Newsroom

NAFCU's widely read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. For those short on time, here's a roundup of this week's top need-to-know updates and resources.

Fewer consumers facing debt in collections

The CFPB released a report on trends in credit reporting of debt in collections from 2018 to 2022. The total number of collections tradelines on credit reports fell 33 percent over those four years, and the share of consumers with a collection tradeline on their report fell 20 percent over the same period.

Of note, the declines were driven by fewer reports from medical bill collectors, though these tradelines still represent a majority of all collections items on credit reports. The bureau also noted some “debt collectors are moving away from furnishing collections information to credit reporting companies in part due to their concerns about data integrity and their ability to comply with the Fair Credit Reporting Act (FCRA).”

NAFCU is closely monitoring FCRA-related litigation and this week filed another amicus brief arguing that the law requires furnishers and consumer reporting agencies to investigate factual inaccuracies, not legal disputes.

Relatedly, the Federal Reserve Bank of New York released its Household Debt and Credit Report for the fourth quarter of 2022. Total household debt rose 2.4 percent during the quarter, and the share of current debt facing delinquency increased for nearly all debt types.

Who will replace Brainard on Fed?

Following President Joe Biden’s announcement this week of staff changes for the White House’s top economic policy team, there’s already speculation on who he might nominate to replace Lael Brainard on the Federal Reserve Board of Governors.

Politico has a list of 10 potential nominees. Among them are the presidents of the Federal Reserve Banks of San Francisco, Chicago, and Boston, as well as former Fed staff and economists to the Treasury Department and former President Barack Obama.

Brainard’s resignation as the Fed’s vice chair becomes effective Monday, after which she will lead the president’s National Economic Council. The nominee to fill the vacancy will be subject to the full Senate confirmation process.

CBO predicts gov’t will run out of cash by September

The Congressional Budget Office (CBO) is anticipating the Treasury Department will no longer be able to make payments on the federal government’s debt between July and September. The actual date will depend on government spending over the next few months and how much money is collected during tax season.

To avoid defaulting on loans, Congress will have to either raise or suspend the debt limit. President Biden and House Speaker Kevin McCarthy, R-Calif., have reportedly met once to discuss ways to address the debt ceiling, but no solution was determined. Republicans are seeking significant budget cuts to offset increases to the borrowing limit.

SEC cracks down on crypto investments

The Securities and Exchange Commission (SEC) voted 4-1 Wednesday to move forward with a proposal to expand its authority to safeguard investments and enhance oversight over advisers. The proposed changes would:

• expand the custody rule over a broader range of client assets, including cryptocurrency and artwork, and advisory activities;
• enhance custodial protections for client assets; and
• update recordkeeping and reporting requirements for advisers.

Currently, the SEC’s regulations only apply to assets such as funds or securities and require investment advisors to hold those assets with a federal- or state-chartered financial institution.

Nominate high-performing CU women for recognition

American Banker has a new award program to recognize high-achieving women in the credit union industry in the pipeline for leadership positions. “The Most Powerful Women in Credit Unions: Next” program seeks to recognize women 40 years or younger for their accomplishments and influence within the industry.

The deadline to nominate individuals is Feb. 23; learn more about eligibility and the submission process online. This program is separate from the publication’s “The Most Powerful Women in Credit Unions” award program. Last year, nearly a dozen women from NAFCU-member credit unions were recognized for their leadership.