ARLINGTON, Va.–The new Congress may be getting the attention, but credit unions should also be paying as much if not more attention to the newly released rulemaking agendas from NCUA, the CFPB and other regulators, according to one person.
As CUToday.info reported here, those agencies plus FinCEN belatedly released their upcoming agendas, indicating where they will be focused this year.
NAFCU Vice President of Regulatory Affairs Ann Petros noted that at the top of NCAA's list is an item related to climate risk and financial risks posed by climate change. She said the agency’s interest at this point is “pre-rule” as it gathers additional information from CUs and CUSOs on the effects climate may have on the share insurance fund.
“We've seen from other banking regulators an effort to encourage especially the largest banks to undergo scenario analysis, so this is sort of a longer-term precedent of the capital and other measures of an institution’s ability to withstand shocks from…disasters like hurricanes and other climate related issues,” said Petros. “NCUA is focused primarily on transition risk and physical risk here so we anticipate that some of the questions may evaluate some of the points that we've recently seen made by the FDIC chair with respect to community banks and how they should be looking to better understand the climate risks facing those their institutions and how those risks may evolve.”
The NCUA Focus
In addition, Petros said NCUA indicated it will also be looking at other issues, including:
- Its proposal around automated valuation models, which is out for comment and which the agency is working with regulators on. Petros said NAFCU has supported efforts around quality control standards of VMs by mortgage originators and secondary market issuers.
- The potential for some sort of digital assets proposal. “NAFCU has been on the forefront of advocacy related to digital assets and credit unions involvement and having a seat at the table,” said Petros. “We're really eager to see what the NCAA has gathered from its request for information related to digital assets and how they're thinking about this topic, especially as recently the news has been somewhat, let's say, detrimental for the digital assets industry.
The CFPB Focus
Meanwhile, Petros reminded the CFPB has also outlined a number of rulemakings on its agenda namely related to fees, and in particular, overdraft fees and nonsufficient funds fees. “These are both pre-rule items and they're just trying to gather information as to whether the CFPB should revise Regulation C with respect to the special rules for determining whether overdraft fees are considered finance charges,” Petros said. “That could have some really impactful consequences for the financial services industry…The Bureau thinks that there's really no value here, that consumers are not receiving a service at all in exchange for the NSF fee.”
Petros added NAFCU is also watching for a CFPB proposal around credit card penalty fees that is on its rulemaking agenda for January. “We have objected to any sort of change in the safe harbor for the limit for late fees related to credit card payments, so we're very curious to see what route the CFPB ends up taking.
Also Worth Watching
One other issue out of the CFPB that deserves watching, according to Petros, is its business lending data collection rulemaking.
“We're hoping that at least the thresholds for institutions that are covered under the rule will be increased from the proposal of 25, which we think is exceptionally low and will actually lead to reduced access to loans,” Petros said.
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