Posts tagged ‘CDC’

End Of CDC Protections Puts Focus Back On NY State

Standing on tenuous legal ground (second entry), the Biden administration announced Saturday that the CDC would no longer be extending the national eviction moratorium beyond July 31st. The announcement means that, absent highly unlikely federal legislation extending the moratorium, the action returns to the state level. Most importantly, with or without the federal moratorium, New York State’s eviction and foreclosure moratorium on most properties remains in effect until August 31st.

These FAQ’s on New York’s Department of Financial Services’ website remind New Yorkers of their rights under state law. The bottom line is, with or without the changes to federal law, August 31st remains the key date for foreclosure and eviction purposes in New York State.

September 1st also remains the key date for mortgage servicers who have to comply with the CFPB’s nuanced regulations intended to provide delinquent homeowners additional notice of forbearance options which may be available to them.

Looking at the big picture, the CFPB remains concerned that nationwide the coming weeks will witness a huge surge of evictions and foreclosure proceedings. It has put servicers on notice that it will be keeping a close eye on their conduct and you can bet that state regulators will be taking a similar approach.

August 2, 2021 at 9:31 am Leave a comment

What the CDC’s Announcement Means for Your Credit Union

The CDC’s announcement that it was altering its guidance to encourage vaccinated individuals to wear masks indoors in areas with substantial and high transmission rates may very well result in your credit union having to refine its workplace policies and procedures. The Governor issued a statement indicating that the state is reviewing the announcement. In the past the state has used CDC guidance to establish the baseline expectations for businesses in New York. Here is what we know for sure.

The state lifted its mask mandate for fully vaccinated individuals because, as of June 15th, 70% of New Yorkers had received at least one dose of the vaccine. What’s changed? The Delta variant of the virus has proven to be particularly tenacious and evidence is emerging that even fully vaccinated individuals can transmit the disease. Plus there are still a substantial number of individuals reluctant to get vaccinated. As can be seen from this map issued by the CDC, New York State has substantial numbers of new COVID cases.

The surging virus has forced employers to reconsider legal options when it comes to keeping their workplace safe. For example, the Veterans Administration announced that it was mandating that some of its employees get vaccinated and New York City is taking similar steps. The shift to a more aggressive posture reflects the mounting number of administrative rulings and judicial decisions which have reinforced that employers can mandate employee vaccinations provided they are mindful of genuine and sincere religious objections as well as the need for ADA accommodations.

One bellwether case that the legal community is watching is Bridges v. Houston Methodist Hospital, 2021. The case involves a nurse who was fired by the hospital after refusing to get vaccinated. The case is one of the first in which a federal court has directly addressed an argument, popularized on the internet, which contends that since the vaccines were approved on an emergency basis by the Secretary of Health and Human services they can’t be mandated by employers. The plaintiff also contends that the status of the vaccines mandates that employers explain the potential benefits and risks of taking the vaccine.

The district court swiftly rejected this argument. According to the court, federal law permits the Secretary of Health and Human services to authorize the vaccines on an emergency basis. Crucially, according to the court, “it neither expands nor restricts the responsibilities of private employers; in fact, it does not apply at all to private employers like the hospital in this case.”  This case is currently up on appeal before the Fifth Circuit.  If this case doesn’t give employers confidence to mandate vaccinations, the Secretary of Health is expected to approve the vaccine on a non-emergency basis sometime in the fall.

In addition to this case, in May the EEOC issued guidance authorizing employers to mandate vaccinations consistent with Federal Civil Rights Law.

And then of course there is New York State’s Hero Act. At this point the law requires nothing more than for employers to have an infectious airborne disease plan in place by August 5th. The plan only needs to be activated in the event that the Commission of Health issues a declaration that an airborne infectious disease presents a serious risk of harm to the public health. No such announcement has been made but recent events underscore the need to make sure you are ready to comply with NY’s law.

July 28, 2021 at 9:40 am Leave a comment

Governor Extends Vaccine Eligibility as CDC Extends Eviction Moratorium

In case you haven’t already heard, Governor Cuomo announced yesterday that starting today individuals 30 years and older can schedule vaccinations and individuals 16 years and older can start scheduling appointments on April 6th.

Is the CDC Guilty of Regulatory Overreach?

The Governor’s announcement came the same day that the Center for Disease Control announced that it would be extending a moratorium on evictions.  Aside from its practical significance, the CDC’s aggressive use of its regulatory authority may provide a vehicle for federal courts to further chip away at the judicial deference that has been afforded to agency determinations over the last 30 years.  As readers of this blog know, as the most heavily regulated financial institutions in the country, credit unions have a keen interest in any litigation dealing with the extent to which agencies can regulate in the absence of explicit congressional authority.

If you’re wondering why the CDC has the authority to block evictions in the first place, you are not alone.  Yesterday the United States Court of Appeals for the Sixth Circuit refused to issue a stay of a lower court ruling that ruled the CDC had exceeded its authority when it extended the eviction moratorium without Congressional authorization (Tiger Lily, LLC v United States Dept. of Hous. and Urban Dev., 21-5256, 2021 WL 1165170, at *3 [6th Cir Mar. 29, 2021]).  The ruling sets the stage for further litigation which may impact the status of evictions nationwide and could produce important rulings on how much authority agencies have to interpret federal laws.  Remember, that no matter what the court decides, states such as New York have the authority to issue eviction and foreclosure moratoriums and have done so.   

