WASHINGTON—Both credit union trade associations are expressing strong concerns over new data gathering aspects of Treasury’s Emergency Capital Investment Program (ECIP).
The proposed Quarterly Supplemental Report (QSR) would require ECIP participants to collect store, and report racial and ethnic demographic information on every loan and report without use of proxies.
In its letter, NAFCU Senior Counsel for Research and Policy Andrew Morris urged the Treasury Department to reconsider the scope of the information collection to limit detailed demographic reporting to only Home Mortgage Disclosure Act (HMDA) reportable mortgage loans.
In addition, Morris asked Treasury to provide more guidance on how demographic information should be collected.
If the Treasury Department opts not to alter the scope of the information ECIP participants need to collect, Morris asked the department to provide a longer grace period in alignment with the phase-in of theCFPB's small business data collection rule implementing section 1071 of the Dodd-Frank Act.
‘Deep Concerns’
Similarly, CUNA said it has “deep concerns” with certain provisions in the proposed Quarterly Supplemental Report, saying there has been no guidance from Treasury or other regulators on how to establish and implement the required processes.
“CUNA welcomes Treasury’s efforts to assess the success of the ECIP through reporting; however, if the QSR is finalized as proposed, the burden and risks posed to ECIP-awardee credit unions far outweighs the benefits of the data sought by Treasury and, for some, the benefits of the ECIP award itself,” the letter reads. “CUNA urges Treasury in the strongest possible terms to not finalize a requirement for ECIP-awardee credit unions to implement the collection, storage, and reporting of actual demographic data on all loans.”
No Sharing
CUNA added that the information was not shared with credit unions in the application, initial reporting, or agreement involving ECIP funds, and noted the numerous litigation, compliance, operational, and reputational risks associated with implementing processes to collect he data.
“ECIP-awardee credit unions simply should not be asked to formulate the processes and procedures for a massive new data collection requirement with no guidance from their examiners or rulemaking authorities, to bear the cost of designing these systems alone, to do so under an expedited timeline, and to be told they have no choice because they unknowingly agreed to it when they accepted ECIP funds,” the letter reads.
Additional Points Raised
Other points made by CUNA in its letter include:
- The statutory language is “insufficient to eliminate all fair lending risk regarding the collection of demographic data, particularly protection from the Equal Credit Opportunity Act’s private right of action.”
- Treasury must “work with the CFPB and NCUA to establish a framework prior to implementing a requirement to collect demographic data, which should include a full rulemaking process.”
- The requirement to collect demographic data on all loans will “harm member trust in ECIP-awardee credit unions.”
- The requirement to obtain demographic data may have “significant implications for the cost of credit for ECIP-awardee credit union members
- The timeline for implementation of demographic data requirements is not reasonable, as the procedures must be established by July 1, 2024. This is 15 months, compared with the 26 months allotted for the Home Mortgage Disclosure Act. The shortest CFPB rulemaking implementation period has been 18 months.”
- Treasury should make the collection of data on non-HMDA loans voluntary.
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