Posts tagged ‘municipal deposits’

The Good, The Bad, and The Ugly as Albany’s Session Comes To A Close

Early this morning, the NYS Legislature came to its unofficial end as the Assembly passed the last measures of an extremely active session. Here is a first look at some of the key legislation that will impact CUs if it is approved by the Governor.

In a major legislative accomplishment, credit unions successfully lobbied for legislation which will allow them to participate in the Excelsior Linked Deposit program. The program gives lenders access to state deposits in return for making qualifying small business loans of up to two million dollars. Just how long have credit unions been seeking to participate in the program? Well, one of our volunteer board members lobbied for passage of the bill by showing legislators a letter he wrote in support of credit union participation to the Governor… Governor Pataki.

Credit Unions came up short on legislation which would allow municipalities to place their funds in credit unions but for the first time in at least 15 years, legislation has been voted out of the Senate and Assembly Banks committees. This means that the finance committees will be hearing from plenty of credit unions over the next year.

Finally, credit unions successfully lobbied for passage of legislation which will help bring banking into the 21st century by authorizing the use of remote online notarization. This bill is a win for consumers in general and the elderly and disabled, in particular, who will now be able to more easily get their documents notarized without having to go to a branch. The legislation would also make it easier to sell mortgages on the secondary market.

Now for the bad news. The legislature passed a measure to cap the interest that can be charged on judgements related to consumer debts at 2%. As drafted, the new interest rate would apply to judgements which have been filed but not yet executed prior to the bill becoming effective. If you think that is a recipe for a confusing mess, you’re correct.

Earlier this year, New York’s Court of Appeals wrote a series of decisions restoring a level of common sense to New York’s foreclosure process. The legislature passed a series of measures which chip away at these rulings. For example, Assembly 2502A imposes additional pleading requirements on lenders seeking to foreclose that could otherwise be waived by a homeowner.

Another bill passed by the legislature would extend CRA requirements to licensed mortgage bankers. Crucially, this bill would not apply to credit unions. It would apply to mortgage CUSOs.

Looking ahead, the table has been set for a debate over legislation to impose a California-style data protection framework on NYS. Legislation has been introduced and the Association is seeking to exempt GLB compliant institutions. Get your talking points ready for the trip to Albany next winter.

June 11, 2021 at 9:50 am Leave a comment

Three Things to Ponder As You Start Your Credit Union Day

It’s been another busy week in credit union land.  Here are some of the key things to ponder as you finish your second or third cup of coffee.

Municipal Deposits Bills Advance

Legislation that would finally permit municipalities to deposit their funds in credit unions, if that is where they think they can get the greatest benefit for their taxpayers, jumped a major legislative hurdle yesterday when A7334 sponsored by Assemblyman Pichardo was passed out of the Assembly Banks Committee. Companion legislation- S670 by Senator Sanders– was passed out of the Senate’s Bank Committee earlier this week. Now both bills are in the Finance Committees of their respective chambers with plenty of time left to get this done before the end of the session.

To Mask or Not To Mask, That is the Question

Now that the CDC has modified its mask guidance and Governor Cuomo has followed suit, credit unions in New York State are considering what changes, if any, they are going to make to mask wearing policies for both members and staff. Here are some things to consider as you implement your changes.

First, take the time to read both the entire CDC guidance and the Governor’s announcement. For instance, did you know that even as he announced that New York would defer to the CDC guidance, the Governor stressed that the state’s Department of Health continues to “strongly recommend” that masks continue to be worn in indoor settings where vaccination status of individuals is unknown. In addition, the CDC is continuing to take a more conservative approach when it comes to hopping on the plane for the long awaited return to an in-person conference.

In many ways the HR issues that your credit unions have to navigate are even trickier. For instance, to the extent you give employees more flexibility based on proof of vaccination, remember the need to provide reasonable accommodations under the ADA to disabled persons who can’t get the vaccine for health reasons.

