Posts filed under ‘HR’

Legislature To Pass Coronavirus Legislation

Good morning folks.  If all goes according to plan, the legislature is scheduled to convene today for the first time since two Assembly members contracted the coronavirus.  In normal times, we would be in the homestretch of intense budget negotiations with the state’s fiscal year scheduled to start on April 1st.  But these are not normal times. Instead, one of the most challenging issues facing legislators is how to convene safely.

When the legislature does meet, one of the bills it has tentatively agreed to take up provides leave for all employees who are either subject to  a mandatory or precautionary order of quarantine or isolation issued by New York State, or need to care for someone who is.  This legislation is part of a larger bill mandating that all employees be provided with sick leave.

The Governor in this year’s budget proposal originally proposed the sick leave legislation.  It implements a sliding scale of sick leave benefits depending on the size and income of the employer.

On one end of the scale, employers with four or fewer employees with a net income of less than $1 million dollars would have to provide 40 hours of unpaid sick leave in the calendar year.  In contrast, employers with 100 or more employees in any calendar year would have to provide at least 56 hours of paid sick leave.  This is a tentative deal and if there are changes before the bill is passed, we will let you know.

Incidentally, if the legislators are looking for helpful bills to pass in this time of crisis, one measure they should consider is legislation authorizing remote notarization services.  Many other states already have legislation providing for remote electronic notarization. In tomorrow’s blog, I will provide you all with some information about the impact that the virus is having on mortgage lending – and options that policymakers have to streamline the lending process.


March 18, 2020 at 11:16 am Leave a comment

Seven Ways COVID-19 Is Impacting Your Operations

Greetings from the state that is number one in COVID-19 cases; as of Sunday afternoon.

There have been an amazing number of developments affecting your credit union over the weakened.  I am emphasizing those that you may not have heard about yet.

New York Delays New Servicing Regulations

I actually have some good news to tell you this morning.  I found out over the weekend that New York’s  Department of Financial Services has issued an emergency regulation putting on hold for an additional 90 days new servicing regulations which many credit unions and mortgage bankers were wondering how they were going to comply with.  In announcing the delay DFS Superintendent, Linda A. Lacewell explained that “the volume and complexity” of the new regulations, especially since they require new programing and disclosure requirements for home equity lines of credit, has led the department to conclude that businesses need more time to comply, particularly at a time when they have to concentrate on the pandemic.

A special shout out to the New York Mortgage Bankers Association, which did a great job alerting stakeholders to the difficulties in complying with this regulation.

State Issues COVID-19 Emergency Relief Order

New York’s Department Of Financial Services issued an order exempting state licensed and state chartered financial institutions including state chartered credit unions from some regulations with which they would normally have to comply.  Most importantly, these institutions can now close and relocate branches and offices without first providing notice to DFS.  In addition, licensed individuals such as mortgage originators can work from home with the understanding that they are still subject to New York’s regulations.  Entities are still expected to inform New York State of any relocations.

Additional Developments…

Also over the weekend, the Governor asked businesses that could do so, to voluntarily shut down and allow their employees to work from home.

Finally, the state has imposed limits on the size of mass gatheringsHere is his first order.  This situation is very fluid and we may see further reductions in the authorized size of mass gatherings.

Fed Gone Wild

Just how low can the Fed go?  The Federal Reserve Open Market Committee announced yesterday that it was slashing the Federal Funds rate to zero (!) and “expects to maintain this target range until it is confident that the economy has weathered recent events…”

When the history of this pandemic is written, it will be marked as the end of a unique period in American history during which the Federal Reserve exercised a decisive impact on the American economy.  In 1987, Alan Greenspan calmed the stock market following its dramatic decline; it was the Fed that helped minimize the impact when the dot-com bubble popped; and Ben Bernanke mitigated the impact of the Great Recession of 2008 by going on a mortgage buying binge.

My how times have changed.  Interest rates are already too low to have much of a stimulus impact and they will have no effect in coxing Americans out of their homes to hoard more toilet paper.

The Fed did take one important step recently.  It announced a massive infusion of funds into the repurchase market.  It also announced it would accept a broader range of securities for these arrangements.

The repurchase market plays an absolutely crucial role in the economy.  It is the mechanism by which the largest of the large financial institutions manage their liquidity on a daily basis by getting short-term loans of cash in return for collateral such as bonds.  The system has had some hiccups over the past year and no one quite knows why.  Stay tuned.

