WASHINGTON—Federal agencies, including NCUA and the CFPB, have released their updated regulatory agendas.
The CFPB said it anticipates publishing a final rule in October 2023 to amend its rules implementing the CARD Act related to penalty fees levied by card issuers, including the safe harbors for penalty fees.
That contentious issue is one that has received considerable pushback from credit unions and other financial institution groups.
Other items of note on the Spring agendas for the two agencies.
NCUA
- Investment and Deposit Activities. This item has been listed in several previous agendas and the NCUA now has it listed for a proposed rule in October 2023, NAFCU noted in its analysis.
- Digital Assets. NCUA says it will carefully review the comments from its previous request for information (RFI) on this issue and any studies related to President Biden’s Executive Order to determine what, if any, proposals should be forthcoming
- Share Insurance Rules. The proposal, planned for July 2023, would simplify the share insurance regulations by establishing a “trust accounts” category that governs coverage of shares of both revocable and irrevocable trust. “This change aims to ensure consistent share insurance treatment for all mortgage servicing account balances held to satisfy principal and interest obligations to a lender,” NAFCU noted. The FDIC has already adopted a similar final rule.
Final Rules
NCUA further said it anticipates issuing final rules on several issues yet this year.
- Bank Secrecy Act (BSA). The proposed rule modified the requirements for federally insured credit unions (FICUs) to file Suspicious Activity Reports (SARs) and would amend the NCUA’s SARs regulation to allow the board to issue exemptions from the requirements of that regulation in order to grant relief to FICUs that develop innovative solutions to meet the requirements of the BSA
- Subordinated Debt. The proposed rule would eliminate the maximum maturity requirement in favor of a requirement that credit unions demonstrate how issued notes are considered to be debt and would extend the regulatory capital treatment of grandfathered secondary capital
- Fintech. As CUToday.info has reported, in December 2022, NCUA issued a proposed rule, which appeared to incorporate the previously separate rulemaking item related to the Purchase, Sale, and Pledge of Loans proposed rule. As NAFCU reminded, the rule is intended to clarify the NCUA’s regulations and provide FICUs with flexibility to utilize advantaged technologies and opportunities offered by the fintech sector, specifically through indirect lending arrangements and indirect leasing arrangements.
- ACCESS Initiative: Chartering and Field of Membership Regulations. The proposed rule would streamline the chartering and charter conversion process, expand credit union membership eligibility for remote workers and underserved areas, and expand membership eligibility for the immediate family of deceased credit union members
- Federal Credit Union Bylaws. The proposed rule would implement the member expulsion process created by the Credit Union Governance Modernization Act, which became law in 2022
CFPB
CFPB also plans to address overdraft fees (an issue that was the subject of congressional scrutiny this week during hearings), as well as fees for insufficient funds, with pre-rule activity for both anticipated in November 2023.
The Bureau said it also intends to begin pre-rule activity related to the Fair Credit Reporting Act in November. Other upcoming rulemakings of note:
- Section 1033 on Personal Financial Data Rights. In October 2022, the Bureau released materials in advance of convening a panel under the Small Business Regulatory Enforcement Fairness Act (SBREFA). The bureau published its SBREFA report in April 2023 and expects to issue a notice of proposed rulemaking (NPRM) in October 2023, NAFCU noted
- Supervision of Larger Participants in Consumer Payment Markets. Under Section 1024 of the Dodd-Frank Act, the Bureau said it is authorized to supervise certain nonbank covered persons for compliance with federal consumer financial laws and for other purposes. Provisions within the section limit the Bureau’s authority in certain markets to supervision of only “larger participant[s]”
FHFA
- Enterprise Regulatory Capital Framework. The final rule, expected in August 2023, would address capital requirements for a number of the government-sponsored enterprises’ (GSE) exposures, including derivatives, market risk, multifamily loans in general and multifamily loans with government subsidies specifically, and exposures of a GSE to the other GSE. The rule would also encompass enhancements to the advanced approaches for credit risk and technical corrections
Financial Crimes Enforcement Network (FinCEN)
- National Defense Authorization Act (NDAA)-related provisions:
- Section 6403 of the Anti-Money Laundering (AML) Act: FinCEN plans to issue a proposed rule in November 2023 revising the customer due diligence requirements for financial institutions
- Section 6101 of the AML Act: The AML Act required FinCEN to finalize regulations by January 2022. A proposed rule setting the national examination priorities has been delayed several times; it was originally scheduled for August 2021 and is now set for December 2023, NAFCU said
- Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities: FinCEN published a proposed rule that would establish protocols to protect the security and confidentiality of the beneficial ownership information (BOI) that will be reported to FinCEN pursuant to Section 6403 of the Corporate Transparency Act (CTA) and would establish the framework for authorized recipients’ access to the BOI reported. The proposed rule would also specify when and how reporting companies can use FinCEN identifiers to report the BOI of entities
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