Given these complexities, your changes should, of course, be in writing but stay flexible. With variants raging around the world and this country still nowhere near approaching herd immunity, you can bet you’re going to have to modify your procedures in the coming months.

CFPB Updates Mortgage Lending Guidance

CFPB’s Q&As on TRID compliance are in many ways the Rosetta Stone of mortgage lending. So when I heard that the CFPB had updated its guidance in response to the federal BUILD Act yours truly was a little nervous. Full Disclosure: I had not heard of the BUILD Act. 

The BUILD Act is legislation signed into law by President Trump in early January. It authorizes not-for-profits offering low-interest mortgage loans that meet certain criteria to provide modified loan estimates and closing disclosures. It is a common complaint among not-for-profits that the regulatory burdens imposed on them by TRID make it difficult to provide loans to the people who need them most. I couldn’t agree more. It’s a shame that Congress takes such a narrow view of which institutions could benefit from greater lending flexibility.

May 20, 2021 at 10:03 am Leave a comment

Albany Moves On CU Priorities

Yesterday saw some important movement on legislation impacting credit unions.

First, legislation that would permit municipalities to deposit money in credit unions has been placed on the Senate Banking agenda which meets this Tuesday, May 18th. S670 sponsored by Banking Committee Chairman Sanders is of course a key priority for the industry.

Currently, municipalities, including school districts and local towns throughout the state, are prohibited from placing their money in credit unions even when it could help New York’s taxpayers by generating more interest on public funds and providing much needed competition in an area where banks currently hold a monopoly. We will be coming out with a Call To Action later today.

Secondly, yesterday the Governor signed legislation to exempt from levy and restraint COVID-19 stimulus payments. More specifically, the bill exempts from collection any payment to individuals under the Federal Family First Coronavirus Response Act exemption for emergency relief funds. Any payments to individuals, including tax refunds, recovery rebates, refundable tax credits, and any advances of any tax credits, under the Federal Families First Coronavirus Response Act (FFCRA), Coronavirus Aid, Relief, and Economic Security Act of 2020  (CARES Act), Consolidated Appropriations Act of 2021, and the American Rescue Plan Act Of 2021 (ARPA). The exemption does not apply to child and family support payments. In addition, the bill prohibits financial institutions from exercising a right-of-set-off on these funds. 

The Association joined with CUNA in advocating for stimulus payments to be exempt from levy and restraint.  Congress did not exempt the latest round of stimulus payments from levy and restraint apparently because doing so would have violated budget reconciliation rules which allowed the measure to be passed in the Senate by a simple majority.

May 14, 2021 at 9:22 am Leave a comment

Election Post-Mortem, Continued Gridlock Means Tough Times Ahead

One thing that Barack Obama and Mitch McConnell agree on is that elections have consequences. Although the final results won’t be known for weeks, what appears to be clear from this election is that it did little more than confirm a deeply divided status quo with all sides able to point to evidence that they were the actual victors. For credit unions, this has important consequences which will shape the industry in both the near and medium term. Here is a list of some of those consequences:

  • PPP Relief Delayed – Yesterday, the Federal Reserve once again tinkered with its regulations for the Main Street Lending Program, which was designed to encourage banks and credit unions to make loans to medium-sized businesses not eligible for PPP loans. At the same time, Federal Reserve Chairman Powell issued this extremely thoughtful release in which he once again stressed that without fiscal intervention, the Fed is at the outer limits of what it can do to support a slowing economy. Although Mitch McConnell is committed to getting a stimulus bill through Congress, I really don’t see this happening with a disgruntled, lame duck President Trump in charge and two Senate elections outstanding. This delay has real consequences. The market as a whole is welcoming the apparent gridlock, but investors in regional banks are now recognizing that business activity and consumer spending will almost certainly decrease in the months ahead. 
  • The pandemic continues to spread – In case you missed it because you were glued to John King’s magic wall of vote counts, America experienced its worst single-day count of COVID-19 cases. As Federal Reserve Chairman Powell pointed out, the economy can’t get back to full strength as long as people have to worry about contracting the virus. The good news is that in the coming months, perhaps we will move away from this false dichotomy between economic growth and the need to contain the virus. The bad news is that this means one of the top priorities for your credit union, or any business for that matter, has to be discussing, maintaining and monitoring the criteria you will use in determining how to run your operations during the Second Wave. 
  • Tough times ahead in New York – Let’s be honest. The more democrats have control of the US Senate, the more aid that will come to New York State. Anyone who pays property taxes knows how badly we need it. But with hopes for a big Senate victory fading, New Yorkers are facing an unappetizing choice between budget cuts and tax increases at a time when we need more, not less, stimulus. On the bright side, the economic vice the state may well find itself in underscores the value of giving localities mandate relief in the form of credit unions being allowed to accept municipal deposits. 
  • Let’s Go Get Stoned – Five additional states legalized marijuana in some form or another on election night. Not only did New Jersey legalize cannabis, but even red states have now decided it’s time to take a puff, with Montana, Mississippi and South Dakota joining the ranks. I don’t know what it says about America that pot legalization is one of the few issues we can all agree on, but I will now bet that by the end of the next legislative cycle, banks and credit unions will have clear legal authority to provide banking services to these businesses. If you haven’t already discussed how actively your credit union wishes to engage this business or taken a deep dive into the compliance implications, now is the time. Full disclosure: I made the same prediction two years ago. 
  • Credit Union Tax Exemption is in Play – I’m always hesitant to put too much emphasis on the threat posed to credit unions and their tax exempt status. Too often, I think it distracts us from other more pressing issues. But there are four dynamics which make the coming years particularly treacherous for the industry. Even without subsequent stimulus packages, the country has gone on an unprecedented spending spree which will have to be repaid; democrats are going to be pushing hard for tax reform, especially as the pandemic exacerbates economic inequality, three – banks have already been laying the groundwork for a targeted attack against so-called “larger” credit unions and lastly – they may find common ground with the younger, more progressive AOC wing of the democratic party, which is increasingly looking to other entities – such as the Post Office and CDFIs – to provide financing for the underserved. The action points for credit unions are obvious, but if I could make myself king for a day, I would mandate that every credit union draw up a concrete list of the products, services and activities it undertakes as a result of its tax exemption. As an industry, we like to say that we don’t pay corporate taxes because we are not-for-profit institutions. In fact, we don’t pay taxes because of a policy judgment by Congress that the financial value of having not-for-profit financial institutions available to the American public outweighs the fiscal benefit of taxing credit unions. Each and every institution benefitting from that tax exemption can, should and ultimately will have to demonstrate this fact in concrete terms to elected officials anxious for cash. 

Believe it or not, there are many other points to raise, but it’s a beautiful day and I’ve depressed my readers enough. Besides, I still have to brace myself to watch the Giants play the Washington Football Team. Perhaps Ron Rivera will hand us another victory. Have a good weekend. 

November 6, 2020 at 10:25 am Leave a comment

It’s Congress, Not the Tax Exemption, That is Killing Community Banks

Cachet Financial Services, the company that I talked about in my blog this past Thursday, is going out of business. Cachet is the company that facilitated ACH payroll transactions for MyPayrollHR, whose founder has admitted to engaging in fraudulent transactions totaling in the multi-millions. In my blog on Thursday, I described the relationship that led to tens of thousands of employees not having immediate access to their paychecks. In today’s blog, I’m going to point out how the troubles of Pioneer Savings Bank underscore just how counterproductive and intellectually dishonest the attacks on credit unions by community banks like Pioneer are.

Pioneer has been caught in the MyPayroll mess. It stands to lose at least $35 million because of banking services it provided to the payroll processing company. Pioneer is based in the Albany Capital Region and in January of this year, it reorganized into a mutual holding company. More and more “community” banks have reorganized into these structures. As explained in my trusty Banking Law Handbook, the MHC structure is designed to permit the advantages of being in a holding company structure, which allows the banks to issue stock and gain other access to the capital markets while providing them protection against the ever-present threat of a takeover. The problems faced by Pioneer are serious enough that it felt the need to refile its SEC disclosures, leading to an announcement that it was in danger of being delisted by NASDAQ.

