Compliance Blog

Posted by Anthony Demangone

When it rains, it pours.  There's a ton to write about, friends.

Interchange. Yesterday, a major hearing was held on the debit interchange issue in the House.  In the Senate, another hearing on Dodd-Frank touched on the debit interchange issue as well.  One newsworthy event was that Fed Chairman Bernanke indicated that the "small issuer" exemption language of the Durbin Amendment may be ineffective in shielding smaller credit unions and community banks from the rules limitations on interchange income.  Here comes a real shocker - Senator Durbin said the Fed Chairman was wrong.   (I tend to agree with Ben on this one, Mr. Senator.)  And interestingly, news stories about a possible Congressional delay on the rule began to bubble up. Our lobbyists were on the Hill all day, making our case. The fight continues. 

NCUA held its monthly board meeting yesterday.  You can access the board materials here.  NCUA provides a recap of the meeting here. Of note:

• The 18 percent usury ceiling was extended.
• NCUA's incentive-based compensation proposal was issued. (I'll blog about this next week.)
• NCUA released an IRPS on chartering new corporate federal credit unions. 
• NCUA issued a rule to replace or remove references to credit ratios from NCUA's regulations.  (They had to thanks to Dodd-Frank.)
• NCUA also issued its monthly share insurance fund report. 

CFPB.  On Wednesday, I had the pleasure of accompanying a number of federal credit union CEOs and NAFCU staffers on a visit with Elizabeth Warren.  Read the NAFCU Today article about the trip. Ms. Warren is very charismatic, friendly, and engaging.  She truly cares for consumers.  She is convinced that if she accomplishes her goals, consumers will be better off, and credit union compliance burdens will drop. Some takeaways from that meeting...

• She has three major priorities.  1. Credit cards.  2.  Mortgage disclosures. 3.  Getting the formerly unregulated to play by the existing rules.  She already has teams working on the credit card and mortgage disclosure issues.
• She has appointed Elizabeth Vale as the Assistant Director for Community Banks and Credit Unions.  We met with Ms. Vale, who seems genuinely eager to hear our side of the story on issues.  

I believe that Ms. Warren means what she says, but I will second her thought that the proof of the pudding is in the tasting.  As one of the CEOs stated to me before the meeting, every time someone talks about streamlining regulatory burdens, there seems to be 5 new documents that must be signed or produced.  As I listened to Ms. Warren, I thought of political stump speeches.  You know, where they promise what they will accomplish once they are in office.  I love those speeches. But they rarely translate into political realities.

In her efforts to protect consumers while reducing our regulatory burdens and leveling the playing field so that bad actors and credit unions play by the same rules, I wish her all the success in the world.  But my job is to worry about federal credit union compliance officers.  I've heard talk of easing regulatory burdens before.  I'm still waiting for that to take place.

By the way, here's a picture of me meeting Ms. Vale. This is clearly my best side. 

Really, that is my best side.  Don't believe me?  Here's the alternative.   That photo clearly shows what twins and Regulation Z will do to a man!

Have a great long weekend, everyone.  Until Tuesday, stay compliant.