Posts tagged ‘NCUA’

NCUA to Credit Unions:  Explore Distributed Ledger Technology, But Be Very, Very Careful

As I was reading NCUA’s industry guidance, giving credit unions the green light to explore the potential uses of Distributed Ledger Technology (DLT), I was  reminded of the scene in Young Frankenstein where Gene Wilder’s Dr. Frederick Frankenstein  and his assistant, Marty Feldman’s Igor, are about to go down to a dungeon from which they hear mysterious noises; Igor says “Master, it might be dangerous, you go first.” 

Now, don’t get me wrong.  I am not minimizing the importance of the letter and I think NCUA deserves credit for coming out with this opening guidance.  It accomplishes two main goals.  First, it ensures that credit unions can at least explore the potential uses of DLT without running afoul of their regulator.  Secondly, as explained by the Agency, “[t]his letter also signals to the broader financial and technology communities that credit unions are a market to consider when designing products, considering partnerships, or making investments.”  This is a particularly important announcement for an industry comprised of institutions who will almost all have to work with vendors. 

On the one hand, NCUA recognizes that credit unions have to feel free to consider using DLT, the problem is that no one knows precisely what those uses are going to be or how they may evolve.  As a result, NCUA’s letter is understandably simply a first step in what promises to be an increasingly complex regulatory process, and any credit union thinking seriously about integrating DLT should make sure they do so only after working with their regional regulators.   

Nevertheless, for those of you looking for specificity at this point, you will be disappointed.  Most notably, the memo does not provide a definition of DLT; instead, it includes a footnote providing further background information from other sources including information from the National Institute of Standards and Technology.  The information provided by these sources will create as many questions as answers for those of you in charge of evaluating this issue. 

As I have explained in this blog, virtual currencies may come and go quicker than Elon Musk can decide to buy Twitter and then announce he doesn’t want to buy Twitter, only to confirm that he does want to buy Twitter, but DLT is going to transform any industry that stores and transfers information.  It provides a mechanism for a network of computers to confirm and store proof of transactions without the need for third parties such as credit unions and banks.

Nothing else in the guidance should surprise you.  Similar to the letter released earlier this year authorizing credit unions to partner with third-party virtual currency vendors, the letter emphasizes the need for due diligence and compliance with all applicable state and federal law.  This means that even though this guidance applies to both federal and state-chartered institutions, state charters should also reach out to New York’s Department of Financial Services to clarify the conditions under which they can provide similar services. 

On that note, enjoy your three-day weekend.  Next week is the end of the State Legislative Session so stay tuned for any updates and recaps that the Association will be providing in the days ahead. 

May 27, 2022 at 9:26 am Leave a comment

Getting Ready For The Legislature’s Stretch Run

Yours truly is back from his Carolina vacation and has caught up with enough e-mail to finally post again.  While there is a lot I want to get off my chest – there is only so much my wife wants to hear about the banking industry during an eight-hour car ride – I think I will start with a description of some of the key legislative and regulatory issues that will be impacting New York state credit unions in the coming weeks. 

Not only is this an election year, but it is an election year following the redrawing of the election map, meaning that the legislature will want to get out of town as quickly as possible, especially with primaries scheduled for June. 

One of the most important issues we are dealing with is a bill that would retroactively impose strict new requirements on lenders foreclosing on property (S5473D Sanders).  As many of our members have already explained to their representatives during our state GAC, as currently drafted, the retroactive application of this bill and the ambiguity regarding the right of lenders and borrowers to negotiate modifications without running out of time to foreclose on property will actually make it more difficult to work with delinquent borrowers.

We are also continuing to advocate for changes to a proposed data portability and privacy bill which does not currently exempt financial institutions (S6701A Thomas / A680B Rosenthal) as well as continuing to express a strong opposition to state level anti-trust legislation (S933A Gianaris) which could negatively impact the ability of credit unions to help provide communities banking services, particularly in underserved areas. 

All this is taking place as New York’s highest court hears an appeal of a case challenging the legality of New York’s redrawn Congressional map which could allow Democrats to pick up four additional seats as they struggle to keep their majority.  Expect a decision to come down shortly.

As for the federal level, there is an interesting article in today’s WSJ reporting that privacy legislation may finally be getting traction in Congress.  This is potentially good news, provided the legislation does not impose additional requirements on credit unions and the legislation preempts state law.  But I still remain skeptical that Congress will be able to get legislation done this year.  Hopefully, I am wrong.

