Posts tagged ‘NYC’

Taxi Task Force to NCUA: It’s Time To Get Involved

Hello folks.

On the train back to Albany yesterday during the unofficial National Football Hangover Day, I read this much anticipated report released by the New York City formed task force which recommends solutions to the NYC Taxi Medallion crisis.

The issues surrounding medallion loans have been analyzed so much now that it’s hard to come up with any radical new proposals. To me, the most important impact of the report is that it underscores that NCUA has to get actively involved in working with both NYC and the State Legislature if there is going to be any viable plan created to help drivers holding unaffordable medallion loans. After all, according to the Task Force, NCUA holds approximately $1 billion in Medallion Loans and, if it decides to offload this portfolio en masse, policy makers will lose any ability to play a role in the loan modification process.

As a result the Task Force believes

“… it is imperative that stakeholders work quickly to develop a practical option for medallion owner debt relief. Such relief may involve collaborating with the NCUA with respect to the portfolio of medallion loans it currently owns.”

 

Escrow Litigation Heats Up

I don’t want anyone to tell me that I did not warn them that the days of federally chartered credit unions not having to pay mortgage escrow interest may very well be coming to an end.

As I mentioned in this blog, there is currently litigation, modeled after similar lawsuits in California, alleging that Federally Chartered Banks are no longer exempt from New York’s law requiring mortgage escrow holders to pay interest. Although this litigation does not involve credit unions, the legal logic underpinning the exemption for federally chartered credit unions is virtually identical to that of banks.

On January 30th, lawyers for Bank of America urged a federal court in New York to fast track the appeal of similar litigation in New York. In a letter to the court, the bank noted that a proliferation of cases challenging the escrow exemption “underscore the need” for an expedited appeal.

What does all this mean for you federally charted credit unions that provide mortgages in New York?   While the issue is still being litigated, you should certainly be taking the time to plan for the likelihood of having to pay interest on those mortgage escrows.

February 4, 2020 at 9:56 am 1 comment

Six Things You Need To Know To Start Your Credit Union Week

Good morning, people. Yours truly is in fine spirits even though it’s Monday. For one thing, there’s plenty to write about but more importantly, I’m happy to be a Giants fan this morning. I’d rather be a fan of a team with a losing record than watch my team win a Division only to lose in the firbecause its kicker is better at hitting goal posts than kicking through them.

Important Guidance on Loan Forbearance

With 800,000 federal workers not getting paid, chances are your credit union has received some questions from members finding it difficult to make loan payments. Late last week the Consumer Data Information Association issued guidance to companies that furnish data to consumer reporting agencies about how to properly record forbearances as a result of a consumer’s inability to make payments due to the government shutdown or for other reasons. Remember there are some nuanced reporting requirements that you should keep in mind. The guidance reminds businesses that forbearance is a period of time during loan repayment in which a borrower is permitted temporarily to postpone making regular payments. The loan is not forgiven. This is in contrast to a loan modification in which the terms of the loan are actually changed. If all goes according to plan, later this week I will highlight some court cases in which financial institutions were sued for allegedly misreporting forbearances to the credit reporting agencies.

It’s Official: Cuomo Nominates Linda Lacewell to Head DFS

The New York Law Journal reported on Friday afternoon that Governor Cuomo has formally nominated Linda Lacewell, his current Chief of Staff, to be the third head of the Department of Financial Services which was created in 2011 when the Governor combined New York’s Banking and Insurance Departments.

Lacewell’s background is similar to that of the Department’s first head, Benjamin Lawsky. She is a high-ranking aid to the Governor who also has extensive experience as a federal prosecutor, having been involved with high-profile criminal investigations involving organized crime and Enron Corporation. She replaces Maria Vullo.

Are You Handling Your Stop Payment Requests Properly?

That’s the question you should be asking yourself in the aftermath of the announcement that the CFPB has entered into a consent decree with USAA to settle claims that the bank had inadequate policies and procedures when responding to stop payment requests involving preauthorized transfers.

According to the consent order, “On numerous occasions prior to 2015, USAA failed to enter stop payment orders after account holders notified the Bank of their desire to stop payment on Preauthorized EFTs, including by refusing to enter stop payments or by requiring consumers to contact the merchants initiating the EFTs as a prerequisite to implementing stop payment orders. In some of these instances, USAA failed to enter stop payment orders because consumers requested to stop payments to payday loan lenders.”

This has long been a consumer pet peeve. I remember fielding consumer questions about this when I was working in the Assembly oh so long ago.

New Legislative Session Kicks Off This Week

Speaking of the Assembly, a new era begins in New York State politics this week. On Wednesday the Assembly and Senate will hold their first sessions of the year. The Senate will feature  a new Democratic Majority firmly in control and Andrea Stewart-Cousins officially taking the helm as the first female leader of either Chamber in New York history. The state-of-the State address is later this month.

New York City Is Booming

If you want to make it in New York City, now is a good time to be looking for that dream job. The New York Post is reporting this morning that job growth in the Big Apple is “tremendous” fueled by 7,000 new startups and the headquarters of leading finance, fashion, entertainment and technology employers. How much this benefits the rest of the state remains to be seen.

More on the Progressive, PenFed Merger

Here is an article in this morning’s CU Today in which former Progressive CEO Robert Farmilant and PenFed CEO James Schenck discuss the merger and look back at the rise and fall of the medallion lending industry.

 

January 7, 2019 at 9:12 am Leave a comment

Amazon Comes to NYC: Is Bezos Nuts?

The WSJ is reporting that NYC and Northern Virginia will become the second and third satellite headquarters of Amazon. News this big will clearly have an impact on the financial services industry including credit unions. In addition, Google recently announced a major expansion in the Big Apple. It’s not too early to start speculating about what precisely that impact might be.

To be honest with you, I’m shocked. What surprises me most about Amazon’s decision is that it is willingly setting up shop in what is arguably the most business hostile big city in America. Don’t fool yourself, Wall Street thrives in spite of NYC’s government, not because of it. For instance, the minimum wage in the city will soon be $15, more than double the federal requirement; It imposes numerous restrictions on the hiring process including prohibitions against asking about an individual’s salary history or past criminal conduct and we are already seeing court cases dealing with its lower standard for sexual harassment claims.

Then there is the legislature. Amazon and Google are already grappling with Sacramento’s aggressive laws establishing data privacy standards. Now, they can grapple with New York State as the two coasts vie for the title of the most “progressive” state in the nation.

It is fascinating to me that in the 40’s and 50’s, New York State lost much of its manufacturing base as companies moved south to cheaper locales. In the information age maybe knowledge in the form of a highly educated work force and an enticing place for recent college graduates to live is worth the cost.

How is this going to impact your credit union? For one thing, whether you live in New York or Helena, Montana, I would take a look at New York’s Department of Financial Services’ data security regulations. Right now it just applies to insurance companies, banking institutions, and anyone else who needs a license to operate in this state. But there is going to be a huge incentive on the part of legislators to put their stamp on data privacy standards.

Don’t get me wrong, I’m happy for the state and the increased revenue that both Google and Amazon will generate. But for those of us who argue that the state has for too long imposed too many burdens on too many businesses I can’t help but think that Amazon and Google have just sent the wrong message to the incoming Senate Democratic Majority for which those of us outside of New York City will be paying the bill for years to come.

November 13, 2018 at 8:56 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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