2008 CUNA Comment Letters

NCUA Outreach Task Force Report
April 29, 2008

Comments on ANPR for Parts 708a and 708b, Credit Union Corporate Governance Issues
April 18, 2008
This letter responds to the National Credit Union Administration Board’s Advance Notice of Proposed Rulemaking issued in January that sought comments on issues regarding the regulation of mergers, conversions to another type of financial institution, and terminations of federal share insurance. The comments reflected in this letter were developed after thorough consideration by CUNA’s Federal Credit Union Subcommittee, Examination and Supervision Subcommittee, Community Credit Union Committee, Governmental Affairs Committee, and our Executive Committee. CUNA strongly opposes any new regulation in this area at this time

Proposed FACT Act Rules and Guidelines on the Accuracy of Credit Information
February 7, 2008
This letter responds to proposed rules and guidelines that the National Credit Union Administration, the Federal Trade Commission, and other agencies are required to develop under provisions of the Fair and Accurate Credit Transactions (FACT) Act. These guidelines and rules are intended to enhance the accuracy and integrity of information that is furnished to the credit bureaus. The proposal outlines two approaches. CUNA favors the approach in which the definitions of “accuracy” and “integrity” are included within guidelines instead of within the rules, although we are concerned with how these terms are defined. CUNA also supports the proposed circumstances in which furnishers of credit information must investigate disputes based on a direct request from the consumer, and urges the agencies to review the cumulative burden of all the rules issued under the FACT Act. CUNA also requests that the rules not be mandatory for at least 18 months after the rules are issued in final form.

Real Estate Settlement Procedures Act (RESPA)
May 14, 2008
In our comment letter in response to proposed changes to the Real Estate Settlement Procedures Act (RESPA) rules, CUNA opposes the provisions that require certain disclosures to be read aloud to the borrower, the changes that will lengthen the Good Faith Estimate (GFE) from one to four pages, and the time deadlines for providing the GFE or notice if the loan request is rejected. CUNA also requests clarification of the circumstances in which closing costs may be increased and supports provisions that will allow creditors to remedy violations of these provisions.

Home Valuation Code of Conduct
April 30, 2008
CUNA submitted comment letters to both Freddie Mac and Fannie Mae in response to the new Home Valuation Protection Code in which Freddie Mac and Fannie Mae will buy loans only from financial institutions that meet new standards that are intended to ensure independent and reliable appraisals. CUNA outlines a number of concerns with regard to the requirement that staff may not be involved in the appraisal process and the new requirement in which financial institutions will be required to maintain a telephone hotline that will address appraisal problems.

Home Valuation Code of Conduct
April 30, 2008
CUNA submitted comment letters to both Freddie Mac and Fannie Mae in response to the new Home Valuation Protection Code in which Freddie Mac and Fannie Mae will buy loans only from financial institutions that meet new standards that are intended to ensure independent and reliable appraisals. CUNA outlines a number of concerns with regard to the requirement that staff may not be involved in the appraisal process and the new requirement in which financial institutions will be required to maintain a telephone hotline that will address appraisal problems.

NACHA Management Assessment and Compliance Audit Proposals
February 27, 2008
CUNA provides comments in response to NACHA's request for comments its risk management and assessment and compliance audit proposals. NACHA is proposing to broaden the scope of its Operating Rules on risk management to incorporate specific requirements for conducting an overall annual assessment of ACH risk.

Comment on Certification of Entities as CDFI
February 25, 2008
CUNA filed a comment letter with the Community Development Financial Institution (CDFI) Fund providing suggestions to improve the process involved in certifying a financial institution as a CDFI. CDFIs are a unique class of institutions that receive certain benefits from the government, it is thus very important that the certification process be comprehensive yet efficient. Overall, in its letter, CUNA urges the CDFI Fund to reduce certain formalities and restrictions involved in the certification process, making certification easier for some institutions.