With the Fed out of bullets, it is up to Congress and the President to come together and agree on a stimulus package.  On Saturday, the house took the first step in this legislative dance by passing legislation which extends limited family leave protections to some employees and increasing funding for programs such as SNAP.  The precise impact of this proposal is being debated this morning, with critics already complaining it contains too many loopholes to help most workers.  If, as expected, the Senate passes the bill this week and the President signs it, the real contentious debate gets started.  Both sides are already jockeying for position over what should be included in a larger stimulus package.

March 16, 2020 at 10:38 am Leave a comment

Can Your Employee Use Medical Marijuana At The Credit Union?

Since 2014 when New York legalized the use of marijuana for medical purposes, lawyers, HR professionals and employers have grappled with how best to reconcile two provisions of New York’s law which seem to be in conflict with one another. On the one hand, § 3369(2) of New York’s Public Health Law stipulates that a certified patient authorized to use marijuana shall be deemed a disability under New York’s Human Rights Law which bans discrimination against the disabled and mandates that employers provide employees reasonable accommodations to do their jobs.

Conversely, this same subdivision goes on to explain that it does “not bar the enforcement of a policy prohibiting an employee from performing his or her duties while impaired by a controlled substance” or put the employer in the position of violating Federal Law.

New Jersey also authorizes the medical use of marijuana with provisions similar to New York’s. A recent decision by its Supreme Court, while not binding in New York, could be used as persuasive authority by future employees claiming to have been discriminated against by their employers. I would certainly take a look at this case and consider whether the type of activities performed by your credit union employees justify policies that you may have regarding the use of marijuana in the workplace.

In Wild v. Carriage Funeral Holdings, Inc., a funeral director came down with cancer in 2015 and was prescribed marijuana under New Jersey’s Medical Use Law. One day he got into an accident while driving a company vehicle. He went to the emergency room and explained that he had marijuana in his system because of his cancer treatment but the doctor was unconcerned because he was clearly not impaired. Nevertheless, he was fired for violating the corporate policy against using drugs during work hours, a policy with which NCUA’s employees are all too familiar these days.

He sued claiming that he was lawfully using marijuana and he was being discriminated against because of his medical disability in violation of NJ law. The lower court disagreed because of a provision of the New Jersey Compassionate Use Act that “nothing” requires an employer to accommodate a medical user of marijuana. The case eventually found its way up to the New Jersey Supreme Court. In a brief decision, it held that it was obligated to interpret New Jersey law in a way that reconciled the two provisions. It ruled that “The Compassionate Use Act does not have an impact on the plaintiff’s existing employment rights. In a case such as this, in which plaintiff alleges that the Compassionate Use Act authorized his use of marijuana outside the workplace, the Act’s provisions may be harmonized” with New Jersey’s anti-discrimination laws.

Think about the impact that this decision has for those of you who have branches in New Jersey. Most importantly, you should make sure that your policies don’t discipline an employee simply because he or she is lawfully using marijuana. The case also raises an interesting issue that employees also need to consider. In this case, there was documented evidence that the employee was not impaired. Would the outcome have been different if the employee was impaired? And if so, how are employers going to make the distinction between an employee with marijuana in his system and an employee with marijuana in his system who is impaired? These are interesting questions that we won’t know the answer to for several years. But in the meantime, your policies have to be drafted in consideration for these questions in any state which authorizes medical marijuana use.

March 12, 2020 at 11:27 am Leave a comment

Are you prepared for the next pandemic?

I certainly don’t want anyone to overreact, but as I was getting ready to go this morning, I listened to the news that the coronavirus is continuing to spread. In addition, with an incubation period of 14 days, an epidemiologist interviewed on Bloomberg predicted that as many as 100,000 people could ultimately be infected.

It’s time to start dusting off those continuity plans addressing what steps your credit union would take in the event of a wide-spread virus. Here are a couple of good places to start:

In 2006, there was wide-spread fear of an influenza pandemic. The financial regulators, including the NCUA, responded with this inter-agency statement on Pandemic Planning.

In 2014, we had the Ebola Outbreak. One of the most helpful analyses of the legal issues confronted at the time by employers was this blog post from Bond Schoeneck & King, which addressed issues such as the extent to which employers could inquire about employees’ travel plans.

There are also regulations you are already subject to. For example, Federal law requires employers to provide employees a place of employment free of “recognized hazards that are causing or are likely to cause death or serious physical harm” to employees (29 USCA section 654). Consistent with this obligation OSHA issued this guidance during the flu epidemic.