As I explained in my previous blog, my purpose has always been to aid credit unions without bashing banks. It’s extremely difficult to hold my fire in this case, though, because Pioneer has been one of the banks in New York quickest to criticize credit unions and oppose common sense innovations such as permitting credit unions to compete for municipal deposits, in part on the grounds that credit unions are not sophisticated enough to take on these responsibilities. I’m not going to take this opportunity to argue that because of Pioneer’s troubles, no savings bank should be allowed to take on huge commercial loans or accept municipal deposits. It would be dumb to suggest that the mistakes of one or two institutions should be held against an entire industry. Then again, that’s the type of nonsense that the banks argue on both the state and the federal level every day.

In fact, there is much that credit unions and banks could agree on, if only the banks would look at the facts. Most importantly, the consolidation of the banking industry with the resulting demise of the true community bank has nothing to do with the fact that credit unions don’t pay taxes, and everything to do with the deregulation of banking, which has been gradually progressing for decades, but put on overdrive during the Clinton Administration. This has placed tremendous pressure on traditional community banks such as Pioneer to expand into regional entities, or risk being merged out of existence. Most notably, with the passage of the Regal Neale Act, community banks lost the ability to hold their own in specific states. It is not credit unions that have triggered the ensuing merger mania, but the resulting dynamics that this race to get bigger has unleashed.

Banks have always disliked credit unions, and if they could make them disappear, they gladly would. However, it was just a generation ago that the primary focus of community banks wasn’t on destroying the credit union industry, but on ensuring that the federal regulatory framework left space for both small and larger financial institutions. Unfortunately, that has fundamentally changed, and much of the extra zest with which community banks such as Pioneer and bankers associations attack credit unions on these days reflects the fact that they have largely lost the ability to shield themselves against their larger banking competitors. As explained in this phenomenal law review article, “today it is a relatively small group of large diversified financial companies, rather than the far more numerous group of small and community banks, that plays the critical role in shaping the regulatory and legislative dynamics in the financial services sector.”[1]

[1] Saule T. Omarova & Margaret E. Tahyar, That Which We Call A Bank: Revisiting the History of Bank Holding Company Regulation in the United States, 31 Rev. Banking & Fin. L. 113, 196–97 (2011)

 

October 28, 2019 at 9:24 am Leave a comment

Robert E. Lee, RBC, the Supreme Court and the FCC

Image result for robert e leeGood morning folks. I apologize for the late blog but I had a tough time waking up this morning after a great weekend.

First off, what everyone’s been asking about is the legislative session. As I’m sure many of you know by now, we came close but were unable to push legislation permitting municipalities to place money in credit unions over the proverbial finish line. Is this disappointing? Of course it is but let’s not underestimate the progress we made by getting the Assembly Banks Committee to vote in favor of the legislation and getting the Chairman of the Senate Banks Committee to agree to this legislation.

In addition, let’s not underestimate how big of a deal legislative approval of credit union participation in banking development districts is. First, credit union involvement in the program will help more consumers have access to banking services. Second, inclusion in credit unions in the program marks the first time that credit unions will be able to accept public funds in New York State. And finally, passage of the BDD bill shows that persistence pays off. The program has been in existence since 1997.

Forget all that stuff about how making laws is like making sausage. Running into an old colleague last week reminded me of one of my favorite analogues the New York legislative process. To really understand what it’s about you have to put yourself in the shoes of Robert E. Lee, who after surveying the battlefield following the battle of Fredericksburg turned to his colleagues and said, “It’s a good thing war is so awful less we grow too fond of it.” The legislative process may not be pretty and can be incredibly frustrating but it’s also the only one we have and we are certainly better off for engaging in the battle even if we don’t always get all the results we would want.