On the regulatory front, we are still waiting to see what will come out of the CFPB’s initiative against so-called “junk fees”.  The president of the American Bankers Association has already taken to publicly accusing the Bureau of going rouge.  My bet is that we are going to be hearing a lot about overdraft fees in the coming months. 

Last, but not least, let’s hope that the NCUA is going to be following up on its reach-out to credit unions by providing additional guidance as credit unions begin to explore the banking issues raised by distributed-ledger technologies and cyber currencies.  On May 11th yours truly will be discussing the state of regulation in this area and how it is going to impact your credit union as part of the Southern Tier’s Spring Chapter Event in Binghamton.  I noticed it’s at an Irish pub, so let’s share a half-and-half as we ruminate on how technology is once again upending the way banking is done.

Full disclosure, my wife and kids won’t be attending.  They already heard enough about how the NCUA needs to move more quickly and provide additional guidance in this area.  It was one of my favorite topics as we drove around North Carolina.

April 27, 2022 at 9:57 am Leave a comment

Why Member Expulsion Legislation Is a Big Win

Greetings Folks, with a special shout out to those of you who attended our State GAC.  It was nice to be roaming the halls of the Capitol once again! 

Speaking of GAC meetings, it’s been around three weeks now since CUNA held its annual GAC meeting and I wanted to talk about recently passed federal legislation, which credit unions lobbied for, to make it easier to expel abusive members.  It is called the Credit Union Governance Modernization Act of 2022.  I get the sense that the industry as a whole doesn’t appreciate how important the legislation is for federal credit unions. 

As I am sure most readers of this blog know, under 12 USC 1764, members can only be expelled from a federal credit union by a majority vote of the Board of Directors for non-participation.  Otherwise, for a member to be expelled from a federal CU, there must be a 2/3 vote of members present at a special meeting.  In some ways, this statute is a quaint anachronism since it reflects the importance that the founders of the credit union movement placed on membership.  The problem is that the statute makes it extremely difficult and impractical to get rid of members for abusive or fraudulent conduct.  As one of New York’s credit unions pointed out at a virtual meeting in DC, it is easier for airlines to ban someone from flying than it is for credit unions to ban an individual who is abusive toward staff. 

The good news is that legislation included in the recently passed consolidated budget act will change this situation when it takes full effect in approximately 18 months.  Among other things, a federal credit union’s board will now be allowed to expel a member with a 2/3 vote for, for example, substantial or repeated violation of the membership agreement, significantly disruptive or abusive behavior, and a conviction of fraud or illegal activity.  Members may request a hearing before the board and even petition for reinstatement.  But the key point is that once this law takes effect, you will be able to swiftly get rid of bad actors.

NCUA has 18 months to promulgate regulations further defining the statute’s terms.  In the meantime, remember that even in the absence of the statutory change, provided your credit union has a policy in place, it can severely restrict a member’s activities.  For example, I know of at least one FCU that mandates that disruptive members conduct all their banking by mail. 

On that note, enjoy your day!

March 23, 2022 at 9:05 am 2 comments

Five Things You Need to Know As You Start Your Credit Union Week

Here is a surprising long list of things you need to know that happened over the past few days.  Most of these would be worthy of a blog on their own, and may in fact expanded upon at a future date.  I am sure you can’t wait.

COVID Order Lifted by Department of Health

On Friday, the Department of Health announced that it was no longer designating COVID-19 as “an airborne infectious disease that presents a serious risk of harm to the public health under the HERO Act.”  This means that you may stop taking all those additional precautions outlined under your HERO Act workplace safety plan.  Let’s hope that we don’t have to reinstate these precautions in the near future, but remember that you have an ongoing obligation to ensure that your business is prepared to activate these plans.  As a matter of fact, you may want to see if there are any adjustments that should be made based on your experience implementing this mandate.

Service Facility Guidance Issued

On Friday, the NCUA issued this letter to credit unions providing additional guidance to multiple common-bond federal credit unions seeking to use shared service facilities, such as New York’s USNET, to satisfy field of membership and/or underserved area requirements. 

Prior to the regulation’s adoption, only multiple common-bond credit unions that had an ownership interest in a shared branch network could use network facilities to satisfy branch requirements when taking on a new membership group or moving into an underserved area.  The regulation extended this authority to any multiple common bond credit union that participates in a shared branching network.

