WASHINGTON—NCUA Chairman Rodney Hood shared updates on several issues, including data privacy, regulatory relief, consumer protection, and fintech, at an event at the Exchequer Club. Separately, NCUA Board Member Todd Harper met with credit unions in the Carolinas.
Hood indicated cyber security and data privacy are top concerns within the agency, alluding that data is important to promote financial inclusion and increase growth while also stressing the importance of empowering consumers to control their data. Hood expressed concerns that rules could be created without regard to consequences and predicted that smaller institutions may have difficulty complying with varying state standards, reported NAFCU, which had staff attending the event.
Hood said he will take his concerns to the Federal Financial Institutions Examinations Council (FFIEC) at the next meeting and begin to work toward providing opportunities for guidance on how to uniformly examine for data privacy compliance.
BSA and AML
While discussing the FFIEC, Hood touched on Bank Secrecy Act (BSA)/anti-money laundering (AML) compliance, including reporting requirements for current transaction reports (CTRs) and suspicious activity reports (SARs). Hood also discussed the FFIEC's advances in increasing awareness and providing guidance under the current expected credit loss standard – specifically for life of loan projections – as well as a project to clarify Regulation Z requirements for the computational values of APR to increase uniformity.
Other issues Hood discussed included mergers with banks – including an upcoming rulemaking and guidance from the agency on the process – and credit union partnerships with fintech. Hood also explained the agency’s focus on consumer protection and said that the NCUA’s examination and regulatory compliance efforts are created with consumer protection in mind.
NCUA’s Hood Meets With Carolinas CUs
Separately, NCUA Board Member Todd Harper participated in a Credit Union Roundtable hosted by Coastal Credit Union in collaboration with the Carolinas Credit Union League, and stressed the need for NCUA to hear “credit union stories.”
Coastal CU President/CEO Chuck Purvis and other staff from CCU were joined by representatives of American Partners FCU, ElectTel Cooperative FCU, Lion’s Share FCU, Local Government FCU, Marine FCU, Members Credit Union, NC Community FCU, Truliant FCU and Weyco Community CU.
In his opening greetings, CUNA reported Harper emphasized, “It’s important to hear the stories of the credit union system. They help inform my decisions as a board member.”
Stories Shared
According to participants, some of the stories shared during the meeting included:
- Marine FCU’s liaisons are made up of retired Marines who provide on-base financial counseling, teaching young Marines how to budget once they’re discharged for things the Corps had been providing, such as food, transportation and housing
- Members Credit Union’s partnership with local schools to provide financial education for students and teachers, including the new student-run branch in Davie County High School, which provides the students with paid internships when they work there
- American Partners FCU, which helped an immigrant woman – whose husband abandoned her and their three young children – stay in their home by refinancing her loan. The woman made only $18,000 a year as a school custodian and was paying an $1,100 monthly mortgage. When she sought help from her bank, she was turned away due to lacking good credit. American Partners found a way to change that loan to a 12-year note with a monthly payment of $400, keeping her family in their home
Harper’s Priorities
Harper said his priorities include addressing the subordinated debt rule to get additional sources for risk-based capital and cybersecurity, CUNA said.
During the open dialogue, Harper fielded questions about some modernization issues, among them, ACET, the Automated Cybersecurity Examination Tool; NCUA Connect, the new user portal, and MERIT, the Modern Examination and Risk Identification Tool.
Harper said MERIT would be rolled out in stages following training of NCUA staff. He expressed the hope that it would become similar to a TurboTax process of filing reports.
Concern Over CECL
Meanwhile, Members Credit Union President/CEO Bob Donley expressed reservations around Current Expected Credit Losses (CECL), stating, “NCUA is the primary user of our data. The loss allowance model we’ve used forever is not the problem.”
Coastal CFO Tami Langton added that the loans, services and aid to low-income members would be negatively impacted because of CECL, perhaps forcing consumers to payday lenders.
Donley agreed, “It’ll keep us from serving the members we were created to serve.”