4 Things You REALLY Need To Know To Start Your CU Day
There are some days when finding something to write about is more difficult than finding a Yankee team that’s won the world series in the last 20 years without a steroid abuser, and others when it is easier to provide useful information than it is to bet against Phil Mickelson winning the U.S. Open. So as faithful blog readers will know, here is a quick hit of items, any one of which you may see me comment on in more detail in future posts. (I know, I know, the suspense is killing you.)
Our sleep deprived friends in the State Senate and Assembly will reconvene later this morning after working into the early morning hours. Before going to bed last night, the Senate passed and sent to the Assembly A.3510/S.2089, our credit union powers bill. (Thank you, Senator Griffo!) If you want to see why some of us can’t help but love being around the Legislature, tune in to the live session of the Assembly and you can actually keep an eye on developments with this bill (A.3510/S.2089). Keep an ear out for rules report number 621. It’s what I will be doing.
At its monthly board meeting yesterday, NCUA unfortunately decided to finalize a regulation capping credit union loan participations and extending this regulation to state chartered credit unions. The final rule caps the amount of loan participations credit unions can purchase from any single originator at an amount not to exceed the greater of $5 million or 100% of the participating credit unions’ net worth. In addition, it also caps at 15% of net worth the amount of loan participations a credit union can be holding generated by one borrower. There are other tidbits in this regulation as well, so for those of you who engage in a lot of participations, this is certainly a regulation you should quickly read up on.
Later in the day, NCUA released a supervisory guidance intended to help credit unions comply with the Dodd-Frank mandated requirement that they no longer rely exclusively on the assessments of credit rating organizations such as Moody’s and Standard and Poor’s when purchasing investments. I guess NCUA deserves credit for coming out with the guidance, but in my ever so humble opinion, it simply underscores why this Dodd-Frank mandate is one of Congress’s best intentioned but dumbest ideas in the arena of financial reform. To me, it makes perfect sense to allow credit unions to rely on ratings produced by companies that actually have the expertise to assess the likelihood of default of municipal bonds, for example.
Speaking of dumb regulatory ideas, our good friends at CUNA reported yesterday that the CFPB responded to a letter from a group of concerned Congressmen by informing them that it has still not decided if and when it will go forward with a mandate requiring that mortgage closing disclosures be provided at least three days before closing. I hope common sense prevails on this one. Can you imagine the irate phone calls you will be getting from members when they are told they can’t go forward with a house closing because the federal government says they need three days to review the paper work?
Finally, our good friends the merchants took it on the chin yesterday. In a 5-4 ruling, the Supremes ruled that American Express could enforce a provision in its contract agreement with merchants compelling them to arbitrate antitrust claims on a case by case basis as opposed to a class action. In my next life, I want to come back as an attorney for the merchants. The amount of money they generate in legal fees would be enough to not only put my kids through college, but my sister’s kids as well.
Stay tuned, stay happy and stay informed.