Proposed Rule to Amend Regulation Z Home Mortgage Provisions.
April 8, 2008
In the comment letter submitted in response to the Federal Reserve Board’s proposal that would significantly change the Regulation Z mortgage loan rules, CUNA questioned the threshold used for determining whether a loan is "high-priced" and, therefore, subject to additional restrictions. However, CUNA agrees that lenders should consider the borrower’s ability to repay the loan, supports the use of escrow accounts, and suggests further restrictions on the use of prepayment penalties. CUNA also supports a number of other provisions that address appraisers, servicing abuses, and advertising practices.

Proposed Amendments to Reserve Requirements of Depository Institutions
March 28, 2008
This letter comments on the Federal Reserve Board's proposal on Regulation D, Reserve Requirements of Depository Institutions. CUNA urges the Board to work with financial institutions to reduce reserve requirements to zero, which will be within its statutory authority, under the Financial Services Regulatory Relief Act of 2006 effective in 2011. CUNA supports the proposed amendments and seeks clarification that deposits would still be classified as "savings deposits" not subject to reserve requirements under certain proposed conditions.

Proposed FACT Act Rules & Guidelines on the Accuracy of Credit Information.
February 7, 2008
This letter responds to proposed rules and guidelines that the National Credit Union Administration, the Federal Trade Commission, and other agencies are required to develop under provisions of the Fair and Accurate Credit Transactions (FACT) Act. These guidelines and rules are intended to enhance the accuracy and integrity of information that is furnished to the credit bureaus. The proposal outlines two approaches. CUNA favors the approach in which the definitions of “accuracy” and “integrity” are included within guidelines instead of within the rules, although we are concerned with how these terms are defined. CUNA also supports the proposed circumstances in which furnishers of credit information must investigate disputes based on a direct request from the consumer, and urges the agencies to review the cumulative burden of all the rules issued under the FACT Act. CUNA also requests that the rules not be mandatory for at least 18 months after the rules are issued in final form.

Proposed Structural Changes to FASB
February 13, 2008
CUNA filed a comment letter with the FASB urging the Financial Accounting Foundation (FAF) to reconsider some proposed changes to the structure and operations of the FASB. The letter, developed with CUNA's Accounting Task Force Chairman Scott Waite, disagrees with some of the proposed changes. Specifically, the FAF has proposed decreasing the size of the FASB from seven to five members, and limiting to one the number of invidiuals with expertise in certain areas, such as auditing and financial statement preparation. CUNA is concerned that these proposed changes would not result in their intended effect, of increasing efficiency, but may result in a decreased representation of concerns common to credit unions. Lastly, CUNA urges the FAF to provide a more thorough explanation to stakeholders of how its changes will improve its oversight and the processing of accounting issues before advancing this proposal.

Delay of FIN 48
January 18, 2008 CUNA filed a comment letter with FASB strongly supporting a delay in the application of FIN 48 to state chartered credit unions. The letter, developed with CUNA's Accounting Task Force Chairman Scott Waite, notes that FIN 48 would apply to UBIT for state chartered credit unions. FIN 48 provides guidance to entities as to how they should recognize a potential tax, such as UBIT, when the precise amount of the tax liability is uncertain. The letter not only supports the deferral of FIN 48, which has raised questions for FASB as well as for credit unions and accountants, but also seeks clarification that credit unions should qualify for the deferral even if they have already provided GAAP financial statements to NCUA or a state regulator. FASB proposed to allow the deferral only if entities had not provided the information to a third party. CUNA's letter strongly recommends that regulators not be considered as "third parties" for purposes of the delay, as they are not the entities that FASB was seeking to address.

Military Lending Rules
February 15, 2008
In our letter to the Department of Defense in response to their request for feedback on the recent military lending rules, CUNA emphasizes that the rule meets the objectives of targeting specific loan products, such as payday loans, vehicle title loans, and refund anticipation loans. CUNA also stresses that no further changes are needed at this time and that financial education is an important weapon in the fight against predatory lending.

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