Now I want to stress that all of these outbreaks are unique and raise different issues. Furthermore, I’m not aware of any formal regulatory requirements that have been imposed on financial institutions as a result of the coronavirus. But as I like to say, I am paid to be paranoid, and now is a good time to start answering the questions that you could be asked if this virus spreads.

Another day, another data breach

In the immortal words of the second greatest American entertainer of the 20th Century, Ray Charles, “Here we go again.” KrebsonSecurity is reporting that convenience store chain Wawa has been victimized by a nine month data snatching security breach. This is based on news that the bad guys are already offering to sell personally identifiable information on the dark web. Rather than go through the usual litany of complaints I think I’m just going to let Ray Charles finish out the blog with one of my favorite songs:

I’ve been there before
And I’ll try it again
But any fool knows
That there’s no way to win
Here we go again
She’ll break my heart again
I’ll play the part again
One more time







January 29, 2020 at 9:32 am Leave a comment

Ok, Boomer, Here Are Some Important Developments

Yesterday, NCUA released its agenda for next week’s board meeting. The caption that caught my eye is that the NCUA will be proposing a rule on subordinated debt. Earlier this year, NCUA issued an advanced notice of proposed rulemaking analyzing potential uses of what I am going to generally refer to as non-member uninsured capital. Depending on what NCUA comes out with, the regulation could give credit unions of all sizes the ability to obtain additional capital and set off a fierce attack by the bankers. In addition, some of the issues involved are complex enough to keep compliance people and lawyers busy for months, if not years to come. Stay tuned.

Is it Ok, Boomer?

That was the question pondered by Chief Justice Roberts as he heard arguments dealing with the interpretation of an obscure provision of the Age Discrimination in Employment Act. His question was over whether it was acceptable for a young employer to say “ok, boomer” to an older job applicant. I have since been informed that this is an increasingly common putdown of persons from a certain age group by millennials. Fortunately, the phrase has not caught on with my daughters, but I digress.

I am using this opportunity to highlight an age discrimination case that your HR department should examine brought to my attention by one of my more faithful readers. In EEOC v. Tucoemas Federal Credit Union, the credit union agreed to pay $450,000 to settle claims that it discriminated against three female employees in their fifties when it passed them over for the CEO job and instead hired a younger man with no credit union experience. Now, the case itself doesn’t break new ground, but if you take the time to read through the decree, it underscores just how dangerous it is to not have appropriate policies and procedures in place when it comes to making promotion and hiring decisions. This is particularly true for employees in New York, since changes to New York law make it more cost effective for attorneys to bring state law discrimination claims.

In Defense of the CFPB

Supporters of the CFPB are in the bizarre position of having to defend the Bureau against claims that its leadership structure is unconstitutional in Seila Law LLC v. Consumer Finance Protection Bureau. As a result, when the Supreme Court appointed prominent appellate attorney Paul Clement to argue in favor of the Bureau, his arguments are effectively the most important ones to be watched by supporters of the CFPB.

The other day, he submitted his brief to the court, and the key takeaways are that Congress has broad discretion to establish an independent agency’s leadership structure. The constitution does not speak to precisely how such agencies are to be organized. What really intrigued me is that he also argued that the court needn’t decide the issue of the Bureau’s structural constitutionality, because the issue involved in the underlying litigation can be resolved irrespective of the Bureau’s leadership. The latter argument could be significant because, like any good litigator, Clement is trying to give a majority of the Justices a way to rule on the case without declaring the structure of the CFPB unconstitutional.

January 17, 2020 at 10:03 am 1 comment

New York State Rings in the New Year With a Host of New Mandates

Welcome to the new decade, people.

While much has changed, much remains the same, which means that it is time for my annual blog highlighting some of the recent developments that will impact your credit union operations in the coming year.

NYS Issues LIBOR Preparedness Mandate

On December 23rd, New York’s Department of Financial Services Superintendent Linda Lacewell issued a homework assignment for all financial institutions regulated by the state. With the London Inter-Bank Offered Rate (LIBOR) to be phased out in 2021, DFS wants to make sure that all its regulated entities are preparing to shift away from using this rate. For credit unions, LIBOR would most commonly be used to establish baseline interest rates for floating loans. What makes New York’s guidance somewhat unique is that by February 7th, “the Department requires that each regulated institution submit a response to the Department describing the institution’s plan to address its LIBOR cessation and transition risk. The plan should describe (1) programs that would identify, measure, monitor and manage all financial and non-financial risks of transition, (2) processes for analyzing and assessing alternative rates, and the potential associated benefits and risks of such rates both for the institution and its customers and counterparties, (3) processes for communications with customers and counterparties, (4) a process and plan for operational readiness, including related accounting, tax and reporting aspects of such transition, and (5) the governance framework, including oversight by the board of directors, or the equivalent governing authority, of the regulated institutions.” I will be following up with a more detailed blog on this subject in the coming days.

