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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 news related to a new agreement between the NCUA and CFPB, an update on remote deposit capture (RDC) litigation, and more.

NCUA, CFPB agree to improve consumer protection supervision

The NCUA and CFPB Thursday announced a memorandum of understanding (MOU) aimed at improving coordination between the agencies related to the consumer protection supervision of credit unions with more than $10 billion in assets.

"NAFCU strongly supports the CFPB and the NCUA’s efforts to improve agency coordination when it comes to supervising credit unions over $10 billion in assets," said NAFCU President and CEO Dan Berger. "We hope improved coordination between the two regulators will provide for a more streamlined approach to their supervision and examination practices, and it would simplify processes for credit unions. We thank the agencies for their joint efforts, and we look forward to monitoring this partnership’s impact on the industry."

NAFCU has consistently encouraged the agencies to work together to ensure the industry is not overly burdened by regulations and examinations. NAFCU last year outlined several improvement areas for the bureau's Taskforce on Federal Consumer Financial Law; the taskforce recently released its recommendations that included several NAFCU-sought items, including that the bureau and the prudential regulators eliminate overlapping examination subject areas and reconcile inconsistent examination standards.

NAFCU also recently provided comments to the NCUA and CFPB on an interagency proposal related to supervisory guidance, encouraging transparent guidance to provide a more consistent supervisory approach from the regulators.

Patent board rules against Wells Fargo in RDC case

As Wells Fargo continues to fight against claims that it intentionally infringed on certain USAA RDC patents, the U.S. Patent and Trademark Office this week disagreed with Wells Fargo's arguments that two areas of contention were unpatentable. Wells Fargo has lost two jury decisions, resulting in $200 million and $103 million in damages, in lawsuits dealing with autocapture technology and broader patents, including related to technology that reads the check to verify the routing/account numbers and the information submitted by the consumer.

USAA in late 2017/early 2018 began sending letters to credit unions alleging that the credit union's RDC technology infringed on patents owned by USAA. Through these letters, USAA sought voluntary licensing fees from other financial institutions and invited credit unions to call the firm to discuss licensing USAA patents.

In addition to these cases, NAFCU is also monitoring a vendor's request for judgment that its technology does not infringe on USAA's patents. Mitek Systems – the vendor – provides RDC technology to Wells Fargo and thousands of other financial institutions. USAA filed a motion to dismiss Mitek's request in January 2020; Mitek subsequently filed its response to that motion.

The January 2020 Compliance Monitor includes an update on the litigation and a Compliance Blog post further details the lawsuits and explains the patents in question. The association will continue to monitor developments and provide credit unions with up-to-date information.

FinCEN provides NAFCU-sought extension for CVC comments

The Financial Crimes Enforcement Network (FinCEN) has extended the comment period on its proposed rulemaking on the requirements for certain transactions involving convertible virtual currencies (CVCs) or legal tender digital assets (LTDA) by an additional 15 days for reporting requirements on CVC transactions and 45 days for the requirements on banks and money service businesses (MSBs) to report and record information about their customers. NAFCU had sought this extension, arguing that its original 15-day comment period limited stakeholders' ability to provide substantive comments on the potential ramifications of the proposal.

The proposal comes as a result of the FinCEN Exchange meetings in 2020 and 2019 geared toward cryptocurrency and aims to close anti-money laundering (AML) regulatory gaps for CVC and digital asset transactions. As proposed, the rule would require banks and MSBs to submit reports of transactions involving CVC and digital assets with legal tender status over $10,000.

NAFCU last week provided comments to FinCEN, asking FinCEN to mitigate compliance burdens on credit unions and consider future implications on a credit union's decision to provide financial services for CVCs/LTDAs.

FHFA extends COVID flexibilities

The Federal Housing Finance Agency (FHFA) Thursday extended several of its loan origination flexibilities until Feb. 28. The agency has extended these several times in order to ensure continued support for borrowers amid the coronavirus pandemic.

The flexibilities which were previously set to expire Jan. 31 include:

• alternative appraisals on purchase and rate term refinance loan;
• alternative methods for documenting income and verifying employment before loan closing; and
• expanding the use of power of attorney to assist with loan closings.

Fannie Mae and Freddie Mac have pages devoted to coronavirus resources and guidance available online. 

OCC's Acting Comptroller leaves

Acting Comptroller of the Currency Brian Brooks is expected to leave the agency by the end of the week. OCC COO Blake Paulson is set to take over as acting comptroller.

NAFCU was engaged with Brooks as he pursued a novel bank licensing approach at the agency. The association and other industry trades raised concerns about the potential policy, legal, and systemic implications granting national bank charters for fintechs and uninsured banks would have on the financial system.