
(October 24, 2001)
On October 29, FASB will hold an open meeting to hear the views of representatives from mutual enterprises (including credit unions and thrifts) on the issue of proper accounting treatment for mergers of mutuals. The new FASB merger rule eliminates the pooling-of-interests method of accounting and requires use of the purchase method. However, the rule will not be effective for combinations between 2 or more mutuals until FASB develops interpretive guidance related to the application of the purchase method. CUNA has been actively advocating for credit unions in a joint working group with other trade associations representing credit unions and thrifts, and regulators (NCUA, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation). A delegation from the joint working group has been invited to address the Board on October 29. Ron Parker, an accountant who has been involved in several CU mergers and has consulted with CUNA on a number of accounting issues, will represent CUNA.

Financial Accounting Standards Board's (FASB's) Proposal Regarding Fair Value Accounting.
(July 13, 2001)
CUNA strongly urges that credit unions be excluded from the scope of the Draft Standard. CUNA believes that requiring fair-value based accounting would needlessly burden credit unions and provide no apparent practical benefit for credit union members. In particular, the use of fair value accounting for credit union financial reporting does not make sense because: it would not reflect credit unions' unique nature; it would be impractical to conduct fair value calculations; it would decrease the comparability of financial statements; and it would cause variability in credit union financial statements making them difficult for users to understand.

Financial Accounting Standards Board's (FASB's) Proposal Regarding Accounting for Goodwill in Mergers.
(March 16, 2001)
In its letter, CUNA advocated that credit unions should not be included in the scope of FASB's Business Combinations Project along with for-profit entities. CUNA believes that purchase accounting with applicable goodwill required under the Business Combinations Project does not fit credit unions. CUNA's position is that credit unions should more appropriately be included in FASB's Combinations of Not-for- Profit Organizations Project.


OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT (OFHEO)

Study of Possible Systemic Risk Posed by Freddie Mac and Fannie Mae
(January 29, 2001)
CUNA comments on OFHEO's study of possible systemic risk posed by Freddie Mac and Fannie Mae. In the letter, CUNA stresses the benefits that credit unions receive from Freddie Mac and Fannie Mae. CUNA also questions the need for the study, the focus of the study, and whether conducting the study is a role that OFHEO should by undertaking.

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