Posts filed under ‘Compliance’

Is Tomorrow A Business Day?

Image result for veterans dayToday I am going to get down in the weeds a little. So, grab some extra coffee before you find out about the joys of how to define a “business day” for purposes of the Truth In Lending Act and RESPA.

There are of course, a plethora of timed notice requirements in the byzantine world of mortgage finance such as the three-day right of rescission and the receipt of TRID disclosures within 3 business days of receiving an application and at least 3 business days before a closing. A business day is generally all calendar days except Sundays and federal legal holidays specified in 5 U.S.C.A §6103.

Federal law recognizes 11 days as National holidays (5 U.S.C.A §6103). 4 of those holidays specify specific dates on which they are to be celebrated (New Year’s Day, Independence Day, Veteran’s Day, and Christmas). So what do we do in those cases where a holiday celebrated on a specific date is celebrated on a day other than the day on which it falls? As luck would have it, the official interpretation to the definition of business day tells us exactly how to handle this. “When one of these holidays (July 4, for example) falls on a Saturday, Federal offices and other entities might observe the holiday on the preceding Friday (July 3). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day.” 12 C.F.R. § Pt. 1026, Supp. I, Part 1, §1026.2(a)(5)

Since we’re on the subject, what should you do if your member’s credit card payment are due on the 10th of each month? The answer is more complicated than you might think. If your credit union is closed tomorrow because it celebrates Veteran’s Day on the 10th, then it must accept payment as timely if the payment is received on the next business day which could be as late as Monday.

Here’s where it gets even trickier: Even though your credit union knows well in advance what days it will not be open for business, you are still obligated to disclose the 10th as the date the payments are due on your periodic statements. Take a look at the official commentary; See 12 C.F.R. §1026.7 (b)(11)(9) for further explanation.

Incidentally, throughout this blog I am providing links from the CFPB’s eRegulations. This is the easiest way of easily sifting through the regulations and their accompanying commentary.

On that note, yours truly is taking a floater tomorrow. I’m actually headed down to God’s Country (aka Long Island) to see how the family is doing and to take a train ride into the city. Maybe we will run into each other.


November 9, 2017 at 9:57 am Leave a comment

CFPB Releases Beta Version Of Web Portal


Image result for CFPB

I’m on my way to the train station but I wanted to give my faithful readers a heads up on the type of news that makes compliance geeks get excited and puts the rest of the universe to sleep. Trust me, if your credit union has to report HMDA data, this is another important milestone towards the radical redesign of the implementing regulations envisioned by Congress and the CFPB.

What I’m talking about is news that the CFPB has released a beta version of the portal that financial institutions will use to report HMDA data. Given the amount of information that is going to be available about your average home borrower, it is absolutely crucial that the portal institutions will use to report this information works. After all, it was a vulnerability in an Equifax portal which lead to its data breach. Make sure that your compliance person gives a heads up to the IT Department so that it can begin to play with the new toy.

In addition, since this is a beta version, the CFPB will still have the ability to fix glitches that you identify. On that concise note, have a great day and don’t forget to vote!

November 7, 2017 at 8:21 am Leave a comment

Are You Complying With These Two Acronyms?

The CU Times is reporting this morning that the number of ADA website compliance lawsuits filed against credit unions has more than doubled in the last month to at least 23 and is likely to grow even more in the coming weeks. It’s good that credit unions are paying attention to these lawsuits but I’m afraid that the industry is in danger of shifting from neglectful indifference to an unproductive frenzy when it comes to reacting to this litigation.

In contrast, today is the final day to submit initial comments in support of CUNA’s petition to the Federal Communications Commission, requesting that credit unions be given greater flexibility to contact their members on their cell phones without fear of violating the increasingly confusing requirements of the Telephone Consumer Protection Act (TCPA).

The ADA has gotten the lion’s share of attention in this battle of the acronyms. This makes sense in the short-term since, unlike the TCPA, every credit union with a website could potentially be sued. But in the medium to long-term it’s actually the TCPA proposal from which credit unions have the most at stake. Here’s why:

First, the crux of the ADA lawsuits is that websites are public accommodations which must be accessible to disabled persons such as the visually impaired. The lawsuits claim credit unions can comply with these reasonable accommodation requirements by ensuring that their websites satisfy the requirements of the World Wide Web Consortium. This sounds like a big deal but it’s time for everyone to take a deep breath. First, there is a good chance that, depending on the age of your software, you may find that your ability to comply with these requirements is already embedded in your system.

Second, in a worst case scenario, if a credit union finds itself facing an exorbitant cost to satisfy these lawsuits, it could always argue that compliance measures would cause it an undue burden.

Third, we are still dealing with an evolving area of the law. It’s possible that clear-cut guidance will ultimately preempt many of these lawsuits. In short, I firmly believe that we will look back in a year or two from now and realize that complying with the ADA was not a big deal.

