The weekly recap featuresnews on regulatory actions, mergers and other issues facing the credit unionspace. Send tips, ideas and chatter to firstname.lastname@example.org.
* Inan interview withS&P Global Market Intelligence at the National Association of State CreditUnion Supervisors' annual summit in Chicago, National Credit UnionAdministration Chairman Rick Metsger spoke about the regulator's memberbusiness lending rule, which eliminated many thresholds on commercial lendingin favor of "principle-based" regulation. Metsger said he was notsurprised that the banking industry reacted as strongly as it did to the rule."That someone would criticize a rule before they even saw it tells youthat it's an ideological position of theirs that has nothing to do with thefacts," he said. In the second part of the interview, Metsger spoke about theongoing consolidation of the industry, saying the worst-case scenario would beif only a handful of mega-credit unions ultimately survive.
*With smartphone penetration now sitting at about 80% in the U.S., credit unionsare increasingly offering mobileand other technology to remain relevant to customers. In 2010,66.3% of credit unions offered internet banking, while only 9.8% offered mobilebanking. But by 2016, 76.3% of those institutions offered banking via theinternet and 52.3% had adopted mobile. An S&P Global Market Intelligencestudy found that 99% of credit unions between $100 million and $1 billion inassets offered the three most common electronic financial services: accountbalance inquiry, the ability to view account history and internet-basedbanking. At the same time, 97% of credit unions larger than $1 billion offeredthose services, while only 68% of the smallest credit unions in the countryoffer internet-based banking.
*Also during the NASCUS summit, NCUA board member J. Mark McWatters said hehopes to have a final field ofmembership rule by the end of 2016. "It won't be perfect, butit will be progress," he said.
*The NCUA might move some federal credit unions with less than $1 billion in assetsto an extended examinationcycle in 2017. The recommendation, which was suggested by theagency's Exam Flexibility Initiative working group and will apply towell-managed, low-risk federal credit unions, is pending approval from the NCUAboard. The group made 10 recommendations, which the board plans to considerduring its Nov. 17 open meeting as part of the agency's 2017-2018 budget. Ifthe board approves, the extended exam cycle recommendation will take effectJan. 1, 2017.
*The Consumer Financial Protection Bureau finalized that would requirefinancial institutions to limit consumer losses on stolen or lost cards,resolve reported transaction errors, and give consumers free and easy access toaccount information. The new rule also finalized new "Know Before YouOwe" disclosures that would clarify fees and other key details associatedwith a prepaid account.
*Democrats on Oct. 5 urged federal regulators to strengthen executivecompensation clawbackrules following the scandal at Wells Fargo & Co. A group of 11 Democratic membersof the House Financial Services Committee, including Ranking Member MaxineWaters, D-Calif., signed the letter, which was jointly addressed to the FederalReserve, the OCC, the FDIC, the SEC, the Federal Housing Finance Agency and theNational Credit Union Administration.
*NCUA Chairman Rick Metsger sent a letter to the CFPB saying the NCUA's paydayalternative loan rules protect consumers, and he has asked the CFPB to fullyexempt those loansfrom its final payday lending rule. Metsger said payday alternative loansoffered by federal credit unions are a safer, more affordable product thantypical payday loans. "We respectfully request the bureau exempt FCUscompletely from its final rule for loans made under and consistent with NCUA'sPALs regulation," Metsger said in his letter. "As the prudentialregulator for federal credit unions, NCUA already ensures that members receivethe type of protections the Bureau is seeking to address. The Bureau shouldtherefore defer to determinations of the FCU prudential regulator about thisproduct."
*The Credit Union National Association last week also weighed in on the CFPBsmall-dollar rule, saying it would hurt millions of Americans. CUNA urged thebureau to withdraw itsproposal or exempt credit unions as a class due to the many consumer dangers inthe proposed rule. In lieu of that, CUNA asked the bureau to consideraddressing the substantial shortcomings of the proposed rule and asked the CFPBto publish a revised proposal for public comment. "The rule is overbroadand misses the mark of enhancing consumer protections because it fails toconsider consumers' needs, particularly those of modest means with financialchallenges, and does not provide a clear and concise path to allow creditunions to meet these needs," Jim Nussle, president and CEO of CUNA, saidin a statement.
*The merger betweenMiddletown, Pa.-based Mid-Atlantic Corporate Federal Credit Union andGreensboro, N.C.-based First Carolina Corporate Credit Union closed Oct. 1. Theresulting entity is now VizoFinancial Corporate Credit Union, with approximately 1,200 membersacross North America.
*Orange, Calif.-based HealthAssociates Federal Credit Union merged into Anaheim, Calif.-based onOct. 1. Retaining the Credit Union of Southern California name, the newlycombined organization serves almost 90,000 members and has 19 branches andassets of more than $1.1 billion, according to a news release. Credit Union ofSouthern California President and CEO David Gunderson will remain president andCEO.
*Ukiah, Calif.-based Mendo LakeCredit Union and Santa Rosa, Calif.-based agreed tomerge, which willlead to a combined not-for-profit financial cooperative with assets of $423million and a membership of almost 48,000, according to a news release. Theongoing cooperative will use the Mendo Lake charter. Community First CU memberswill vote on the merger because they must choose whether to adopt the MendoLake CU charter.