The letter notes that:

For multiple common-bond federal credit unions adding occupational or associational groups, a service facility must allow a member to deposit shares, submit loan applications, or receive loan proceeds. For multiple common-bond federal credit unions adding an underserved area, a service facility in the underserved area must allow a member to deposit shares, submit loan applications, and receive loan proceeds.

New York State Strengthens Sexual Harassment Laws

On March 16, Governor Hochul signed legislation to further strengthen protections against individuals who claim they have been retaliated against by their employer for either reporting or assisting others in reporting harassment and anti-discrimination claims under state law.  Specifically, Chapter 140 of the Laws of 2022 explicitly makes it unlawful to disclose an individual’s personnel file in retaliation for testifying or bringing a harassment claim against an employer.  The law is already in effect and authorizes the Attorney General to take action she suspects of violating this provision.

Medical Bills to be Excluded from Credit Reports

In a classic example of claiming victory and conceding defeat the Wall Street Journal reported (subscription required) on Saturday that most disputed medical bills will be excluded from credit reports. 

Beginning in July, the companies will remove medical debt that was paid after it was sent to collections. These debts can stick around on a consumer’s credit report for up to seven years, even if they are paid off. New unpaid medical debts won’t get added to credit reports for a full year after being sent to collections.

The announcement comes at a time when the CFPB has repeatedly questioned the accuracy of credit reports and has a director who isn’t shy about highlighting examples of what he perceives as inappropriate conduct against consumers.

New York State to Hold Series of Cybersecurity Symposia

Last, but not least, New York State’s Department of Financial Services announced that it will be hosting a series of cybersecurity symposia to mark the five year anniversary of New York’s Cybersecurity regulations.  Happy Anniversary!  Something tells me this is more than an academic exercise.  The DFS is examining ways in which it may update these regulations and these virtual discussions could provide an early indication of where it is headed.  The first symposium is scheduled to take place March 29, 2022.

March 21, 2022 at 8:25 am Leave a comment

How Sensitive Is Your Credit Union to Market Risk?

Yesterday the NCUA released a letter to credit unions providing more detail on what they can expect once the NCUA starts assessing “Sensitivity to Market Risk” as a separate category of examiner evaluations. To put it another way, starting in April, NCUA’s CAMEL is getting an “S”. This change applies to both federal and state chartered credit unions.

The material provided by the NCUA is intended to further clarify what impact, if any, this new change will have on your credit union operations.

 The good news is that, in an accompanying Q&A, the Board explains that “Implementing the “S” component will not create a burden or significant disruption to credit unions, examiners, or the examination process.” After all, NCUA has always evaluated a credit unions sensitivity to market place risks, it just never felt the need to join the other financial regulators in breaking it out as a separate category. In addition, at the same time it is breaking out market sensitivity, it is narrowing the parameters of its CAMEL Liquidity analysis.  This is a potentially positive development.  On paper this makes sense since Liquidity, which measures how much money a credit union has on hand to meet its member’s obligations, is different than measuring how sensitive a credit union’s products and investments are to sudden changes in the marketplace.

One potentially troubling aspect of this expanded framework is that the regulation does not formally define Market Risk, leaving open the possibility that Market Risk will be in the eye of the examiner. Consequently, you would be well advised to keep a copy of this letter in your files if only to explain to future examiners that:

The new Sensitivity to Market Risk component rating reflects the exposure of a credit union’s current and prospective earnings and economic capital arising from changes in market prices and interest rates. The Liquidity Risk component rating reflects a credit union’s ability to monitor and manage liquidity risk and the adequacy of liquidity levels.”

One final note. To its credit, NCUA has historically made a distinction between the level of interest rate risk posed by the balance sheets of the smallest credit unions and those over $50M in assets. This distinction is likely to remain. As explained in the Q&A:

Credit unions with relatively noncomplex balance sheet composition and activities and whose senior managers are actively involved in the daily operations may be able to rely on fairly basic and less formal risk management systems. If the risk exposure is low to moderate, procedures for managing and controlling market risks are adequate, and risk profiles are communicated clearly and well understood by all relevant parties, then basic processes may be sufficient to receive a favorable rating for the “S” component.”