In contrast, the TCPA is an absolute mess and getting worse by the day. It is a fast growing area of consumer law litigation that threatens to make it difficult to communicate with our members using this cutting edge piece of technology called a cell phone.

CUNA’s petition would exempt from TCPA liability informational calls made by credit unions to their members’ wireless numbers, so long as such communications are either made to a wireless subscriber with whom the credit union has an established business relationship or, alternatively, the subscriber is not charged for the call under the subscriber’s wireless plan.

Trust me, even if your credit union doesn’t come within the jurisdiction of the TCPA today, it will in the near future. Mass marketing and auto dialing used to be limited to huge companies and banks. Today, even the smallest credit unions can afford technology which makes them subject to the TCPA and its trip wires. The problem is that whereas the ADA has no statutory damage provisions, the TCPA does. This means that whereas two firms are bringing most of the ADA lawsuits according to the CU Times, I would bet you that there are dozens of firms seeking to start TCPA class actions.



November 6, 2017 at 9:09 am Leave a comment

Are You Prepared To Lend In A Multi-Lingual World?

I’ve been away in beautiful Syracuse, New York for the last couple of days, attending the Association’s annual Small Credit Union Roundtable and there was one bit of news that I overlooked that is worth passing on. On Friday, the Federal Housing Finance Agency, which oversees the ostensibly bankrupt Fannie Mae and Freddy Mac, announced that it is amending the Uniform Residential Loan Application (URLA) used by the GSE’s to include a “preferred language question.”

If all goes according to plan, you will see forms with the new question by the end of 2017. Lenders will have the option of using the redesigned URLA by 2019 with use mandatory by 2020. I’ve been somewhat remiss in not talking about these changes sooner. The preferred language question is one of a series of changes that the GSE’s have been planning on implementing since August of last year.

Does this mean that your credit union will have to find interpreters for non-English speakers applying for a mortgage loan? No. The new question includes a disclaimer that “your answer does not mean the Lender or Other Loan Participants agree to communicate or provide documents in your preferred language. However, it may let them assist you or direct you to persons who can assist you.”

That being said, with the explosion of apps such as Google Translate, it is getting cost-effective to translate documents. One of the reasons why I’m highlighting this announcement is because I do expect legal and compliance demands for consumer disclosures to be provided in multiple languages to increase, particularly in states such as New York which have such diverse ethnic communities.

Senate Votes To Kill Arbitration Rule

Senate Republicans stopped their circular fire squad last evening long enough to pass a bill blocking the CFPB’s regulation banning arbitration clauses that include prohibitions against consumers joining class action lawsuits. The Senate broke 50/50 with Vice President Mike Pence casting the tie-breaking vote. The vote comes on the heels of the Treasury report harshly criticizing the CFPB’s research methodology, which I talked about in yesterday’s blog.

October 25, 2017 at 9:14 am Leave a comment

New York State Proposes Expanded Student Branching Powers For State Charters

Good morning, folks.

New York State’s Department of Financial Services continued to signal its increased support for the State credit union charter by providing notice that it intends to allow state chartered credit unions to operate student branches to the same extent as their Federal brethren. The proposal will provide much needed guidance and flexibility for state chartered credit unions interested in offering such branches. The beauty of wild card is that it also provides assurances to existing Federal charters that if they were to flip to the state’s oversight they can be assured of exercising the same powers.

While state charters have long had the ability to operate student branches in New York State (See §450-b) Federal credit unions have much more flexibility in operating such branches as I explained in this previous blog under the DFS’s proposal, state charters will be able to open student branches provided they give the Department at least 30 days prior notice. Eligible members would include all students enrolled in the school as well as teachers and staff.

If approved, this would be the most important use of the wild card power ever authorized on behalf of credit unions so comments in support of this notice would be appreciated. Remember, a strong state charter helps both Federal and State credit unions.

NCUA Board Meeting Today

The NCUA has a Board meeting scheduled for today. If all goes according to plan, NCUA will quickly be finalizing its proposal to create a more formalized appellate process for credit unions challenging material examiner findings. I think this is potentially a very big development but I will talk about that more in tomorrow’s blog. Incidentally, tomorrow’s blog should be timelier than other blogs have been in recent days as there’s no Yankee game tonight. For those of you interested, the next game is tomorrow night.



October 19, 2017 at 9:11 am Leave a comment

Five Things I Have To Tell You Before The Yankee Game

Don’t tell anyone but If all goes according to plan, I’ll be sneaking out of the office a little early today so I can be comfortably ensconced in my leather recliner with my opened IPA and my perfectly positioned remote control by 5:08 p.m. so I don’t miss a pitch in Game 5 of what’s turning into an epic battle between the Yankees and the Astros.

But in the meantime, just in case you don’t care about baseball or actually need to get some work done before the game starts, here are five things I should tell you about before I sneak out.

