150x172 Exam Survey Promo
print

Archive - 2011 Comment Letters

 Current Comment Letters

 Archive: 1999-2013

National Credit Union Administration (NCUA)

Updated Interagency Guidance Regarding Flood Insurance
December 1, 2011
CUNA generally agrees that the three proposed interagency Q&As regarding force placement of flood insurance are consistent with the National Flood Insurance Reform Act of 1994 Act and its regulations. These interagency Q&As last updated in 2009 serve as guidance on flood insurance requirements for credit unions and other financial institutions, agency personnel, and the public. The three proposed interagency Q&As are intended to provide clearer guidance about the force placement of flood insurance, to clarify additional areas and avoid potential misunderstandings.

Letter from Bill Cheney to Chairman Matz Seeking Relief from Regulatory Burden
October 25, 2011
In light of credit unions’ growing concerns about regulatory burdens, the Credit Union National Association (CUNA) has assembled a list of rules and agency actions we believe NCUA should address that would provide meaningful relief to credit unions without undermining, either individually or collectively, the agency’ primary function of overseeing credit unions’ safety and soundness. CUNA believes that credit unions are simply overwhelmed by the regulatory requirements under which they currently operate and are quite concerned about any new requirements they may have to manage. The recommendations in this letter were developed based on issues raised by credit union officials, league staff, and members of CUNA subcommittees, committees and other leadership groups, including our councils. CUNA also surveyed credit unions on the issue of regulatory burdens, and this letter reflects those responses as well.

Proposed Technical Amendments to Corporate Credit Union Rule
October 6, 2011
CUNA generally supports these technical amendments and clarifications to incorporate previous changes to the corporate credit union rule. Overall, we support a more consistent regulation and encourage further efforts to reduce regulatory burdens on corporate credit unions. We believe the proposed revision that weighted average life (WAL) violations would no longer be subject to capital category reclassification for purposes of Prompt Correction Action under § 704.8 is appropriate and would reduce regulatory burden. Also, we agree the proposed revised definition of "net assets" in § 704.2 that excludes Central Liquidity Facility (CLF) stock subscriptions is appropriate because the credit risk of carrying CLF stock subscriptions is minimal and should encourage the use of the CLF as a liquidity provider, which will benefit corporate and natural person credit unions.

Interim Final Rule, Part 701, Remittance Transfers
September 26, 2011
CUNA supports the interim final rule. The rule correctly recognizes that Congress intended the Dodd-Frank Act section 1073 amendments to the FCUA to clarify that "remittance transfers" fall within FCUs’ preexisting authority to offer "international and domestic electronic fund transfers" to persons in the field of membership.

CUNA’s Comments on NCUA’s Notice of Proposed Rulemaking on Credit Union Service Organizations (CUSO)
September 13, 2011
As noted in its comment letter to NCUA, CUNA is a strong supporter of CUSOs and the ability of credit unions to utilize them to improve their product offerings to their members. CUNA does not support the NCUA’s proposed rule on CUSOs, and we maintain that CUSOs as a whole do not pose a systemic risk to the credit union system. In addition, we believe the agency has provided absolutely no data or analysis regarding current problems that could be used to substantiate the need for the proposal. CUNA is also concerned that the proposal would provide that the requirements for financial statements and financial audits be prepared under GAAP or GAAS be conditions that must be met for all federally insured credit unions lending to or investing in CUSOs or these institutions will risk losing NCUSIF coverage.

Financial Derivatives Transactions to Offset Interest Rate Risk
August 23, 2011
CUNA commends the Board for initiating a rule making process on the use of derivatives within natural person credit unions to help manage risks associated with changing interest rates. Moreover, we agree with the Board that credit unions should have tools to facilitate their operations, such as financial derivatives to hedge IRR, as long as they are consistent with vigilant risk management on the credit union’s part and reasonable supervision from regulators. We support this proposal and offer some recommendations concerning issues to be addressed in a subsequent proposed regulation.

Summary of the Issues and Proposed CUNA Positions on NCUA Proposal on Credit Union Service Organizations (CUSOs)
August 12, 2011
Here is a list of issues and concerns CUNA has with NCUA’s proposed rule on CUSOs; this is not CUNA’s comment letter to NCUA. It is important to note that as recent credit union news items have indicated, there have been some sizable problems in a small number of CUSOs and it is not unreasonable for NCUA as a safety and soundness regulator to consider whether additional rules are required to address those problems satisfactorily and to help prevent future similar problems. However, any new rule must be well-tailored to accomplish those objectives and be firmly based in authority under the Federal Credit Union Act. Most, although not all, of the provisions NCUA is proposing do not meet these standards for reasonable and appropriate rulemaking. Further, there is a real concern that many of the provisions will have a negative impact on CUSOs, which serve as an important tool for credit unions to use as they consider the most cost effective ways to serve the needs of their members.

2011 Regulatory Review
August 5, 2011
Each year, NCUA examines one-third of its rules to determine whether changes to those regulations are necessary. As the agency considers whether to update these regulations, whether revisions to other rules are warranted or whether new regulatory requirements are called for, we urge NCUA to be fully mindful that the cumulative regulatory burden on credit unions is at an all-time high. This is due not only to NCUA's activities but also to those of other agencies, including regulations pursuant to the Dodd-Frank Act. In light of the unprecedented scope of regulatory requirements that credit unions face today, we continue to urge NCUA to refrain from adding to such burdens, to the greatest extent possible, and to add new or expand existing rules only if there is a well-documented and compelling need to do so.

Community Development Revolving Loan Fund (CDRLF)
July 25, 2011
CUNA supports efforts to improve the process for "low-income" credit unions to apply for loans and technical assistance grants from the CDRLF. While we generally support this proposed rule intended to improve the CDRLF application process for credit unions, we have concerns about aspects of the proposed rule that would increase burdens and offer recommendations for NCUA’s consideration to improve the proposed rule. We urge NCUA to minimize CDRLF reporting and monitoring burdens on "low-income" credit unions and utilize existing reports to the greatest extent possible in light of the many compliance challenges credit unions already face. We support greater flexibility in the terms and conditions of each CFRLF loan.

