Credit Union Regulatory Alert  

Published by Howard & Howard Attorneys PLLC

Happy Holidays! 


As 2013 winds down - and the deadline for the CFPB's mortgage regulations approaches - we wanted to provide a quick update on recent developments that credit unions should have on their radar.


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Howard & Howard wishes a special holiday season to you, your families, your credit unions and your members and we look forward to working with you in 2014. 

12 Compliance Items for 

Your Radar - Part I

Unfortunately for credit unions, the approaching holidays have not resulted in a slowdown of regulatory activity. As credit unions - rightfully so - continue to focus their time and resources on complying with the CFPB's mortgage regulations, the regulators have continued to issue final rules and guidance that credit unions should review. Below is Part I, outlining 6 compliance items from the past weeks that should be on your radar.

1. Interagency Statement on Qualified Mortgages. NCUA joined the Federal Reserve, OCC and FDIC in issuing a statement indicating the agencies will not subject residential mortgage loans to safety-and-soundness criticism based solely on the fact that they are qualified mortgages or non-qualified mortgages.
2. Final Rule on Appraisals for Higher-Priced Mortgage LoansNCUA joined the other banking regulators in issuing final rules exempting additional transactions from the appraisal requirements for higher-priced mortgage loans. Additionally, the final rule delayed the effective date for manufactured homes until July 18, 2015.
3. NCUA Finalizes Charitable Donations Accounts Rule. NCUA's December board meeting included a final rule providing federal credit unions additional options related to their charitable giving. The final rule authorizes (but does not require) federal credit unions to create and fund Charitable Donation Accounts - provided the accounts meet NCUA's specific requirements in 12 C.F.R 721.3(b)(2).
4. FFIEC Issues Final Guidance on Social Media. The FFIEC (including NCUA) issued final guidance on social media. While the regulators claim the guidance does not impose any new requirements on financial institutions, the guidance outlines very specific risk management actions the regulators expect institutions to take. These include detailed policies and procedures, staff training, due diligence and ongoing monitoring and reporting.
5. CFPB Continues to Review Arbitration Clauses. The CFPB issued a preliminary report on the use of arbitration clauses in agreements for consumer financial products and services. Dodd-Frank prohibited arbitration clauses for mortgage loans and authorized the CFPB to investigate their use and impact on other consumer products. If your credit union uses arbitration clauses in your agreements, this is an area you will want to monitor closely.
6. Safe Harbor for Credit Card Late Fees. The Credit CARD Act established safe harbor levels for penalty fees - including for late fees. Currently, those levels are set at $25 for the first violation and $35 for subsequent violations of the same type within the next six months. The CARD Act indexed the safe harbor levels for inflation and starting on January 1, 2014, the safe harbor levels will increase to $26 and $37. Credit unions considering increasing their fees should be sure to review their account opening disclosures, the change-in-terms notice requirements as well as the prohibition in 12 C.F.R 1026.55(b)(3)(iii) on increasing a fee within the first year a credit card account is opened. 
If you have any questions or need assistance, please feel free to contact Steve Van Beek or Michael Bell
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In This Issue
12 Compliance Items for Your Radar - Part I
About Howard & Howard


Attorney Spotlight

 concentrates his practice in the area of financial regulations. His intimate knowledge of the operational issues facing credit unions provides the perfect platform to recommend best practices to reduce compliance, strategic and reputation risks.
Attorney Spotlight

  is a Member of Howard & Howard Attorneys PLLC and concentrates his practice in credit union mergers and acquisitions, loan documentation review and strategic planning.

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This Advisory is intended for informational purposes only, and is not offered as legal advice.  Please call a qualified attorney for counsel related to your particular situation.