So why is yours truly somewhat ambivalent about these changes?  Until now, NCUA has not felt the need to evaluate marketplace sensitivity as a separate category, even though it has been in place for banks since 1997.  NCUA concluded at the time that credit union balance sheets were not as sophisticated as other types of banking institutions.  In the intervening years, some credit unions have grown in sophistication and for the largest credit unions this change makes sense, but my concern is that this new category will result in increased confusion for both examiners and the vast majority of credit unions which have functioned just fine under the existing CAMEL system.  Very few credit unions fail because of marketplace upheaval.  If the system isn’t broke, why fix it?

March 9, 2022 at 9:37 am Leave a comment

Why Mandatory Vacation Time Makes No Sense

I’m back from D.C and firmly focused on the great state of New York. March 7th was the deadline for submitting letters to New York’s Department of Financial Services regarding changing the State’s existing guidance mandating fourteen continuous days of time off for employees holding “sensitive” positions. The 1996 guidance, which applies to all state regulated financial institutions, is not only an antiquated vestige of a bygone era, but it burdens financial institutions of all shapes and sizes while placing regulatory emphasis on the wrong issues. 

As I’ve pointed out in a previous blog, making key employees take a two-week vacation made sense when it took almost two weeks to negotiate checks, but makes no sense when money is transferred with a single click. Instead of emphasizing vacations, the emphasis should be on the internal protocols an institution has in place to prevent, detect, and mitigate insider abuse. For smaller institutions with basic products, this might be as simple as ensuring that one person doesn’t control the keys to the castle; for larger institutions, sophisticated technology with dedicated staff might be an entirely appropriate expectation. 

This is the approach taken by the NCUA. Chapter 4, page 6 of the Agency’s Examination Guide lays out several potential approaches for boards to prevent mismanagement of credit union resources and only encourages mandatory vacation time where such a policy is “practical” for a given credit union.  For example, this criterion makes more sense to me than New York’s existing guidance: “…an appropriate level of management should approve and authorize all transactions over a specified limit, and authorization should require dual signatures…”

Given the lack of complaints I have heard from federal credit unions over the years, it is clear that NCUA does not place anywhere near as much emphasis on vacation time as does New York. Unless there’s evidence that New York State charted credit unions are less susceptible to insider abuse then their federal counterparts, it’s time for DFS to take a more flexible approach. 

March 8, 2022 at 9:17 am Leave a comment

If You’re Hit By A Cyber Attack, Which Regulators Are You Going To Call and When?

The world truly is flat. Russian troops march into the Ukraine and your credit union could be victimized by a cyberattack. This point was driven home by NCUA which has festooned the home page of it’s website with a red banner informing the industry that current geographical events increased the likelihood of imminent cyberattacks.

NCUA is not exaggerating.  We could be on the verge of the first wide scale international cyberwar, in which all financial institutions, irrespective of their size, could find themselves targets of sophisticated cyberattacks.

From a legal and compliance standpoint, an increasingly important question to consider is precisely who your credit union is going to contact in the event it finds itself subject to a cyberattack, and how quickly the information is going to be provided. In the context of Ukraine, the information provided by the NCUA clearly lays out that it expects you to promptly contact both the Agency and law enforcement.

But more generally, the question of precisely who to notify in the event of your more typical cyberattack is one of the key issues over which you should consult with legal counsel.  While many financial institutions have given consideration to when their members need to be contacted, an equally important and related question is when to contact regulators and other government officials.  The standard is evolving.  There are now fifty different state data breech notification requirements in effect, each of which has slightly different notification requirements. For example, New York State’s data breach notification law exempts federally chartered financial institutions complying with GLB from most, but not all reporting requirements. It still expects institutions to contact key state offices, including the Attorney General. Furthermore, state chartered credit unions are subject to the data notification requirements included within the Part 500 cyber security regulations. DFS has put regulated institutions on notice that it expects the 72 hour notification of data breach requirements to be followed.

Once you have assured compliance with state law, all federally insured credit unions are subject to GLB’s requirements as codified in Part 748 of NCUA’s regulations. As explained by NCUA in this article:

 “Appendix B to Part 748 of NCUA’s Rules and Regulations also states that a credit union’s response program should contain procedures for notifying the appropriate NCUA regional director. A federally insured, state-chartered credit union should also have procedures to notify their state supervisory authority as well. Notification should occur as soon as possible after the credit union becomes aware of an incident involving unauthorized access to or use of sensitive member information.”