Technical Correction – Golden Parachute and Indemnification Payments
July 25, 2011
While CUNA agrees IRC § 457(b) plans are more similar to IRC § 401(k) plans and some IRC § 457(f) plans may have broader flexibility, NCUA has not provided a compelling reason to exclude all § 457(f) plans from the "golden parachute" exception unless such plans meet the "bona fide deferred compensation" definition. If NCUA must restrict the scope of the "golden parachute" exception, then § 750.1(e)(2)(i) should specifically exclude both IRC § 457(b), as well as IRC § 457(f) plans that meet the "bona fide deferred compensation" definition.

Net Worth and Equity Ratio: Follow-up Letter
July 19, 2011
In a follow-up letter to NCUA, Bill Cheney reiterated CUNA’s strong support of the provisions of the proposed rule to allow section 208 assistance to be treated as regulatory net worth and the clarification that the NCUSIF’s equity ratio will be calculated using the financial statements of the NCUSIF alone. Consistent with CUNA’s May 23 comment letter to the agency, this letter also strongly opposes the proposed technical change to deduct "bargain purchase gain" in certain credit union mergers, which appears to be counter to the Financial Services Relief Act of 2006 regarding the combination of net worth in mergers.

NCUA’s Voluntary Prepaid Corporate Credit Union Stabilization Fund Assessment Proposal
June 20, 2011
In response to NCUA’s proposed plan for voluntary prepayment of Corporate Credit Union Stabilization Fund assessments, CUNA filed a comment letter with NCUA commending the agency for seeking comments on a creative proposal. While CUNA’s letter states support for the concept of prepaid assessments, the letter also provides the agency with a number of recommendations for improvements to make the program more beneficial and appealing to credit unions to address concerns without undermining the payment of assessments or the Fund itself.

Incentive-based Compensation Arrangements
June 1, 2011
In response to NCUA’s proposed rule on particular incentive-based compensation practices at financial institutions, which is addressed in the Dodd-Frank Act, CUNA filed a comment letter with the agency opposing most aspects of the plan as they would apply to credit unions. Generally, the proposed rule would be limited to incentive-based compensation arrangements at a covered financial institution (including credit unions with $1 billion or more in assets) that encourage executive officers, employees, or directors to expose the institution to inappropriate risks by providing excessive compensation. The final rule should acknowledge the important distinction between credit unions that generally do not participate in the types of risk-taking that contributed to the financial crisis and certain banks and other financial entities that do participate in such activity. In light of those differences, the burdens of this rule on credit unions should be absolutely minimal, and no provision for credit unions should be any harsher than similar provisions for other institutions.

Interest Rate Risk Proposal
May 23, 2011
The cumulative regulatory burden on credit unions is at an all-time high, due not only to NCUA’s activities but also to the flood of new rules being issued by other agencies, including regulations pursuant to the Dodd-Frank Act. In light of this situation, any new rule bears an especially heavy burden of justification. New rules should be added to the list only if they are clearly warranted based on a compelling need. We do not believe the agency has provided sufficient evidence that such a need exists here. CUNA has consistently supported appropriate safety and soundness regulations that are well-tailored to address problem areas and that enhance strong yet reasonable oversight. Further, CUNA has urged all credit unions, no matter how large or small, to manage all the risks they undertake well, including (Interest Rate Risk) IRR. CUNA offers a comprehensive program of training and education for credit unions to enhance their risk management strategies and skills. However, while we support proper IRR management and urge credit unions to ensure they have adequate IRR policies and comprehensive IRR management programs, we do not agree that a new regulation on interest rate risk, that would be a condition of federal insurance, inviting micromanagement from agency examiners, is justified.

Net Worth and Equity Ratio
May 23, 2011
CUNA strongly supported the legislation to allow section 208 assistance to be treated as regulatory net worth and we support most aspects of NCUA’s proposal to implement this new law. In particular, we support the inclusion of section 208 assistance in a credit union’s net worth and the clarification that the NCUSIF’s equity ratio is to be calculated using the financial statements of the NCUSIF alone. CUNA, however, opposes the proposed "technical change" to deduct "bargain purchase gain" in certain credit union mergers. This aspect of the proposal should be further studied by the agency and be subject to additional notice and comment.

Removal of References to Credit Ratings in NCUA’s Regulations
May 2, 2011
The Dodd-Frank Act requires each federal agency to replace references to or requirements in its regulations regarding credit ratings with new standards of creditworthiness as established by each agency. NCUA’s proposed rule would delete the two dozen references to credit ratings in NCUA’s regulations and add certain provisions to address assessment of credit risk. However, we have concerns with some aspects of the proposal. Further, certain proposed changes are beyond what is required under the Dodd-Frank Act.

Accuracy of Advertising and Notice of Insured Status
March 4, 2011
CUNA opposes most of the provisions included in NCUA’s proposal to amend its official advertising statement rule, Part 740. As described in its comment letter to the agency, CUNA fully supports appropriate, effective disclosure aimed at informing and protecting consumers. However, we strongly oppose many of the Board’s proposed changes and believe they will have negative unintended consequences if adopted as proposed.

Sample Income Data to Meet the Low-Income Definition
February 22, 2011
CUNA generally supports NCUA’s proposal to amend its low-income rule to allow federal credit unions that do not qualify for a low-income designation using NCUA’s geocoding software to submit an analysis of a statistically valid sample of member income data as evidence that they qualify as low-income. We believe the proposed changes that would allow a credit union to submit an analysis of a sample of member income data rather than actual data will greatly decrease the burden on credit unions seeking a low-income designation.

Interim final IRPS 11-1: Supervisory Review Committee
February 22, 2011
We appreciate NCUA’s efforts to centralize the Supervisory Review Committee (Committee)’s policies and provide additional review authority on Technical Assistance Grant (TAG) denials. Proposed IRPS 11-1 combines and updates information from IRPS 95-1 and IRPS 02-1. In addition, we also urge NCUA to further clarify how credit unions can appeal other supervisory and examination matters outside of the Committee’s review and further improve the appeals process to make it fully transparent. We support the Committee’s new authority to review TAG denials because credit unions previously had no forum to appeal the decisions within NCUA.