1. New York Finalizes Tough New Title Insurance Regulations

New York State’s Department of Financial Services continued its crackdown on what it perceives as abuses by the Title Insurance industry. Yesterday, it finalized a set of regulations which generally further restrict the fees that title insurance companies can charge and further narrow the flexibility that title insurance companies have to enter into affiliation relationships. Some of the specific prohibitions include limits on “ancillary fees.” For example, it caps so-called ancillary fees or other discretionary fees such as fees for bankruptcy and municipal searches. New York State is concerned that title insurers get around existing limits on premium charges by charging additional costs for such services. The regulation also places new limits on the activities of title insurance agents or corporations from affiliated persons or corporations. This means, for example, that if your credit union has a title insurance CUSO it should reexamine how this relationship is structured.

2. Trades Call On Congress And Justice Department To Provide Clarity On Website ADA Compliance

CUNA urged Congress and the Justice Department to clarify once and for all the obligations of companies to provide accessible websites under the Americans With Disabilities Act. The call comes amid a wave of lawsuits against credit unions and other financial institutions for failing to comply with the ADA. In 2010, the Department of Justice issued an Advance Notice of Proposed Rule Making which provided guidance on websites in the ADA but the regulations have gone nowhere. On the legislative front, CUNA voiced its support for HR 620, the ADA Education and Reform Act of 2017.

3. Temporary Exceptions To Appraisal Requirements In Storm Impacted Areas 

If you provide mortgages in an area impacted by Hurricane Harvey, Irma, and Maria then you should know that Federal regulators including the NCUA issued an order specifying that financial institutions will not be required to obtain appraisals for affected transactions. The agencies will not require financial institutions to obtain appraisals for affected transactions (1) if the properties involved are located in areas declared major disasters; (2) if there are binding commitments to fund the transactions within 36 months of the date the areas were declared major disasters, and (3) if the value of the real properties support the institutions’ decisions to enter into the transactions.

4. NCUA Budget Briefing Today

Don’t forget that NCUA is holding a briefing on its proposed 2018 budget from 2-4pm. The briefing is more important than usual for those of us in Region I as it may provide us with additional information about the cost savings to be generated from shutting down operations in the Albany area. By the way, if NCUA doesn’t want to remain my neighbor then they shouldn’t expect a Christmas card from me this year.

5. Rally Chants That Didn’t Make The Cut

Yours truly ran out of time to get a blog out yesterday. I had to get downtown to participate in the credit union rally hosted by the Association. Thanks to all of you credit union people who showed up. While the rally was a success, I remain a little upset that some of my proposed chants and slogans were not incorporated into the rally. So here they are:

  • All’s Well That Ends Wells!
  • Credit Unions Rule, Bankers Drool! (Courtesy of my 8-year-old.)
  • 100 Years Of Opening Accounts that People Actually Know They’ve Opened

October 18, 2017 at 9:23 am 2 comments

Time To Make Your Website ADA Compliant

Image result for ADATwo recent developments demonstrate that it’s time to start making your website ADA compliant if you haven’t done so already. 

 First, the Credit Union Times reported recently that at least nine credit unions have been sued in recent weeks because their websites allegedly violate the Americans With Disabilities Act (ADA). Second, there is now a district court decision in the 2nd Circuit, which has jurisdiction over New York State that websites must comply with this federal law.  Andrews v. Blick Art Materials, LLC, — F. Supp. 3d –, 2017 WL 3278898, (E.D.N.Y. Aug. 1, 2017).

To state a claim under Title III of the ADA, a disabled plaintiff must prove that a defendant owns, leases or operates a place of public accommodation and that the defendant has discriminated against him by denying him a full and equal opportunity to enjoy the defendant’s services. The key issue, increasingly involving credit unions, is whether or not a business’s website is a place of public accommodation.

 For example, I pulled down the complaint to one of the lawsuits to which the CU Times is referring. The legal argument in Carroll v. Roanoke Valley Community Credit Union is a straight forward one. The plaintiffs are visually impaired consumers who argue that the credit union’s website lacks basic software that enables the visually impaired to navigate and utilize web services. Specifically, they point to standards promulgated by the International Website Standards Organization which have been “successfully followed by numerous large business entities to ensure that their websites are accessible” and which the credit union has allegedly not adopted.

Despite the ubiquity of the internet, the courts have still not come to a consensus as to whether or not a website is a place of public accommodation covered by the ADA. Very generally speaking, some courts argue that the ADA can’t apply to websites because they are not physical locations such as buildings. Other courts have concluded that the ADA should be read broadly as including websites at least to the extent that they assist individuals wanting to enjoy a business’s physical location.

This is why the Andrews decision is potentially so important. It marks the first time that a New York Federal Court has directly ruled on the issue of whether Title III of the ADA applies to a retailer’s website. If appealed.  It will give the Court of Appeals for the 2nd Circuit the opportunity to provide clear guidance to credit unions and other businesses about what their website obligations are. If the case is upheld on appeal, it clearly stands for the proposition that your website must be ADA compliant.


October 11, 2017 at 9:48 am 1 comment

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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