Posts tagged ‘New York Primaries’

The Good The Bad and The Ugly of NYs Legislative Session, part 1

NY’s Legislative Recap, Part 1

On Saturday morning the Assembly gaveled out putting an unofficial end to another New York State legislative session.  With the caveat that the session never really comes to an official end, except for a couple of seconds in January, here is my first look at some of the key developments that will impact your credit union and/or the industry. 

The Political Environment

This was the year of redistricting, which means that an inherently political process becomes even more political.  As a result of a Court of Appeals decision striking down the Congressional and State Senate maps for violating new provisions of the State Constitution, we still don’t know what Congresspersons and State Senators will be running in which districts this November.  Primaries for these seats are now scheduled for August 23rd.  In contrast, we were recently chatting about legislation with an Assemblywoman who was preparing to campaign later that day for her June 28th primary.  Assembly districts were not thrown out.  All this took place as Governor Hochul navigated her first session since taking over for former Governor Cuomo.  She is seeking a full term in November.  Against this backdrop, here are some of the key legislative developments.  Part 2 will be tomorrow.

More Progress on Public Deposits

Municipal Deposits – S670 Sanders

For the first time in decades, a bill which would authorize municipalities to place their deposits in credit unions passed the Senate.  While we will have to get the Senate to repass the bill next year, and get the Assembly to go along, this is more evidence that things are trending in the right direction.  Over the last few years we have passed legislation permitting credit unions to accept public funds as part of their participation in Banking Development Districts and receive subsidies for certain types of small business loans under the Excelsior Linked Deposit program.  Incidentally, all these votes mean that we have a record of who’s with us and who’s against us.

Mortgage Foreclosure and Defense

The legislature continues to aggressively examine New York’s mortgage lending process.  For my money, the most problematic bill that passed this year was S5473-D Sanders / A7737-B Weinstein.  Although the bill is being sold as a means of preventing putative abuses in New York’s foreclosure process, in reality it would create a hyper-technical foreclosure process that will retroactively allow hundreds, if not thousands, of people to gain clear title to houses they cannot afford.  New York already has the longest foreclosure process in the country and this bill would simply make things worse.

If this bill becomes law, credit unions with delinquent mortgage loans may have to dramatically increase their loan loss provisions. The bill has not yet been sent to the Governor and we continue to join with other industry stakeholders in opposing this bill.

As for some good news, the legislature did not pass bill S2143A Kavanagh / A2428A Dinowitz, which would create a private right of action, replete with treble damages, against mortgage servicers who commit even technical violations of Part 419, which is New York’s mortgage servicer regulation.  This bill raises a host of technical and policy issues which we will continue to address in the months ahead. 

State Level Antitrust Legislation

As I discussed in this post, the Legislature seriously considered a measure  S933-A Gianaris / A1812-A Dinowitz which would impose a state level European style antitrust framework.  The new framework would impact all businesses including credit unions.  Among the concerns we have about the bill is that it would make credit unions vulnerable to class action lawsuits for providing services in underserved areas and make any type of merger more expensive and time consuming by duplicating federal law.  This bill passed the Senate but fortunately never gained traction in the Assembly. 

Stay tuned.  My recap will continue tomorrow.

June 8, 2022 at 10:08 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

Regulators Release a “Must Read” Guidance for CUs

Agencies Issue Joint Examination Guidance

The NCUA yesterday joined with its state and federal counterparts to issue guidance describing examiner expectations during the pandemic.  Needless to say, this is required reading for someone at your credit union today.

What caught my attention most about the wide-ranging explanation of supervisory expectations was the emphasis it placed on institutions engaging in ongoing risk assessments related to the pandemic. For example, the examiners explain that they:

… will review the steps management has taken to assess and implement effective controls for new and modified operational processes. Examiners will assess actions management has taken to adapt fraud and cyber-security controls to manage heightened risks related to the adjusted operating environment. Examiners will also review how management has assessed institutions’ third parties’ controls and service delivery performance capabilities post crisis.”