Temporary Unlimited Share Insurance for Noninterest-bearing Transaction Accounts
February 22, 2011
CUNA generally believes that NCUA’s approach to implementing the temporary unlimited share insurance for noninterest-bearing transaction accounts is consistent with the new statutory requirement. However, we also urge NCUA minimize the regulatory burdens associated with the proposal because credit unions in light of the many challenges credit unions already face regarding compliance with the numerous other Dodd-Frank and other regulatory initiatives that are being imposed on credit unions at this time. We believe NCUA should provide additional examples to credit unions of accounts that are considered interest-bearing and non-interest bearing, and clarify any differences between FDIC’s final regulation for noninterest-bearing accounts.

Proposed Rule to amend Part 704 of NCUA’s Corporate Credit Union Rule
January 24, 2011
CUNA has a number of serious concerns with the National Credit Union Administration Board’s proposal to amend Part 704 of NCUA’s Rules and Regulations regarding corporate credit unions. The Board issued the proposal in November 2010 to make further changes to the agency’s regulation on corporate credit unions, subsequent to the dramatic amendments the Board adopted two months earlier. As CUNA’s comment letter describes, we urge the Board to make the significant changes recommended in our letter before the rule is adopted in final form.

Credit Union Conversions: Definition of Regional Director
January 24, 2011
CUNA supports the National Credit Union Administration’s (NCUA’s) recent interim final rule—which became effective December 23, 2010—that amends the definition of "Regional Director" as it applies to certain types of credit union conversions. Specifically, the interim final rule amends the definition of "Regional Director" in Parts 708a and 708b of NCUA’s regulations to clarify that the regional director is either the NCUA director within a given region or the Director of the Office of Consumer Protection (OCP). As described in CUNA’s comment letter to the agency, while we support the interim final rule’s technical changes, we ask the NCUA Board to revisit the role of the Director of the OCP in the context of credit union conversions one year from the effective date of the new authority for the OCP and periodically thereafter, to ensure the process is working as intended.

Commodity Futures Trading Commission

End-User Exception to Mandatory Clearing of Swaps
February 22, 2011
CUNA supports the Commission establishing an exemption for credit unions and other end-user depository institutions with fewer than $10 billion in assets from the proposal’s mandatory swaps clearing requirements. We believe that the $10-billion asset threshold for the exemption should not be lowered. We would prefer it to be higher. However, we recognize that under the Commodity Exchange Act the Commission cannot adopt a higher threshold. Nevertheless, we question whether coverage under the Dodd-Frank Act’s provisions on mandatory clearing of swaps should be based on asset size alone. We think credit unions should be covered only if they have at least $10 billion in assets and transact significant volumes of swaps, with "significant volume" to be defined by the Commission consistently with the Commodity Exchange Act and other relevant regulations.

Definitions of "Swap Dealer" and "Security-Based Swap Dealer"
February 22, 2011
CUNA believes that the Federal Home Loan Banks (FHLBs) should be excluded from the definitions of a "swap dealer" and a "security swap dealer." Without such an exemption, FHLBs are likely to significantly decrease or eliminate the products credit unions and other FHLB-member financial institutions use to hedge interest rate and similar risks.

Consumer Financial Protection Bureau (CFPB)

Alternative Mortgage Transaction Parity (Regulation D)
September 22, 2011
CUNA supports the Regulation D interim final rule. Most, if not all, state-chartered credit unions have authority under state law to make "alternative" mortgage transactions authorized by AMTPA—such as adjustable rate mortgages (ARMs)—either expressly under the applicable state credit union act or pursuant to a state credit union act’s federal parity provision (often called "wildcard" statutes, which grant state-chartered credit unions parity with federal credit unions for business activities such as lending), and therefore are not affected by AMTPA or this rulemaking. Any state-chartered credit unions, however, that do not have state law authority for ARMs and/or other alternative mortgages will benefit from this new Regulation D because it clarifies the operation of AMTPA (including with respect to AMTPA’s state-law preemption) and preserves reasonable alternative mortgage authority for state-chartered institutions in a manner consistent with congressional intent.

Request for Information on Consumer Financial Products and Services Offered to Servicemembers
September 20, 2011
CUNA supports efforts by the CFPB Office of Servicemember Affairs to empower and educate servicemembers and their families to make informed consumer finance decisions. Credit unions currently offer a broad range of financial products and services well-tailored to the needs of the nation’s servicemembers, veterans, and their families. Credit unions fully support sufficient financial disclosures to servicemembers and their families so they can make informed, sound consumer finance decisions. Further, credit unions support efforts to eliminate abusive financial practices that harm the servicemember community and also to minimize compliance burdens on credit unions that provide important and reasonably priced products and services to their members.

Defining Larger Participants in Certain Consumer Financial Products and Services Markets; CFPB Docket No. CFPB-HQ-2011-2
August 15, 2011
CUNA believes that CFPB should define the term "larger participants" as it applies to non-depository entities based on the relative market share of those participants within a local market, such as a state and/or a Metropolitan or Micropolitan Statistical Area. CUNA supports CFPB using existing public data sources, CUNA urges CFPB to work with state regulatory agencies to avoid duplicative state and federal regulation. CUNA also urges the CFPB to examine the consumer benefits, if any, of "debt relief services" provided outside the bankruptcy process.

Consumer Financial Protection Bureau, Rules to be Enforced -- Docket No. CFPB-HQ-2011-1
June 30, 2011
CUNA does not take issue with the list of transfer regulations on which the agency seeks comments, however, CUNA urges the agency to refrain from imposing new burdens on credit unions. CUNA commends the agency for its approach to the integration of the model Truth in Lending and Real Estate Settlement Procedures Act disclosure forms.

Consumer Response Intake Fields
May 9, 2011
In our letter to the Bureau in response to its request for comments regarding consumer response intake fields to be used in consumer complaint forms, CUNA urges the Bureau to take steps so that the number of non-substantive and meritless complaints does not increase. In that connection, we encourage the Bureau to develop and employ a process for filtering out clearly frivolous consumer complaints. Our letter also communicates to the Bureau that each complaint a credit union receives—regardless of merit—has a cost to the credit union and in turn its members. The Bureau is required under the Dodd-Frank Act to develop a user-friendly and efficient method for consumers to lodge complaints regarding the improper activities of financial institutions.