For those of you scoring at home (that’s a baseball reference since opening day is just two days away), in March of 2020 the CARES Act imposed an eviction moratorium that expired on July 25, 2020.  The CDC director extended this moratorium through December of last year.  Congress extended the moratorium until January 31st and when this authority expired, the CDC director extended the moratorium until March 31st and further extended it yesterday.  In exercising this authority, in the absence of congressional authorization, the director is relying on 42 USC § 264 which authorizes the CDC, acting through the Surgeon General to make and enforce regulations that “in his judgement are necessary to prevent the introduction, transmission or spread of communicable diseases.”  The logic of the CDC is that, in the absence of a nationwide eviction moratorium an increase in homelessness and crowded living arrangements will contribute to the spread of the disease. 

In refusing to uphold the CDC’s previous order, the Sixth Circuit explained that “…we cannot read the Public Health Service Act to grant the CDC the power to insert itself into the landlord-tenant relationship without some clear, unequivocal textual evidence of Congress’s intent to do so. Regulation of the landlord-tenant relationship is historically the province of the states.”

NACHA Releases List of Top ODFIs

Just in time for this morning’s blog, Nacha has issued this press release detailing the most active financial institutions when it comes to ACH transactions over the past year.  This year’s statistics are more intriguing than usual because they provide a snapshot of how the pandemic has accelerated the trend towards electronic payment options.  According to Nacha the top 50 originating financial institutions processed more than $23B in payments last year, an 8.4% increase and the top 50 receiving institutions witnessed an 11% increase.  What I find intriguing about these numbers is how the ACH network continues to be dominated by a relative handful of financial institutions even as the Nacha network becomes more ubiquitous. 

March 30, 2021 at 9:55 am 2 comments

The Most Informative Blog of the Year

So much for a quiet end to the year. With Congress still rushing to get a COVID relief bill done, NCUA rushing to get some important regulations done, the Russians looking to get some important hacking done and the CDC trying to execute the vaccine roll-out, the past few days have been among the most impactful for the credit union industry this year. Here are the highlights of what you need to know before breaking for your holiday vacation.

NCUA Finalizes Subordinated Debt Regulation

NCUA finalized regulations which will allow complex credit unions to utilize subordinated debt to help meet their risk-based capital requirements when they kick in in 2022. Additionally, for the first time, eligible credit unions can offer subordinated debt to natural persons. Those are just two of the highlights from an extremely important regulation, which creates an updated framework for credit unions that wish to use what used to be called secondary capital. 

One of the big debates going on within the industry has been the extent to which credit unions should be allowed to use secondary capital. On the one hand, former NCUA Board Chairwoman Debbie Matz encouraged eligible credit unions to get their low-income designations in part so that they could utilize secondary capital. In recent years, the pendulum has swung back the other way, with NCUA issuing strict guidance for the approval of secondary capital plans. Individuals who feel that NCUA is too tough on this issue will find little comfort in the final regulations. NCUA now considers subordinated debt to be a security, meaning that credit unions will have to comply with detailed and complicated legal disclosures and oversight provisions. I’ll have more on this in the future, but it’s not too early to start thinking about who in your credit union is going to be designated the in-house security law expert. 

In a typical board meeting, the finalized subordinated debt rule would be more than enough work, but NCUA also took the opportunity to propose several new and important regulations. These include permitting multiple SEG credit unions that participate in shared branching networks to utilize shared branches to satisfy branch location requirements when expanding into new areas. The key is that credit unions will no longer have to own a portion of a shared branching network in order to take advantage of this increased flexibility. The board also extended temporary regulations promulgated in response to COVID-19, which provide regulatory relief to credit unions. Over the strong objections of Board Member Harper, the Board proposed a rule that would give credit unions greater flexibility when it comes to overdraft protections. Specifically, credit unions can now give consumers more than 45 days to either cure the overdraft or enter into a traditional loan. In objecting to the proposal, Board Member Harper argued that the proposal will hurt consumers who he feels need more protection against overdraft programs, not less. 

The NCUA still wasn’t done. It has proposed regulations permitting federal credit unions to purchase servicing rights from other federally insured credit unions. This is an aggressive move by NCUA, which has in the past been hesitant to propose such a change on safety and soundness grounds. 

Show MeThe Money

The NCUA also got some important budget issues out of the way. First and foremost, the normal operating level of the share insurance fund will remain at 1.38% for the time being, and with new Board Member Kyle Hauptman now officially onboard, the NCUA approved next year’s budget. As part of the process, the NCUA made regulatory changes to the overhead transfer rate (OTR)  and the operating fee schedule. The OTR is the formula used to determine how much money NCUA needs to fund its share insurance examination expenses. In recent years it has come under scrutiny since it allows NCUA to assess not only federal credit unions, but state chartered ones as well. The budget was passed over the objection of Board Member Harper, who continues to advocate for greater scrutiny of credit union compliance with consumer protection laws.

EEOC Issues Vaccine Guidance

Many credit unions are considering whether or not they should mandate that their employees get the COVID-19 vaccine. On Wednesday, the EEOC issued this important updated guidance explaining the legal issues that employers should consider if they decide to mandate that their workforce get vaccinated.

From Russia With Love

In a plotline worthy of a John le Carre novel, the size, scope and damage of the recent mass cyberattack, widely believed to be the work of Russia’s intelligence services, continues to grow. It’s hard to believe it won’t end up impacting a large swath of the private sector, and it is certainly something that your IT team should be paying attention to. Here is a blog on the issue published by Microsoft’s President Brad Smith, who has emerged as an authoritative voice on the breach in the absence of a coordinated federal response. 

Believe it or not, there’s much more I could say, but tomorrow is another day. Stay tuned.

December 21, 2020 at 10:01 am Leave a comment


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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