Treasury’s report on financial reform reflects several areas highlighted by CUNA and credit unions during meetings and follow-up letters. The report, released Monday, is titled “A Financial System that Creates Economic Opportunities: Banks and Credit Unions” and is the first of 4 Treasury is expected to released.
CUNA met with the Treasury in April, as part of a roundtable discussion with credit unions, and followed up with a letter to Secretary Steven Mnuchin containing recommendations to streaming regulations for credit unions. Aspire President/CEO Tom O’Shea joined CUNA President/CEO Jim Nussle and approximately 20 credit union representatives from around the country for the April 4 roundtable discussion.
CUNA also sent letters to the administration and the Consumer Financial Protection Bureau (CFPB), highlighting areas the bureau could make rule changes to improve the operating environment for credit unions.
Many of these suggestions are reflected in the Treasury report, which contains the following recommendations for regulators.
-Recalibration of NCUA Regulations, including revising risk-based capital to apply to credit unions with $10 billion and over or eliminate requirements for those with 10% net worth, raising stress testing threshold to $50 billion and allowing credit unions to rely on appropriately designed supplemental capital to meet a portion of risk-based capital requirements;
-Revisiting current expected credit loss requirements;
-Recommending call reports be simplified and streamlined;
-Raising examination thresholds for an extended exam cycle above the current $1 billion level or eliminating it entirely; and
-Recommending better coordination and rationalization of examination and data collection procedures to promote accountability and clarity;
-Making structural reforms that include making the director removable “at-will” instead of “for cause;” funding through the appropriations process and restructuring the civil penalty fund;
-Increasing regulatory certainty by recommending the bureau issue rules or guidance subject to public notice and comment procedures before bringing enforcement actions and recommending the bureau adopt regulations that more clearly delineate its interpretation of the UDAAP standard;
-Recommending the CFPB bring enforcement actions in federal district court rather than use administrative proceedings;
-Promulgating a regulation committing the bureau to regularly reviewing all regulations that it administers to identify outdated or unnecessary requirements;
-Reforming the Consumer Complaint Database to make the underlying data available only to federal and state agencies;
-Repealing CFPB’s supervisory authority; and
-Addressing mortgage issues such as reviewing the ability-to-repay/qualified mortgage (QM) rule, revising the points and fees cap for QMs, increasing the threshold for making small creditor QM loans, clarifying and modifying the Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosure rule and delaying the 2018 implementation of Home Mortgage Disclosure Act reporting requirements.
Additional suggestions, and more detail, can be found on CUNA’s Removing Barriers Blog.