Department Of Justice

ANPR on Web Accessibility Standards under the Americans with Disabilities Act" under U.S. Department of Justice
January 24, 2011
We support the intent of the U.S. Department of Justice’s (Department’s) advance notice of proposed rulemaking (ANPR) on the accessibility of web information and services of state and local government entities and public accommodations. Specifically, the ANPR addresses whether to require that the websites of public accommodations —that provide products or services to the public through such websites—be accessible to and usable by individuals with disabilities under the legal framework established by the Americans with Disabilities Act. However, we ask the Department to narrow the scope of web accessibility standards to apply only to public accommodations (including credit unions) that offer a full range of online services to their customers/members through their websites, and we ask the Department to afford greater flexibility under the web accessibility standards to smaller accommodations that simply offer a single online service or a very limited number of services. In addition, we urge the Department to extend the effective date for full-site compliance to at least 18 months from publication of the final rule. Further, CUNA’s comment letter encourages the Department to adopt flexible performance standards that would allow public accommodations to develop solutions capable of working effectively with their existing web frameworks.

Department of Treasury

Financial Access Activities
November 14, 2011
CUNA strongly supports equal access to financial products and services by all individuals, regardless of their financial position. We support Treasury’s work, as mandated by the Dodd-Frank Act, to develop and implement activities to enable eligible entities to provide account products and services to low- and moderate-income individuals who are outside the financial mainstream. Our comment letter to the Office of Financial Education and Financial Access offers several comments and suggestions on how to best achieve Treasury’s objective.

Community Development Financial Institutions Fund’s Bond Guarantee Program
August 15, 2011
Under the CDFI Fund Bond Guarantee Program, CUNA believes that CDCUs should be eligible for the CDFI guarantee on notes they issue and that CDCU subordinated notes of 5 years duration or longer be eligible to be considered LICU supplemental capital under NCUA net worth regulations. CUNA also recommends the agency define "low-income" in a manner consistent with NCUA's "low-income" definition under 12 C.F.R. § 701.34(a), that the program provide maximum flexibility in the structure and funding of Risk-Share pool, that NCUA’s regulatory standards for adequately or well-capitalized credit unions be applied when underwriting participating institutions and impact measures include total volume and number of loans.

Federal Government Participation in the Automated Clearing House (ACH) Network
April 25, 2011
CUNA generally supports the FMS’s interim final rule which permits credit unions to provide prepaid debit cards to receive Federal benefit payments. However, we urge the FMS to delay the mandatory compliance date until at least 6 months after the final rule. In addition, we also urge the FMS to minimize the rule's compliance costs and encourage additional collaboration with credit unions.

Bank Secrecy Act Currency Transaction Report (CTR) and Designation of Exempt Person Report (DEOP) Proposed Data Fields
March 28, 2011
We generally support FinCEN’s efforts to further modernize the BSA report filing process. However, we do have some concerns. We anticipate our institutions will incur substantial start-up and maintenance costs, as well as have to undertake significant staff training efforts to transition to the new BSA database. Additionally, we believe this transition will prove to be particularly burdensome for some of our smaller institutions. It is also expected that manpower and monetary costs related to the transition will be more extensive for institutions that are not currently utilizing the e-file process. Therefore, we ask that FinCEN take all necessary steps to minimize the burdens accompanying this modernization effort.

Housing Finance Reform
January 10, 2011
As noted in a letter to the Department of the Treasury regarding housing finance reform, CUNA supports a system that includes the following objectives: widely available mortgage credit; housing affordability; consumer protection; financial stability within the system; and strong regulation to ensure the mortgage system works as intended. In addition, CUNA’s letter provides specific recommendations on key issues regarding reform of the government-sponsored enterprises (GSEs) that reflect the needs and concerns of credit unions and their members. We urge Treasury to consider these recommendations and address them in its final report to Congress. Whether the functions of the GSEs are privatized or remain public to some degree, credit unions believe it is essential that the federal government’s regulation of the secondary market ensure that lenders of all types and sizes, including credit unions, have access to the secondary market that is equitable.

Federal Housing Finance Agency (FHFA)

Alternative Mortgage Servicing Compensation Discussion Paper
December 27, 2011
CUNA and its members urge FHFA to release further details on each proposal laid out in the Discussion Paper, and to refrain from making any changes to the servicing compensation structure until the future of the GSEs are determined and national servicing standards are developed. While we understand FHFA’s objectives, it is impossible to understand at this point what the effects of either proposal will be on credit unions and on the industry as a whole. We also believe any change in servicing compensation at this point is premature, in light of the myriad servicing standards proposals flowing from various initiatives by agencies, legislators, and Attorneys General. CUNA and its members are also concerned that the reduction in servicing compensation proposed under either option will lead to consolidation in the industry, driving out the small servicers and significantly reducing competition.

Interagency "Credit Risk Retention" Proposed Rules
August 1, 2011
CUNA supports the creation of an efficient, effective, and fair secondary market with equal access for lenders of all sizes. We also support strong oversight and supervision of securitizers to ensure safety and soundness. However, CUNA strongly opposes the proposed definition of a QRM as included in the proposed risk retention rules. The proposed QRM standard is simply too narrow, setting stringent underwriting standards that go beyond what was contemplated under the Dodd-Frank Act

Advanced Notice of Proposed Rulemaking on Members of FHLBs
March 28, 2011
CUNA does not support the aspects of the Advance Notice that propose ongoing compliance monitoring requirements for Federal Home Loan Bank (FHLB) members—including credit unions—designed to confirm that FHLB members remain committed to long-term mortgage lending.

Voluntary Mergers of Federal Home Loan Banks
January 24, 2011
The Federal Housing Finance Agency (FHFA) has proposed a rule on Voluntary Mergers of Federal Home Loan Banks (FHLBs) which implements the voluntary FHLB merger authority added to the Federal Home Loan Bank Act by the Housing and Economic Recovery Act of 2008. We support the proposed ratification of a FHLB merger through a membership vote even though the Bank Act does not expressly require a membership vote. CUNA also believes that a reasonable limitation on the number of votes that each member can cast is consistent with democratic principles and helps ensure that community institutions such as credit unions have a meaningful voice in FHLB governance.