Okay, I’m getting off my high horse now.

NCUA Delays Risk Based Capital Rule

By a two-to- one vote on Thursday, the NCUA Board proposed delaying until January 1, 2022, the effective date of the Risk Based Capital rules. According to the NCUA, they will “allow the Board additional time to holistically and comprehensively evaluate the NCUA’s capital standards for federally insured credit unions.” This is of course good news for those credit unions with $500 million or more in assets which the RBC rule characterizes as complex. The preamble to the proposed delay regulation singles out the potential use of subordinated debt; evaluation of how federal banking legislation impacted the extent to which community banks have to comply with risk based capital requirements under the economic growth, regulatory relief and Consumer Protection Act of 2018 and the need to provide credit unions more time to prepare for complying with this regulation as among the key reasons justifying a delay.

Since I’m in a generous mood, I am going to offer two additional reasons. (1) I continue to believe that NCUA’s fundamental premise- that it was required to put forward RBC regulations in the first place- is flawed. (2) On a policy level show me the proof that RBC is actually the best approach for regulators to take from a safety and soundness point of view. Yours truly continues to believe that a risk based capital framework simply encourages both banks and credit unions to engage in regulatory arbitrage by overinvesting in products and activities based on regulatory speculation as to how dangerous the activities and investments are.

 Supreme Court Underscores Administrative Confusion Surrounding the TCPA

Since I can’t seem to avoid doing any blog lately without mentioning the TCPA, I want to bring to your attention a decision by the Supreme Court last week which underscores just how messed up – that’s a legal term – the TCPA framework is. In PDR Network, LLC. v. Carlton Harris Chiropractic Inc.,  the  question was whether a fax advertising the availability of a free diagnostic manual constituted an advertisement under the TCPA for which recipients could sue the senders? In 2006, the FCC issued an order stating that unsolicited advertisements  promoting free goods violated the TCPA but a district court disagreed with the FCC’s interpretation.

The question before the court was whether another statute, the Hobbs Act, only allowed federal appellate courts and not district courts to reverse FCC rulings. The Supreme Court’s answer to this question? It’s not sure. It sent the court case back to the lower courts to determine whether the FCC’s 2006 ruling was a “legislative rule” in which case the District Court went beyond its authority or if the FCC’s ruling was more analogous to a court’s interpretation for the statute in which case, a district court has more freedom to come to its own conclusions.

I know this is in the weeds stuff but given the importance of administrative rulemaking procedure in establishing the rules to which all credit unions are subject, it’s actually important to pay attention to.

June 24, 2019 at 9:57 am Leave a comment

Municipal Deposit Bill Slated To Be Voted On by Assembly Banks Committee

Greetings with a special shout out to those of you who attended the Association’s Annual Convention at the Sagamore. I know there are more beautiful places in the world to spend a weekend but I have never seen them.

This is shaping up to be an extremely eventful week in New York State credit union land. A couple of hours after our annual meeting ended we received word that the Assembly Banks Committee will be holding a committee meeting during today’s legislative session to act on a bill that would authorize municipalities to deposit funds in credit unions (NY-AB 3262). Because the meeting is being held “off the floor” I can’t give you a precise time for the meeting but Association staff will be on hand and I will be twittering out the results as soon as I get them.

Of course municipal deposits aren’t the only issue with which the legislature is dealing. The legislation under consideration will keep your HR people busy for the next several months. For instance, legislation is under consideration that would ban employers from asking about an employee’s salary history. (A05308B)

In addition, if press reports are correct, three way discussions are underway to legalize the recreational use of marijuana. Finally, there are also proposals to more expansively define sexual harassment under New York State law.

The legislature is scheduled to leave on Wednesday but that’s looking increasingly unlikely. My personal prediction is that the session will end Friday morning at 3:30am.

