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. Part I of this series is available here


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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 II

Unfortunately for credit unions, the approaching holidays have not resulted in a slowdown of regulatory activity. In case you missed it, Part I of this series is available here. Below is Part II, outlining 6 additional compliance items that should be on your radar.

7. CFPB To Regulate NonBank Student Loan Servicers. The CFPB finalized a rule establishing their authority to regulate nonbank student loan servicers. For credit unions, this demonstrates a continued focus by federal regulators on student loans and increases the compliance and legal risks in that market. For example, a CFPB blog post highlighted a letter sent to student loan servicers asking for information on how they handle extra payments to student loans. The CFPB's inquiry could be the first step toward adopting a requirement for allocation of excess payments similar to the current rules for credit card accounts.   
8. NCUA Issues Letter to Credit Unions on Private Student Loans. Not to be outdone, NCUA issued a Letter to Credit Unions with an attached Supervisory Letter on Private Student Loans. If your credit union offers private student loans (including through a CUSO), the Supervisory Letter is a must-read and you should prepare for additional focus in upcoming exams.  
9. CFPB Pushes for Voluntary Disclosure of Agreements with Colleges and Universities. In conjunction with a report on college credit card agreements, the CFPB requested that financial institutions - including credit unions - voluntarily release agreements with colleges and universities related to other products. The CFPB's blog post indicates it will be "contacting financial institutions to find out more about their commitment to transparency." If your credit union has a marketing agreement with a college or university for financial products or services, now is the time to review your agreement, analyze the CFPB's informal request and determine the best approach for your credit union.
10. CFPB Fines GE CareCredit for Deferred Interest Credit Cards. The CFPB fined GE CareCredit $34.1 million for deceptive actions taken related to its deferred interest credit cards. While credit unions do not usually offer deferred interest promotions on their credit cards, the CFPB's action indicates continued focus on the credit card market and foreshadows the potential for additional tweaks that could impact credit unions. 
11. CFPB Alleges Abusive Actions in Lawsuit Against CashCall, Inc. for Illegal Online Loan Servicing. The CFPB has not been shy in its enforcement actions and its recent lawsuit against CashCall, Inc. is a prime example. Importantly, Count Three of the Complaint (page 21) cites the CFPB's power to prevent "abusive" actions under its UDAAP powers. 
12. CFPB Launches Nationwide Education Campaign on Mortgage Rules. The CFPB announced tools to help consumers understand their rights under the new mortgage rules. While these tools are designed for consumers, credit unions should be familiar with the tools as your members will be seeing and using this information. Additionally, the tools - such as the Help for Struggling Borrowers Guide - provide a great way to audit your procedures and provide additional training and understanding to staff and management.
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 II
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.