Federal Reserve Board

Regulation D: Reserve Requirements
November 14, 2011
CUNA generally supports the proposed amendments to Regulation D (Reg D), even though we question the value of certain provisions in Reg D, such as limiting transfers from savings to transaction accounts, in influencing monetary policy. The proposed amendments are intended to simplify the administration of reserve requirements, and CUNA encourages further efforts to reduce regulatory burdens on credit unions, including those under Reg D. Additionally, because the Federal Reserve now pays interest on depository institutions’ balances maintained to satisfy reserve requirements, the proposed amendments are appropriate to bring these aspects of Reg D in line with this authority.

Regulation J: Technical Amendments
November 14, 2011
CUNA generally agrees with the technical amendments to Regulation J to incorporate the concurrent Regulation D (Reg D) proposal to simplify reserve requirement administration, as well as to clarify two other payment areas. Overall, we support more consistent regulations and encourage further efforts to reduce regulatory burdens on credit unions, including those under Reg D.

Process of Implementing the Debit Card Interchange Fee Provisions
November 14, 2011
CUNA, along with several other associations including The Clearing House, filed a comment letter with the Federal Reserve Board regarding the Fed’s proposed debit card issuer surveys that would be used to collect input on issuer costs associated with debit card transactions. The letter noted several areas of concern, such as: the lack of defining detail in the specific categories of data to be collected; the insufficiency of the scope of data to be collected to fully portray issuer costs; and the likelihood that certain information requested by the Fed may be of limited practical utility and lead to inaccurate conclusions. In addition, the letter requests the Fed to consider accepting surveys from debit card issuers that are exempt from the Fed’s interchange regulation; the interchange fee limitation of the Fed’s regulation applies only to issuers of at least $10 billion in assets.

Interchange Fee Fraud-Prevention Adjustment Interim Final Rule
September 30, 2011
In a joint comment letter to the Fed, CUNA, along with other representatives of the financial services industry, generally supports the interim final rule allowing for an interchange fee fraud-prevention adjustment. Specifically, the rule allows debit card issuers of $10 billion or more in assets to recover $.01 per debit card transaction to cover a portion of the issuers’ costs related to fraud-prevention. While we generally support the Fed’s approach, our letter urges the Fed to reexamine the amount of the adjustment and consider increasing it to $.04 or $.05 in order to sufficiently cover issuers’ fraud-prevention costs.

Regulation E: Remittance Transfers
July 22, 2011
CUNA appreciates the agency’s effort in this rule to protect immigrants who send workers’ remittances internationally, typically through the use of "closed-loop networks" operated by money transfer organizations (MTOs) such as Western Union, Vigo, MoneyGram, and others. CUNA, however, opposes the proposed rule’s application to "open networks" such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Fedwire, and international ACH systems because these "open networks" operate through the use of unrelated correspondent institutions and clearing houses that operate beyond the control of a credit union that originates these transactions. Finalization of this regulation as proposed with respect to open networks will have the unintended consequence of forcing many, if not most, credit unions to cease offering international wire and international ACH products to their members because of the proposal’s high compliance costs and excessive legal liabilities.

Joint Trade Association Comment Letter on Regulation E Remittance Transfers
July 25, 2011
CUNA, as well as The Clearing House Association L.L.C., the American Bankers Association, the Consumer Bankers Association. The Financial Services Roundtable, the Independent Community Bankers of America, the Mid-Size Bank Coalition of America, NACHA – The Electronic Payments Association, the National Association of Federal Credit Unions, and the Securities Industry and Financial Markets Association, submitted this joint comment letter to the Board of Governors of the Federal Reserve System in response to the Board’s proposed rule relating to "remittance transfers."

Regulation Z: Ability-to-Repay Mortgage Lending Rules
July 22, 2011
CUNA generally supports the proposed rule but believes that the agency should make several clarifications and modifications to the proposal to ensure continued consumer access to mortgage credit at fair rates and to avoid unnecessary regulatory burden and unintended consequences. We recognize, however, that many aspects of the proposal are statutory requirements set forth in the Dodd-Frank Act and that concerns about these requirements’ regulatory burdens are best directed to Congress.

Regulation CC: Availability of Funds and Collection of Checks
June 3, 2011
CUNA supports efforts to improve efficiency in the payments system but has significant concerns with the proposal. While one of the proposal’s objectives is to facilitate the further development of a fully-electronic check system, we have significant concerns that the proposal would substantially increase fraud-related and compliance costs if adopted. We do not support the proposed decrease in the reasonable additional extension hold from 5 to 2 business days. We believe the Board should not reduce the reasonable additional extension hold period. If the Board must reduce the reasonable additional extension hold period, such a reduction should only be made if there is sufficient evidence that there is no undue increase in fraud risk and loss exposure and the Board cannot be assured such an increase in fraud-related costs will not occur if the hold periods are shortened. Also, we generally believe the approach to increase the threshold to $200 for next business day availability is consistent with the new statutory requirement by the Dodd-Frank Act effective July 21, 2011.

Fed's Proposed Rule on Debit Interchange: Exclusivity arrangements and routing restrictions
May 2, 2011
CUNA urges the Federal Reserve Board to consider providing a substantial delay in the provisions on exclusivity arrangements and routing restrictions addressed in the Board’s proposal to regulate debit interchange fees and related issues. CUNA continues to support efforts in Congress to delay the implementation of the interchange amendment but as the Board continues to work on the final rule, we want to reinforce our very serious concerns and our recommended changes to protect small issuers from the full impact of the debit interchange rule, as Congress intended.