 

June 17, 2019 at 8:30 am 1 comment

Facebook Has A New Pen Pal: The Senate Banks Committee

On Friday, the Chairman and Ranking Member of the Senate Banks Committee sent a politely worded letter to Facebook inquiring about its plans to move aggressively into the payments market by offering its users the opportunity to buy products directly from merchants using a Facebook backed coin or cryptocurrency depending on how nefarious you want to make its plans sound.

Why is this a big deal? Well how much money do you make off credit and debit card transactions issued by your credit union? If Facebook successfully integrates the coin payment platform into its infrastructure this would mean that 1/3 of the world’s population could start using Facebook to facilitate purchases, making Facebook an overnight threat to Visa and MasterCard.

In their letter to Facebook, following an article describing Facebook’s plans in the Wall Street Journal, the Senators explain that in addition to Facebook’s cryptocurrency ambitions, “privacy experts have raised questions about Facebook’s extensive data collection practices and whether any of the data collected by Facebook is being used for purposes that do or should subject Facebook to the Fair Credit Reporting Act.”

As with so many other aspects of its growth Facebook is somewhat clumsily taking aim at the financial sector. In addition to questions about its cyber currency ambitions, it is currently being sued by HUD over claims that it violates its advertising platform allows lenders to effectively engage in digital redlining by choosing such finely tuned demographic target audiences in such a way that lenders can avoid offering financial products and services to minorities.

Assembly To Hold Municipal Deposit Hearing Next Monday

In case you haven’t heard, the Assembly Banks and Local Governments committee will be holding a hearing on municipal deposits next Monday. An assortment of credit union, bank and local government organizations have been invited to testify. This is a key opportunity for credit unions to respond to banker municipal deposit myths and finally allow public tax dollars to be placed in those financial institutions where they will most benefit taxpayers.

Department of Treasury Issues OFAC Guidance

I’ve been analyzing this guidance for a couple weeks now trying to figure out how significant it is and why it was issued in the first place. It seems to me that nothing in this release should be a surprise to anyone who has tried to comply with OFAC which I’m assuming almost all of my faithful readers have. Nevertheless, any time the Department of Treasury comes out with guidance on this issue you should read it and compare your practices with those expected by the regulator.

May 13, 2019 at 8:45 am Leave a comment

This Year’s Federal and State Priorities

Today marks the ceremonial start of New York State’s legislative session with the brand new Senate Majority taking over at 1:00 p.m. The Governor’s State of the State, which used to kick off the legislative session, is scheduled for later this month.

Meanwhile, the NCUA released its annual letter to credit unions detailing what its examiner priorities will be when they visit credit unions in the coming year. For you football fans out there, I like to think of this as the equivalent of the points of emphasis that the NFL tells referees to follow with the result that the first two weeks of any football season features too many penalties. Anyway, here is a look at some of the key federal and state priorities.

Meet The New Boss of New York

A historic transfer of power will take place today when Andrea Stewart-Cousins becomes the Democratic Senate Majority Leader. Just how historic is this? Since the end of WWII, except for brief spells, the Senate Majority in New York has been a Rockefeller republican majority. In contrast, since the aftermath of Watergate, Democrats have taken firm control of the Assembly and never looked back.

Against this backdrop, the Association is hopeful that this new mix brings new opportunities to advance these issues:

Municipal/public deposits; Remember, New York is one of the minority of states that doesn’t allow local government agencies to place money with credit unions. The result of this banker monopoly is that New York tax payers don’t get to see their money placed where it would generate the best returns. Last I checked choice is a good thing.

Data Security; Ideally, the federal government would take the lead on this issue but in the absence of federal action there are steps the state could take to make merchants responsible for the cost of data breaches caused by their own negligence as well as making sure that all businesses are subject to the type of baseline cybersecurity requirements to which banks and credit unions have long been subject.

Foreclosure Reform; New York State has been among the leaders in ensuring that homeowners have adequate protections when they fall behind on their mortgage payments and it should remain so. But there is a middle ground between adequate due process and excessive delays which do nothing but bring down the value of property in neighborhoods by keeping people in houses they can’t afford to maintain properly. Recently, Fannie and Freddie announced that services of mortgage loans in New York City would have 2,190 days to foreclose on delinquent property before they face penalties and 1,740 outside of the Big Apple. In contrast, there are states where lenders have as little as 420 days.