New Minimum Wage

Speaking of New York State, January 1 also marks the date for further increasing New York’s minimum wage rate. I’ll leave this one to the experts. Here is a link to the Bond Schoeneck & King labor law update. I also like to remind people that because New York’s minimum wage varies by region, it also impacts the amount of money that can be restrained. Here is guidance DFS released on this issue in 2017. Remember that this impacts your credit union whether you are state or federally chartered.

New York Further Complicates Foreclosures

In the closing days of the year, the Governor signed important legislation impacting New York’s byzantine foreclosure process. One bill, S5160, provides that a plaintiff’s lack of standing in a foreclosure action is not waived if the defendant homeowner fails to raise the defense in responding to the initial foreclosure papers. This is a big deal because it means that there will be even more uncertainty and delay when foreclosing on property in New York.

This was not the only bill dealing with foreclosure that the Governor gave his blessing to. He also signed off on a bill which shortens the redemption period for the payment of taxes on vacant and abandoned property. Take a close look at this bill.

Another Important HR Bill

As you can see, the Governor was busy over the holiday season. He also signed another important HR bill designed to ensure equal pay for civil servants  in protected classes. Although this does not apply to your credit union, it  is part of a larger framework in which all NY employers should be taking  a more systemic approach to analyzing wage discrepancies within their own organizations.

January 2, 2020 at 9:24 am 1 comment

Where NY Stands on Hemp Legalization

When I last talked about this subject, I promised you that I would seek additional information about the current state of the law regarding hemp production now that it has been removed as a schedule I drug. The bottom line is this: those of you who have relationships with authorized growers and processors as a result of 2014 changes to the law can continue with those relationships. However, for those of you who do not have those relationships, it will probably take several months before entities can begin legally growing hemp in New York State.

As I talked about in a previous blog, in 2014, the federal government authorized states such as New York to offer hemp growers the opportunity to work with academic institutions. In 2018, the federal government legalized hemp but mandated that the U.S. Department of Agriculture establish a legal framework for states wishing to authorize the industry. The USDA has now issued temporary regulations and is accepting comments. The Association will be commenting.

After these regulations are finalized, New York State will have to promulgate its own regulations, as well as get approval for its program from the USDA. This process will take several months to complete, and until the process is done, the broader hemp authorization is effectively blocked.

On a practical level, here are my takeaways given the state of affairs. Most importantly, for those of you operating under the 2014 authorization, the status quo remains in effect. For those of you seeking to work with producers authorized under the 2018 legislation, there is much you can start to do to prepare for the legalization, such as due diligence and establishing policies and procedures which you can finalize and adjust once the regulatory framework has been set. However, what you should not do is assume that hemp is legal for all purposes in New York State right now.

Second Chance Guidance Finalized by NCUA

Here’s an important one for your HR people.

At its board meeting yesterday, the NCUA finalized new guidance explaining steps you should take when you find out a job applicant or existing employee has been convicted of a crime which may disqualify them from employment in your credit union. As I explained in this blog, these changes are long overdue. On a more cautious note, more and more scrutiny is being placed on employment practices as they relate to people who have been convicted of crimes. Read this guidance and update your policies and procedures accordingly.

Do we really need all Christmas music all the time?

I freely admit to being a glass half empty kind of guy. That being said, I think my cynicism is fully justified when it comes to the onslaught of 24 hour Christmas music a month and a half before the big day. Don’t get me wrong, if you want to listen to 24 hours of Christmas, get some headphones and satellite radio, and go crazy. But for those of us who watch too many sports, we are already being inundated with a Christmas season that now begins the day after Halloween. Too much Christmas too early takes too much fun out of what should be an upbeat time of year.

On that happy note, happy holidays, and enjoy your weekend.

November 22, 2019 at 9:49 am Leave a comment

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Authored By:

Henry Meier, Esq., Senior Vice President, 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. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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