Compliance Blog

Written by Ricardo Piñeres, Regulatory Compliance Counsel

Last week, the NCUA released Supervisory Letter 14 – 04, Taxi Medallion Lending.  The letter is intended to give NCUA examiners further guidance on how the agency wants them to review taxi medallion loans inside of a credit union’s member business lending portfolio.  Furthermore, the letter also gives credit unions insight into how the agency views the unique risks associated with taxi medallion lending.  The NCUA has released this letter in light of the recent increases to medallion values in several major metropolitan areas, thus leading to increases in medallion lending and the potential risks that go with such lending.

The Supervisory Letter is divided into three main sections: background information on medallions; exam procedures; and additional guidance/resources available to both credit unions and examiners.  The background section is particularly helpful in understanding the NCUA’s view with regards to medallion lending through its discussion of how the medallion business model works and what risks are associated with the medallion’s valuation.  While the bulk of this information is geared towards examiners that may have not encountered much taxi medallion lending during previous examinations, the information is particularly helpful for credit unions to be able to anticipate the questions/concerns from examiners with regards to this unique form of member business lending.

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Next week, on Wednesday, April 16, the NCUA will be hosting a free webinar titled Small Dollar Lending.  The webinar, hosted by Tom Penna, Jr., Economic Development Specialist with NCUA’s Office of Small Credit Union Initiatives, will cover the benefits and requirements of NCUA’s Alternative Payday Loan.

Penna will be joined by Lucinda Johnson, Program Officer in NCUA’s Office of Examination and Insurance, and representatives from two credit unions active in small-dollar lending.  Together, they will discuss how various credit unions have created short-term lending programs that work for their members and factors to consider before starting such a program, including:

• The benefits short-term, small-dollar loans can bring to a credit union’s portfolio mix;
• Regulatory concerns governing this type of product offering; and
• The costs associated with developing or initiating short-term loans.

The webinar will be held at 2:00 pm EDT.  Interested participants must register online in order to participate in the webinar.

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Free Kick.  The Premier League has but one month before it closes its 2013-2014 season.  It has been an exciting season so far that has produced a tight race for the championship, and an equally exciting race for survival at the bottom of the table.  Here are my brief thoughts on how this season will close out.

Bottom Three: While there will inevitably be a surprise or two, I think that Cardiff and Norwich are as good as gone from the Premier League.  I think that Fulham will join them in the Championship, as well.

The Fight for Fourth: A few weeks ago, I said that I thought the top-four had been settled.  Well, sadly, Arsenal has fallen apart these last couple of weeks and they are now in a true dogfight for the final Champions League spot.  While the Gunners have been unable to find any quality, Everton is on a true roll and currently control their destiny by being one point back with one game in hand.  That said, I just have a hard time envisioning Everton maintaining such a strong form over their final six games.  Their run in is just too hard for them to snatch fourth from Arsenal.  I see them dropping at least eight points in three of those matches – at home in the games against Man City and Man U, and away to Southampton.  Arsenal’s final five games are at home to West Ham, Newcastle, and West Brom, and away to Hull and Norwich.  I see them, at most, dropping 5 points over that stretch, and hanging on to fourth.

Top Three: With Liverpool and Man City facing off this coming Sunday, I suspect that the championship race will be defined by what plays out at Anfield that day.  There is just something special happening in that Liverpool clubhouse right now, and I have a feeling that they will find a way to get a positive result on Sunday.  That will put them in the driver’s seat for the last few games, but I don’t think it will be enough.  I see this as another Man City title year with Liverpool a hair behind them in second and Chelsea finishing several points behind in third.

All that said, the Premier League has shown its unpredictability over the last few years, so it would not surprise me at all if the season’s final month takes a few more crazy turns that lead to a completely unforeseen outcome.  No matter what happens, I will just sit back and enjoy the football!

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Webcast.  NCUA & CFPB Updates: What You Need to Know, Now

Get a jump on regulatory preparedness with an update on the most critical upcoming NCUA and CFPB regulations. NAFCU’s Regulatory Affairs team will cover what will be new around capital reform, risk-based capital, interest rate risk, and more.