Interestingly – at least for those of us who have decided to make a living through compliance – Part 748 does not impose a specific timeline for reporting data breaches to a regional director or members. In contrast, the OCC, FDIC, and the Federal Reserve recently issued a joint rule requiring banks to notify their primary federal regulator of any “computer-security incident” that rises to the level of a “notification incident,” as soon as possible and no later than 36 hours after the banking organization determines that a notification incident has occurred.(Computer-Security Incident Notification Requirements for Banking Organizations and Their Bank Service Providers, 86 FR 66424-01).

This new regulation does not apply to credit unions.  This means that federally chartered credit unions in New York still have discretion in determining who to contact and when in the event of a cyberattack.  But the events in Ukraine have underscored that cybersecurity policy and procedures have national implications.  My guess is that you will see a stronger push for national reporting standards to which regulators will expect strict adherence. 

On that note, I’m looking forward to seeing many of you in DC.  Remember to join us for networking on Sunday evening, if you can.  Time to go snow blow.

February 25, 2022 at 9:28 am Leave a comment

Is Mobile Betting Worth The Risk?

In the week before the first round of the NFL playoffs, New York regulators finalized the regulatory framework authorizing selected companies to start offering mobile betting to New Yorkers following passage of legislation this past April [Part Y of S2509-C].  The timing was not a coincidence and it underscores that when it comes to legalized betting, there is inevitable tension between state legislators rushing to capitalize on this potential source of fiscal wealth and increasingly outdated federal laws and regulations which continue to place severe restrictions on the conditions under which betting services can be provided. 

Not surprisingly, lawyers and chief risk officers have been caught in the middle as they try to balance a desire to accommodate throngs of members anxious to lose their money on “can’t miss” bets, while keeping their credit union in compliance.  Judging by the number of phone calls the Association has fielded on this issue, this is an issue keeping compliance people up at night.  I think it’s worth taking a deep dive. 

In today’s blog, I’m going to provide a primer on the broader legal context in which New York is now providing mobile gambling because understanding this context is crucial as credit unions consider how to respond to members who want to use credit and debit cards to quickly open their betting accounts. 

With the usual caveat that what follows is simply one man’s analysis and not a legal opinion that should replace a call to your own counsel, let me first get to the punchline; provided proper procedures are followed, your credit union can, if it chooses to, legally provide credit and debit card access for mobile betters in New York.  However, doing so is not without enhanced compliance risk.  Therefore, your credit union’s compliance team should clearly understand the law and its nuances before deciding to enhance member options.  Given the explosion of mobile banking, it would be nice to see regulators come out with official guidance on some of the nuanced banking issues it triggers in the not too distant future.   

First There Were the Dinosaurs…

It wasn’t too long ago that betting was considered a national vice best contained to Sin City and New Jersey.  Federal law has long reflected this bias.  For example, the Federal Wire Act in 18 U.S.C. § 1084(a) makes it a crime to use “wires” to facilitate illegal betting activity, unless it is legal in both states.  When this law was originally passed, it was designed to capture your friendly neighborhood bookie who took bets from your Uncle Joe over the phone, but has since been applied to the internet.  In 2019 the Department of Justice underscored just how important this statute continues to be when it held that states could not facilitate lotteries through the use of computer servers located in states where betting is illegal. 

The Professional and Amateur Sports Protection Act (PASPA) [28 U.S. Code § 3702 et. seq.] made it illegal for states to authorize sports betting within their boundaries, giving the federal government exclusive decision making power on which states could legally offer sports books. 

With the growth of the internet, enterprising individuals tried to get around these prohibitions by setting up gambling operations in other countries.  They argued that bets made in the U.S. were legal because the betting operations placed the bets in a foreign jurisdiction.  In 2006, Congress responded to this trend by passing the Unlawful Internet Gambling Enforcement Act (UIGEA).  This is the legislation which continues to have the most direct impact on compliance for financial institutions.  It mandates that credit card issuers block unlawful gambling activity over the internet. Its accompanying regulation is Regulation GG, which I bet is a regulation you haven’t thought about much until recently.  

As of 2018, things were straight forward from a compliance standpoint.  Your credit union had to identify commercial businesses that were engaged in online betting and ensure that it took steps to block the use of debit and credit cards to facilitate betting over the internet since any use of the internet to gamble in New York would be unlawful under any of these laws.  Since betting was illegal under almost all circumstances, your Bank Secrecy Act obligations were also straight forward.  If a credit union thought that the financial transactions of your Uncle Joe’s bookie were suspicious, it had an obligation to file Suspicious Activity Reports and examiners had to be on the lookout for such illegal activity. As NCUA explained in its UIGEA Guidance,

“If any depository institution suspects that a customer is processing illegal transactions, including restricted transactions, through the depository institution’s facilities, the depository institution should file a SAR with the appropriate authorities”.