Regulation Z - Proposed Rule to Implement the Mortgage Escrow Account Requirements of Truth in Lending Act Section 129D
April 29, 2011
The Federal Reserve Board (Board) has proposed a regulation to implement the mortgage escrow account requirements of Truth in Lending Act (TILA) section 129D as added by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, this rule would change the requirements for when financial institutions must establish mortgage escrow accounts for higher-priced mortgage loans and also change mortgage escrow account disclosure requirements. CUNA urges the Board to use its authority to adopt more expansive definitions of "underserved" and "rural" that include areas that have been determined to be "underserved" or "rural" by other federal agencies such as NCUA. Also, CUNA seeks clarification regarding the operation of the proposed rule's "evasion" clause, as well as clarification regarding the proposed staff commentary on escrow accounts for condominium and for cooperative housing (coop) mortgages. We support the Board's proposed forced-placed insurance disclosure in light of the Dodd- Frank Act's statutory provision expressly requiring this disclosure. In addition, we urge the Board to allow creditors up to 75 days to establish escrow accounts under certain circumstances, and to set a compliance date no earlier than six to twelve months after the final version of the rule is published in the Federal Register to help ensure credit unions and other lenders will have sufficient time to implement these changes, particularly in light of other regulatory requirements they are facing. CUNA also urges the Board to clarify that the escrow account disclosures are not required for transactions secured by unimproved real property when a dwelling will not be constructed by the consumer purchasing the land.

Fair Credit Reporting Risk-Based Pricing (Credit Score Disclosures)
April 14, 2011
The Federal Reserve Board’s (Board’s) and Federal Trade Commission’s (FTC’s) proposed regulation will revise Section 615 of the Fair Credit Reporting Act (FCRA) to require that creditors using a credit score in risk-based pricing must disclose that credit score and other related information. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) provisions concerning these new disclosures take effect July 21, 2011.CUNA generally believes that the proposal is consistent with the new statutory requirements and will ultimately facilitate compliance with Section 615 of the FCRA. However, we urge the Board and FTC to delay the mandatory compliance of the credit score disclosures by at least 6 months or more to minimize compliance burdens and costs.

Regulation B (Credit Score Disclosures)
April 14, 2011
The Federal Reserve Board’s (Board’s) proposal would amend the model notices under Regulation B - Equal Credit Opportunity Act (ECOA) to incorporate the revisions to section 615 of the Fair Credit Reporting Act (FCRA) to require credit score disclosures in risk-based pricing. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) provisions concerning these new disclosures become effective July 21, 2011.CUNA generally believes that the proposed changes to Regulation B are consistent with the new statutory requirements and will facilitate compliance with the ECOA and the revisions to the FCRA. However, we urge the Board and FTC to delay the mandatory compliance of the credit score disclosures by at least 6 months or more to minimize compliance burdens and costs.

Joint Coalition Letter re Fed’s Debit Interchange Proposal
April 11, 2011
CUNA, along with eight other trade associations, filed a follow-up letter with the Federal Reserve Board regarding its proposed rule to regulate debit interchange fees. Although the comment deadline has passed, the trade associations believe it is appropriate to write to emphasize the extraordinary breadth and depth of organizations and government officials that have expressed concerns similar to those expressed by the trades. As described in our letter, we believe that such an unprecedented outpouring of concern makes the fundamental revisions of the proposed rule urged by the trade associations even more compelling. We particularly urge the Board to take into account the policy concerns of other federal regulators who are involved in the consultation process and the legal views expressed by the Department of Justice as the Board’s own counsel.

Joint Comment Letter on Fed's Proposed Rule on Debit Interchange
February 25, 2011
CUNA, together with other trade associations, submitted a 72-page comment letter to the Fed regarding its proposal on debit interchange. The letter asserts that the proposed rule must be fundamentally revised to avoid profound adverse consequences on consumers, the banking system, and the United States payments system and economy as a whole.

Interim Final Rules on Disclosures Required Under the Mortgage Disclosure Improvement Act
February 25, 2011
CUNA believes that the interim final rule’s modifications to the September interim rule are a positive step but that more should be done to make MDIA disclosures clearer to consumers and to reduce regulatory burden on credit unions.

Fed’s Proposed Debit Interchange Fee and Routing Regulations
February 22, 2011
The comments in this letter address certain legal issues raised in the proposal as they relate to credit unions that provide debit cards to their members. On behalf of these credit unions, we expressed extreme concern about the impact of the proposal on their members, their debit card programs, and their operations generally. CUNA believes the most reasonable action the Board could take would be to work with Congress to support a delay in the implementation of the proposal.

Regulation Z - Increasing the threshold for exempt consumer credit transactions
February 1, 2011
The Dodd-Frank Act amended the Truth in Lending Act (TILA) by increasing the threshold for exempt consumer credit transactions from $25,000 to $50,000 effective July 21, 2011. CUNA generally agrees that the Board’s approach to increase the threshold for exempt consumer credit transactions under Regulation Z is consistent with the new statutory requirement. However, we do not support certain changes to the staff commentary beyond the scope of the threshold increase, which are not necessary and will impose additional compliance and continuous monitoring costs. In addition, we urge the Board to minimize the rule’s compliance costs, particularly for small credit unions.

Regulation M - Increasing the threshold for exempt consumer leases
February 1, 2011
The Dodd-Frank Act amended the Consumer Leasing Act (CLA) by increasing the threshold for exempt consumer leases from $25,000 to $50,000 effective July 21, 2011. CUNA generally agrees that the Board’s approach to increase the threshold for exempt consumer leases under Regulation M is consistent with the new statutory requirement. However, we also urge the Board to minimize the regulatory burdens associated with the proposal particularly for small credit unions.

CARD Act Clarification
January 3, 2011
As described in CUNA’s letter to the Federal Reserve Board in response to the Board’s proposed clarifications to Regulation Z amendments implemented under the Credit Card Accountability Responsibility and Disclosure Act of 2009, CUNA supports several of the proposed clarifying amendments but opposes others that we believe are inconsistent with the CARD Act.

Federal Trade Commission (FTC)

Child Online Privacy Protection Act
December 22, 2011
The FTC proposal would revise the existing Child Online Privacy Protection Act (COPPA) rules established in 2000 to change their parental consent and disclosure requirements, among other things. CUNA supports the FTC’s efforts to protect children. We urge the agency, however, to modify several aspects of the proposal in order to make it easier for credit unions to obtain parental consent under the COPPA rules and limit unnecessary disclosure requirements. Credit unions frequently provide savings accounts and other limited services to children and seek to help them develop productive savings habits. Credit unions also provide children and other minors with financial literacy education that will serve them well as financial service users and borrowers. Many credit unions engage in youth outreach using CUNA’s Googolplex, a financial literacy website for young people, as well as the National Credit Union Foundation’s "Biz Kid$" financial literacy initiative that teaches children and teens about money and business.