I know how difficult it is for many of you scrambling around to meet the credit union’s needs on a day-to-day basis to find the time to look at the big picture, but at its most basic level this requirement demonstrates why it’s so important to take a deep breath, sit the team down and memorialize those new policies and procedures you have put in place so that examiners can see how your credit union responded to the pandemic.

AG Reaches $17M Settlement With Mortgage Servicers

New York’s AG announced that she has reached a $17 million settlement with Texas based mortgage loan servicer Caliber which she alleged had engaged in unfair and deceptive practices and violated New York Servicing Regulation Part 419 by, among other things, inadequately explaining to delinquent homeowners the consequences of interest only loan modifications and providing inadequate contact information.  The interesting thing about the settlement findings is that it was based entirely on violations of New York law.

New York Primary Results

Some much anticipated New York State Congressional primaries are too close to call, but it does look like we are on the verge of once again seeing some longtime incumbents losing out to a younger, more liberal, candidate.

 

June 24, 2020 at 8:41 am Leave a comment

Seven Things You Need To Know To Start Your CU Day

Today’s blog is tailor-made for those of you with ADHD.  There’s lot of information I want to get to you on a broad range of topics.

Governor Signs Mortgage Forbearance Bill – Governor Cuomo has signed into law legislation I have been telling you about regulating mortgage forbearances for homeowners impacted by COVID-19.  Here’s where it gets a little confusing.  You should read S.8243C in conjunction with PART C of A.10530 which amends S.8243C.  This is what New York State calls a Chapter Amendment.    I would certainly take a close look at these new requirements which are effective immediately.

Governor Declares Juneteenth A State Holiday—Governor Cuomo issued an EO recognizing Juneteenth as a holiday for state employees tomorrow.  June 19th marks the day in 1865 when Federal troops informed African American slaves in Texas that slavery had ended more than a year earlier following the end of the Civil War.

Meet The New Boss—On Monday the Trump Administration announced that it intends to nominate Kyle Hauptman, of Maine, to be a Member of the National Credit Union Administration Board.  He will replace current holdover board member J. Mark McWatters whose previous term expired August 2019.  If confirmed, Hauptman would serve through at least August 2025. Hauptman is currently an economic policy advisor to Senator Tom Cotton (R-Arkansas).

Don’t Forget The Money—Board Member McWatters used a gracious goodbye statement to the industry, to remind credit unions that they still have some money coming their way from the conserved credit unions as outlined on NCUAs website available here.

DFS Issues Guidance On Credit Reporting And Credit Reporting Agencies—As the sugar rush from the PPP loans and the stimulus checks begin to wear off, you can expect more and more issues to arise about your members credit.  Yesterday the New York State Department of Financial Services issued a guidance on credit reporting which is based on a set of principles the department negotiated with the CRAs.  It also will have some impact on what banks and credit unions report when acting as furnishers of credit information.

This Is One Wacky Economy; Retail Sales Surge—Any expert who tells you they know what to expect from the economy should bring you as much comfort as the weatherman confidently predicting what the weather will be like seven days from now.  Yesterday, retail sales bounced back with a vengeance.  Does this mean that a V-shaped recovery is once again possible? Or simply that people are anxious to get out of the house, anxious to spend some of that free money from the Federal Government knowing that the hard times are right around the corner?  The answers to these questions will of course have a profound impact on the financial health of credit unions large and small in the coming months.  Right now unfortunately, the economy is analogous to a 5,000 piece jigsaw puzzle with all the pieces spread across the table.

New York Primaries Worth Watching—With the state seemingly turning bluer by the day, and national pundits seeking to figure out how much staying power AOC has, here is a great piece of analysis from long time Albany hand Bruce N. Gyory handicapping the upcoming primaries in New York’s 16th Congressional District where longtime Congressman Eliot Engel is facing the proverbial spirited challenge from political unknown Jamaal Bowman and in the 15th Congressional District where the winner is all but assured of replacing retiring Congressman Jose E. Serrano.

 

June 18, 2020 at 10:04 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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