Then things started to get real complicated real quick.  Most importantly, in Murphy, Governor Of New Jersey, et al. v. National Collegiate Athletic Assn. et al., the Supreme Court ruled that PASPA unconstitutionally prevented states from licensing gambling activity.  States like New York have now rushed to take advantage of this ruling, even as UIGEA and the federal Wire Act remain intact.  In other words, mobile gambling is now legal, but only in states where it has been authorized and completely contained within its borders.  No wonder then that some major credit card issuers have remained hesitant to provide easy access to mobile betting for their consumers. 

Against this backdrop, New York legislators tried to make the gray areas a little less murky.  For example, New York’s statute specifies that:

All mobile sports wagering initiated in this state shall be deemed to take place at the licensed gaming facility where the server or other equipment used by a mobile sports wagering licensee to accept mobile sports wagering is located, regardless of the authorized sports bettor’s physical location within this state”

It tries to entice financial institutions to participate by explicitly specifying that:

“Authorized sports bettors may deposit and withdraw funds to and from their account on a mobile sports wagering operator through electronically recognized payment methods, including but not limited to credit cards and debit cards, or via any other means approved by the commission; provided however, that in the case of credit card payments, each authorized sports bettor’s account per operator shall be limited to a credit card spending amount of two thousand five hundred dollars per year”

In contrast, other states have forbid the use of credit cards.

While this language is helpful, rulings by federal courts in both Florida and California underscore that the determination of where a bet is made, and therefore whether it is legal under federal law, is a fact sensitive determination that will ultimately be made by the courts.

My guess is that the use of credit and debit cards will become commonplace.  It is something your members will expect as part of their membership.  The important point to keep in mind is that a compliance framework based on a holistic understanding of both federal and state law in this area is the best way to devise a proper system of checks and balances for your credit union.

January 27, 2022 at 1:22 pm Leave a comment

NCUA, Gov Hochul Outline Key Spending, Supervisory Priorities

When you combine unprecedented spending by the federal government, huge bonuses for the Wall Street crowd and an economy running at inflationary speed resulting in revenue for local governments, what you end up with is an unprecedented opportunity for New York State to devise a budget which incorporates a $5B surplus.  Yesterday the Governor released her proposed spending priorities that provides the framework for budget negotiations over next year’s spending plan. 

New York’s budget process gives a tremendous amount of power to the Governor because it gives the Executive broad discretion to include legislative programs in the budget, provided they are tied to an expenditure of public funds.  In addition, the Legislature can’t simply ignore the Governor’s proposal.  It must either accept it, get the Governor to agree to amend it or override the Governor’s plan which requires a 2/3 vote of the Legislature.  This last scenario hasn’t happened since the waning days of the Pataki administration. 

We will be going through the budget for the next several days, but one proposal that we already want to highlight would increase the ability of Community Development Financial Institutions to participate in the Excelsior Linked Deposit program.  According to the memo accompanying the proposal, the legislation “amends the state finance law to include CDFIs as eligible borrowers under the Excelsior Linked Deposit program and to allow CDFIs to subsequently make loans to small businesses using funds borrowed.” [pg. 104, Part BB of this  bill]

Needless to say, this could provide one more reason for eligible credit unions to consider becoming CDFI’s.  I will keep you posted.

NCUA Outlines Supervisory Priorities

Yesterday, NCUA issued its annual guidance detailing its supervisory priorities for the coming year.  This is a must-read for anyone reading this blog. 

Credit Risk Management tops the list of concerns this year.  This should surprise no one.  Inflation is at a 40 year high, we can expect a series of interest rate hikes and we still have members struggling as a result of the pandemic economy.  Many of these trends are accentuated in New York State.  On the one hand we have members who can afford to buy houses even as housing prices have increased by as much as 20% in some areas.  On the other hand, New York City has an unemployment rate well above the national average.  If your member is a bartender, waiter or hotel worker, they are still struggling.  Make sure you have reasonable policies in place so you can demonstrate to your examiners the steps you are taking to help struggling members while ensuring that your credit union has the resources to withstand sudden changes to the economy. 

On that note, enjoy your day.  Have fun keeping all those balls in the air.

January 19, 2022 at 9:27 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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