Fair Credit Reporting Risk-Based Pricing (Credit Score Disclosures)
April 14, 2011
The Federal Reserve Board’s (Board’s) and Federal Trade Commission’s (FTC’s) proposed regulation will revise Section 615 of the Fair Credit Reporting Act (FCRA) to require that creditors using a credit score in risk-based pricing must disclose that credit score and other related information. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) provisions concerning these new disclosures take effect July 21, 2011.CUNA generally believes that the proposal is consistent with the new statutory requirements and will ultimately facilitate compliance with Section 615 of the FCRA. However, we urge the Board and FTC to delay the mandatory compliance of the credit score disclosures by at least 6 months or more to minimize compliance burdens and costs.

Motor Vehicle Roundtables
March 29, 2011
We urge the FTC to apply consistent consumer protection rules for motor vehicle dealers offering motor vehicle financing, in order to achieve a level playing field for all entities providing motor vehicle lending or lease arrangements. Consistent consumer protection requirements for all providers of car loans or leases are needed because motor vehicle dealers are the single point of contact for many consumers during the financing process.

Financial Accounting Standards Board (FASB)

Credit Impairment Proposal
April 1, 2011
CUNA believes that the Financial Accounting Standards Board’s proposed Supplementary Document on impairment of financial instruments is more appropriate for large publicly traded entities than small cooperatively owned financial institutions. We appreciate FASB’s recognition of the potential weaknesses of the existing impairment model. However, we have some concerns with major aspects of the proposed Supplementary Document. In light of those concerns, as well as a number of unanswered operational questions not addressed in our letter, we urge FASB to consider extending the comment period to allow adequate time for stakeholders and the Board to fully consider the application of the proposed changes and to identify unintended consequences.

Financial Crimes Enforcement Network (FinCEN)

Proposal to Require Electronic Filing of Bank Secrecy Act (BSA) Reports
November 15, 2011
CUNA supports FinCEN’s objectives to provide law enforcement with more useful and timely BSA data and we encourage credit unions to use electronic filing features. However, we have concerns regarding compliance and implementation costs because we fear a number of credit unions would incur significant costs to meet the requirements of the proposal, including upgrades to their core processing systems and training. FinCEN should permit institutions to apply for a waiver from the BSA electronic filing requirement if they are able to demonstrate that they will incur substantial core processing or system costs relative to their budgets. In addition, FinCEN should provide an exemption for smaller credit unions with less than $50 million in assets from the electronic filing requirement to minimize compliance burdens for these institutions that have limited staff and limited BSA filings.

Renewal of Bank Secrecy Act Recordkeeping Requirements
August 8, 2011
In general, CUNA supports FinCEN’s renewal of the recordkeeping requirements. However, we are concerned with the accuracy of FinCEN’s burden estimates. In addition, we ask FinCEN to conduct some sort of quantitative breakdown of how certain reporting data is used, similar to that provided for Suspicious Activity Report (SAR) filings.

Internal Revenue Service (IRS)

IRS Notices Revoking Credit Unions’ Tax-Exempt Status
September 15, 2011
In response to the IRS’s Exempt Organization Division’s recent letters to various credit unions stating that they are no longer considered tax exempt organizations, CUNA sent a letter to the IRS requesting the IRS To take immediate action to correct this error. CUNA assumes that this is simply a paperwork error because such a conclusion is completely unwarranted. Although many state-chartered credit unions’ IRS Form 990s were, at one time and in some states, filed as group returns by state regulators or central groups, the practice was terminated years ago. When the group filings ceased, state-chartered credit unions began filing their own returns, and have filed consistently since then. IRS releases have made clear that certain organizations, such as credit unions, may establish their tax exempt status through filing the Form 990 return without the need for filing a separate application for tax exempt status. Credit unions have met their filing obligations and should not be receiving these notices revoking their tax-exempt status.

Refinement of Redesigned IRS Form 990
July 28, 2011
CUNA believes the revised Form 990 is an improvement over previous versions of the Form, but there is still room for improvement. CUNA recommends several changes to Form 990 to simplify the reporting process and reduce burden on 990 filers associated with recordkeeping. In regard to former directors, we believe the $10,000 reporting threshold is much too low and ask the IRS to increase the threshold to $100,000. In addition, we recommend the look-back period for compensation to former individuals be reduced from five years to two years, which should apply to the compensation reporting requirements of all former individuals, including officers, key employees, highest compensated employees, and directors. Lastly, we ask the IRS to consider revising the requirement to report the compensation of the "top 20 highest compensated key employees" by reducing it from 20 employees to five employees, as well as by changing the language so the requirement applies to the highest compensated individuals, regardless of "key" employee status.

Guidance on Reporting Interest Paid to Nonresident Aliens
April 7, 2011
CUNA strongly opposes the IRS’s efforts to expand reporting requirements for interest paid to nonresident aliens for the following reasons: Credit unions, as financial institutions, already shoulder a significant compliance burden as the result of current IRS reporting requirements and are among the most heavily regulated financial institutions. The proposed rule would increase compliance costs for credit unions and, in turn, their members. Additional IRS reporting requirements should be imposed only when the agency has clearly demonstrated that doing so is essential to implement statutory tax code requirements. The IRS has not shown that this rule is necessary to implement any such statutory requirements, nor has it provided a compelling reason why the expanded reporting requirements are necessary

NACHA (Electronic Payments Association)

Expedited Processing and Settlement (EPS)
December 12, 2011
CUNA appreciates NACHA’s objective to provide a new premium same-day, expedited payment service on the ACH network. However, we believe not all receiving financial institutions should be required to receive and post same-day ACH payments because of significant implementation and risk management concerns, especially for smaller credit unions and other financial institutions. Instead, NACHA should permit credit unions and others to opt in to the new EPS service or conduct a pilot program first to study the extensive effects of the proposal before taking further action.

