April 8, 2014
Tuesday Edition
CUNA asks Congress to examine NCUA RBC plan

CUNA recently sent a letter to the House Financial Services Committee leaders encouraging them to thoroughly examine the NCUA's proposed risk-based capital rule and direct the agency to make significant changes to address serious deficiencies in the regulation.

The letter was sent to Committee Chairman Jeb Hensarling (R-TX) and Ranking Member Maxine Waters (D-CA) ahead of a planned Tuesday hearing on regulatory red tape. General counsels from federal financial institution regulatory agencies, including the NCUA and Consumer Financial Protection Bureau, are expected to speak during that hearing.

Concerns raised in the letter to Congress include:

  • The rule is fundamentally flawed. For example, it would increase by $7.3 billion the amount of capital credit unions would be required to hold to be "well capitalized" through the imposition of asset risk-weightings that are poorly calibrated--and, in some cases, more stringent than what banks face under Basel III
  • Because of the poorly designed risk-weights, the proposed rule would have a significant, adverse impact on credit unions' ability to serve their members, particularly through mortgage lending and small business loans
  • The time period for implementation is unreasonably short at 18 months


CUNA commented on recent CFPB rules in the letter, noting that that agency in every case should target the bad actors in the financial services market, not force out the good actors. Credit unions should be exempted from CFPB rulemakings, unless there is a record of abusive practices by credit unions on the issue being addressed.

Credit unions can comment on the NCUA's proposed risk-based capital rule until May 28. For resources available from NCUA and CUNA to help you better understand the rule and how to take action before the May 28 deadline - be sure to visit the League's Risk-Based Capital Resources page.

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Washington wire

NCUA’s risk-based capital rule
CUNA and League meetings with the leadership on the House Financial Services Committee, the Senate Banking Committee, and other members of the House and Senate regarding NCUA’s risk-based capital rule continue. Overall, the response from those meetings has been very positive and CUNA expects to be able to outline the next steps of their legislative strategy to help effect changes to the proposed rule very shortly.

Data security
The focus on merchant data breach continues in Congress. Last Wednesday, the Senate Homeland Security and Governmental Affairs Committee held a full committee hearing on "Data Breach on the Rise: Protecting Personal Information from Harm." Panelists included representatives from: the FTC, the Secret Service, the Financial Services Roundtable and the Retail Industry Leaders Association. During the hearing, witnesses suggested that a national standard for breach notification should be adopted and that federal legislation on data breach should not be prescriptive in terms of technological solutions allowing for industry collaboration and technological progress. Committee Chairman Carper indicated that the issue is of top priority and that he hoped to see legislation on the issue pass soon.

For the complete legislative update, including the latest on housing finance reform, privacy notification, patent reform, and the floor and committee schedules for the week, click here.

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InfoSight spotlight: BSA and Marijuana-Related Businesses

In February 2014, the Financial Crimes Enforcement Network (FinCEN) issued guidance that provided clarity to industry questions on customer due diligence expectations and reporting requirements for financial institutions providing services to marijuana businesses. The guidance allows credit unions to provide services to marijuana-related businesses in a manner consistent with their obligations to "know your member" and to report possible criminal activity.

"Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses," FinCEN Director Jennifer Shasky Calvery stated. "Our guidance provides financial institutions with clarity on what they must do if they are going to provide financial services to marijuana businesses and what reporting will assist law enforcement."

League InfoSight has a new topic addressing this subject. The BSA and Marijuana-Related Businesses topic outlines the rules and guidelines to comply with the FinCEN requirements. Check it out today and help your credit union remain in compliance.

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NCUA March board meeting video now online

Credit unions have an opportunity to watch the NCUA board meetings each month. The open portion is taped. The NCUA's March open board meeting’s agenda included two items:   

  • A proposed interagency rule on minimum requirements for appraisal management companies.
  • The Temporary Corporate Credit Union Stabilization Fund quarterly report.

To view this video, plus archived videos of past board meetings, click here.

For additional information concerning the NCUA board, including board agendas and copies of Board Action Bulletins, which summarize the meetings, board memorandums, and other documents, be sure to visit the Board Actions page.

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In This Issue
Tuesday Edition
CUNA asks Congress to examine NCUA RBC plan
Washington wire
InfoSight spotlight: BSA and Marijuana-Related Businesses
NCUA March board meeting video now online
LSCU & Affiliates Media

Florida State GAC
The Florida State GAC wrap up video looks at the more than 30 lawmaker visits, topics discussed and the sessions over the two days including the regulator roundtable. NCUA Region III Director Myra Toeppe talks about her strategy in her first year. 

President's 1Q Video
LSCU president/CEO gives his first quarter video for 2014. He looks at the CUNA GAC, tax reform, and the new Southeast Credit Union Conference. He also talks about the 2014 Dues Rebate.

Upcoming Event Deadlines
April 9 Last Day to Register for Spring Regulatory Compliance Update - Birmingham, AL
Extended to April 22 Last Day for Early Bird Rate for OFAC & Bank Secrecy Act School – Birmingham, AL

Extended to April 22 Last Day for Early Bird Rate – Disaster Recovery Conference – Mobile, AL

Extended to April 24 Last Day for Early Bird Rate – Disaster Recovery Conference – Jacksonville, FL

Upcoming League Events
TODAY Spring Reg. Compliance Update FL
April 9 Compliance, Account Titling & Ownership
April 10 Spring Reg Compliance Update AL
April 15 Managing CUs' BYOD & COPE Policies
April 16 Official Demand for Member Funds
April 17 Examination Findings of the CFPB
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