State Charter Enhancement; One other thing we will be advocating for is continuing our momentum in making the state charter a more attractive option for credit unions. We’ve already made great strides in this area but with the state’s wildcard power due to expire and operational issues arising there is still more to be done.

Supervisory Priorities

The NCUA’s supervisory priorities for 2019 contain many of the usual suspects. Of course, the Bank Secrecy Act is on the list but this year’s emphasis will be on your credit union’s policies and procedures for identifying “beneficial owners.” Other priorities include concentration of credit; HMDA data collection (See yesterday’s blog); the Military Lending Act; Regulation B compliance and “information security maturity assessments with the Automated Cybersecurity Examination Toolbox (ACET).” My God that sounds worse than a trip to the dentist. This year examiners will also be asking credit unions what they are doing to prepare for our new best friend CECL (Current Expected Credit Losses). Be sure to look at the whole list and keep this posted by your desk throughout the year.

January 9, 2019 at 9:38 am Leave a comment

Six Things You Need To Know From Last Week

Because of a tight schedule at CUNA GAC and some wrath-of-God weather at the end of the week, yours truly was only able to get out one blog last week. I have a lot to get off my chest and the following is a list of topics I reserve the right to follow up on in the coming days and weeks.

More Taxi Medallion Fallout

In case you missed it, First Jersey Credit Union was shut down by state regulators and the NCUA on Wednesday. Its assets were assumed by USAlliance Federal Credit Union based in Rye, New York. The credit union was done in by an excess of medallion loans. Medallions are currently valued well under $200,000. According to its website, the credit union is open to “Anyone who lives, works, worships or attends school in Bergen or Passaic County, areas of Essex, Hudson, or Union County and family members of existing members, is eligible for membership.”

CFPB Requests Information On Its Information Collection Processes

As someone who has been harshly critical of the CFPB’s use and publication of consumer complaints, this announcement warms my heart. “The Bureau of Consumer Financial Protection (Bureau) is seeking comments and information from interested parties to assist the Bureau in assessing potential changes that can be implemented to the Bureau’s public reporting practices of consumer complaint information.” The Bureau will be accepting comments for 90 days after publication in the Federal register.

Another CU ADA Lawsuit Dismissed

Let’s face it. Judging by the constant discussion of the issue in Washington last week, the industry is in a foamed-mouthed frenzy over ADA website lawsuits. So I’m happy to report that the argument that anyone seeking to sue a credit union must demonstrate they could become a member gained steam recently with another case out of Federal Court in Virginia, dismissing a lawsuit on standing grounds.

Study Calls For Review of BSA “Derisking” Practices

Are the risks of non-compliance with the Bank Secrecy Act severe enough that it is actually making it difficult for persons who live in high risk money laundering areas to obtain banking services? That is the suggestion of this GAO report which analyzed the availability of banking services along the Southwest border. In the coming months, if you see FinCEN reexamining some of its requirements, or regulators taking a closer look at financial institutions which choose not to provide banking services rather than comply with the BSA, this is why.

As Interest Rates Rise So Do Banker Complaints About Municipal Deposits

That is the gist of this article in the American Banker, which reports that banks are bracing for Municipalities to demand more deposit interests now that interest rates are on the rise. It seems to me that states like New York could benefit from increasing the number of institutions that municipalities could turn to for placing their money. After all, if banks truly don’t want municipal business, I’m sure we could find some credit unions that do.

And The Oscar Goes To…

 If you get a chance, you should watch the frontline documentary “Abacus: Small Enough To Jail,” which was nominated for an Oscar. It details the aggressive efforts of the Manhattan DA to prosecute the alleged malfeasance of a small community bank while doing nothing to take on the larger institutions responsible for the mortgage meltdown.

 

March 5, 2018 at 9:29 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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