"Pain Points" or Problem Areas - Part II
August 19, 2011
CUNA generally supports NACHA’s proposal to clarify and reduce additional "pain points," areas of misunderstanding, or problems on the ACH network as part of the Rules Simplification Initiative. However, we have concerns about additional compliance and implementation costs and have asked NACHA to clarify certain aspects of the proposal. The proposal would: require written authorization for debit entries to a business account if there is no existing contract or relationship; provide a new return reason code to stop all future payments; remove the current requirement of separate Web Initiated-Entry exposure limits for originating depository financial institutions (ODFIs); remove the current requirement that an ODFI must suffer a loss to dishonor an untimely return; and broaden the scope of the Accounts Receivable entries to permit the conversion of a greater variety of checks.

Risk Management Enhancements
June 24, 2011
CUNA appreciates NACHA’s efforts to improve the risk management of the ACH network. We generally agree with the proposed changes to improve risk management, including an "excused delay" modification to limit systemic risk in the case of a failed financial institution; a prohibition on sharing or "data passing" of customer account or routing numbers; the suppression of full Social Security numbers; and a reduction in an originating depository financial institution's (ODFI’s) threshold for returns. However, we have concerns about additional compliance burdens and offer recommendations for NACHA's consideration to minimize costs to ODFIs and receiving depository financial institutions.

Corporate Account Takeover
June 10, 2011
While we generally agree with the proposal to improve the risk management of suspected corporate account takeovers, we have concerns about additional compliance burdens and overlap with other data security regulations and existing agreements between financial institutions. We generally agree with the proposed funds availability exception that would provide a credit union or other receiving depository financial institution (RDFI) additional time to investigate an ACH credit entry suspected of a corporate account takeover prior to making funds available to a Receiver.

ACH Security Framework
March 25, 2011
CUNA appreciates NACHA’s efforts to improve the security and integrity of the ACH network. However, while we generally agree with NACHA’s objective to improve the security and integrity of sensitive ACH data, we have concerns about additional compliance burdens and overlap with other data security regulations. We believe that ODFIs should not be required to complete a separate, annual self-assessment for only sensitive ACH data. Instead, we recommend that ODFIs could assess their sensitive ACH data as part of an existing compliance requirement for overall ACH risk management.

Obama Administration

Executive Order On Improving Regulation and Regulatory Review
January 20, 2011
CUNA strongly supports President Obama’s Executive Order on Improving Regulation and Regulatory Review. The order applies to executive branch agencies and would not include independent agencies, such as the National Credit Union Administration. Nonetheless, because of the severe impact of regulations on businesses and our economy regardless of their source, CUNA urges the Obama Administration to look for ways to encourage all independent agencies to consider the principals and basic approach to regulation that are so clearly addressed in the order.

Office of Government Ethics (OGE)

Proposed Amendments Limiting Gifts from Registered Lobbyists and Lobbying Organizations
October 5, 2011
CUNA was among over 400 associations to sign onto the American Society of Association Executives’ (ASAE) letter filed with the Office of Government Ethics (OGE) in response to OGE’s proposed rule that would limit the exceptions that executive branch employees are permitted to rely on when accepting gifts from registered lobbyists or lobbying organizations. We fully support OGE’s mission to promote high ethical standards for federal government employees, and we are generally accepting of OGE’s intention to limit some of the exceptions that may be relied upon in certain instances. However, there are some unintended consequences for trade associations in OGE’s proposal, such as the implication that trade associations use invitations to events as a means of cultivating access by registered lobbyists makes it unlikely federal employees would pay out-of-pocket to attend these types of programs and events, even if they would benefit from attending. Another unintended consequence of the proposal could be that it causes trade associations to deregister as lobbyists so as not to fall under the restriction on gifts such as widely attended gatherings. Therefore, we urge OGE to revise its proposed changes to exclude trade associations from the restrictions describe in the proposal.

Office of Management and Budget (OMB)

Qualitative Testing of Integrated TILA-RESPA Mortgage Loan Disclosure Forms
May 5, 2011
CUNA supports the general design of the proposed CFPB study on integrating the TILA and RESPA forms, including the CFPB's outreach to credit unions and other lenders as part of the testing process. We believe that this study will have significant utility with respect to understanding TILA and RESPA regulatory compliance burdens on credit unions. However, we believe that the quality and utility of the CFPB's study would be enhanced if it included at least one testing panel comprised entirely of credit union lending professionals. Credit unions' unique not-for-profit, cooperative structure and credit unions' regulation by the National Credit Union Administration Board (NCUA Board) make them fundamentally different from for-profit lenders and brokers.

Securities and Exchange Commission (SEC)

Definitions of "Swap Dealer" and "Security-Based Swap Dealer"
February 22, 2011
CUNA believes that the Federal Home Loan Banks (FHLBs) should be excluded from the definitions of a "swap dealer" and a "security swap dealer." Without such an exemption, FHLBs are likely to significantly decrease or eliminate the products credit unions and other FHLB-member financial institutions use to hedge interest rate and similar risks.

Exception to Mandatory Clearing of Security-Based Swaps
February 4, 2011
CUNA supports the Commission’s "Additional Rule Text" in subsections (b) and (c) of the proposal, which would exempt credit unions and other end-user depository institutions with fewer than $10 billion in assets from the proposal’s mandatory swaps clearing requirements. We believe that the $10-billion asset threshold for the exemption should not be lowered. We would prefer it to be higher. However, we recognize that under the Exchange Act the Commission cannot adopt a higher threshold. Nevertheless, we question whether coverage under the Dodd-Frank Act’s provisions on mandatory clearing of securities-based swaps should be based on asset size alone. We think credit unions should be covered only if they have at least $10 billion in assets and transact significant volumes of securities-based swaps, with "significant volume" to be defined by the Commission consistently with the Exchange Act and other relevant regulations.

Small Business Administration

Preliminary Plan for Retrospective Analysis of Existing Rules
July 22, 2011
CUNA appreciates the SBA’s efforts in attempting to reduce, and/or eliminate those rules that are obsolete, unnecessary, unjustified, excessively burdensome, or counterproductive, as part of its overall efforts to make its regulatory program more effective and less burdensome. We generally agree with the proposed retrospective review plan, and are encouraging the SBA to consider specific paperwork burden reduction initiatives surrounding the 7(a) Loan Program. Additionally, we are urging the SBA to focus on specific prioritization factors and processes surrounding the selection of rules to be reviewed, as outlined within the plan.

150x172_Annual Report 2013Unite for Good Share your Stories100 Million CU Memberships