Posts tagged ‘State of the State’

Key Federal and State Proposals Rolled Out

Well, the holiday season is officially over. Judging by the amount of information I want to give you in today’s blog, it’s clear that our policymakers are hitting the ground running. Remember, this is an election year.

Let’s start with some federal guidance.

The NCUA released its annual list of supervisory priorities. Close your eyes and guess what NCUA has listed on their agenda for this year. You got it. The BSA compliance! Listen, I understand that few statutes are as important to properly implement, but if there is a credit union out there that doesn’t understand the importance of BSA and have a grasp of how to comply with it, that credit union has issues that a regulatory guidance can’t help with. What I am surprised by is that Libor is so far down on the list. If I were making the list, my top priorities would be cybersecurity, business continuity, which should be viewed as opposite sides of the same coin, potential liquidity risks- because the ongoing need of the Fed to prop up overnight lending facilities continues to scare the bejeebies out of me, and our good friend CECL, because I don’t think credit unions should in any way be encouraged to ignore implementation issues before it’s too late.

As painful as this is for me to admit, as between my priorities and NCUA’s, it makes sense to follow NCUA’s list.

Supervisory Guidance Issued

A regulation which has flown under the radar has been one finalized by NCUA in September intended to assist credit union supervisory committee audits by providing a more concise framework and explanation for minimum audit requirements. Yesterday, the NCUA issued a guidance complimenting this regulation, which succinctly explains what these minimum obligations are. Anyone involved with the supervisory committee should take a look. I of course have some opinions about this as well, but I still have much to talk about today, and I’m in too good of a mood to get hate mail.

Governor Unveils Ambitious List of Financial Services Initiatives

I’m going to go out on a limb here and say that the Governor’s 10th list of legislative priorities for this year’s New York session includes the most comprehensive list of priorities that could impact credit union operations since he was first elected. In addition to the issues he addressed in his State of the State, which included a pointed criticism of banks for not providing services in many of the areas that need them most, his book includes several priorities which we will be scrutinizing once they take legislative form. Among the proposals that caught our eye is one dealing with reporting suspected elder abuse; further strengthening of state law banning unfair and deceptive practices; a state-level crackdown on robo-calls; and enhancing the oversight powers of the Department of Financial Services.

In addition to the issues directly dealing with financial service issues, Cuomo once again called for the legalization of the sale of marijuana for recreational use and even wants to create an institute for the study of hemp and marijuana within the SUNY system. I was chatting with a longtime colleague and lobbyist after the presentation, and he pointed out that one of the reasons you may actually see agreement on this measure is the State’s fiscal deficit. The reality is that the state can plug in estimates of projected tax revenue to help fill the gap.

Believe it or not, there’s even more, but I think you have better things to do with your time than engage in a one-sided conversation with yours truly. That being said, as many of you already know, you can always e-mail me or give me a call if you want to follow up with anything I’ve mentioned.

Have a great day.

January 9, 2020 at 9:36 am Leave a comment

Financial Issues Loom as a New Legislative Session Begins

Good morning!

This is actually one of my favorite days of the year. It is a cross between the first day of school and the first day of spring training for Met fans. So many possibilities, so much hope… so much room for disappointment.

The Governor gives his annual State of the State address today, and given the amount of information that has already been leaked about the presentation, it’s fair to say that financial empowerment is going to be a prominent theme in 2020. Most notably, it appears that Governor Cuomo is going to propose funding the state level CDFI fund. To put this in perspective, more than a decade ago, the legislature enacted a legal framework for a state-level fund to aid in community development financial institutions. Significantly, several credit unions in New York State are CDFIs, but the designation is not limited to traditional financial institutions.

Ever since the framework was created, however, the fund has been nothing more than an outline as it has never actually received funding. Frankly, I have never understood why this is the case, since I’ve never met anyone who opposes the idea. Now, it appears that the Governor’s high level of support at the start of the budget season may actually bring about some action, with $25 million being committed to the fund over a five year period. It is a start.

The Governor’s initiative is part of an effort to “increase access to safe, affordable bank accounts and small-dollar loans in underserved low-income communities across the State.”

Again, this is opening day. We won’t know until the press release gets translated into legislative proposals precisely what will be undertaken or its impact on credit unions.

Meet the New Boss

This is always the time of year when committee memberships get shifted around. One change worth noting is the announcement that Assemblyman Thomas Abinanti of the Westchester area will be the new Banks Chair. He replaces Assemblyman Ken Zebrowski, who has sponsored our municipal deposit legislation in the past. We will of course be reaching out to Assemblyman Zebrowski to discuss the Association’s priorities.

…Speaking of new bosses, Central New York Assemblyman Will Barclay has been named the new leader of the Assembly Republican Conference. The position has waned in recent years as the Assembly is comprised of just 42 Republicans, giving the Assembly Democrats the ability to override vetoes without Republican support. Still, the Minority Leader has a high-profile bully pulpit. In addition, Republicans can delay passage of bills by forcing debate on proposed legislation. In the past, the Assemblyman has been a sharp critic of credit unions.

January 8, 2020 at 9:05 am Leave a comment

How Long does it Take to complete an NY Mortgage Foreclosure?

In the Big Apple 2,190 Days. Outside of N.Y.C.  you have a mere 1,740. Actually, that’s the maximum amount of time Fannie Mae and Freddie Mac expect mortgage servicers to complete straightforward  foreclosure actions once a borrower becomes delinquent. If you are servicing a loan in California you have 480 days. What is wrong with this picture?

The reason why I decided to bring this up on this disgustingly cold Northeast morning-I can taste my scotch in front of the fire already- is not only because of the Fannie\Freddie announcement but because of this decision that came out yesterday which does a pretty good job of summarizing one of the key emerging issues in mortgage litigation in New York  and across the country: How to calculate the statute of limitations when deciding if a lender has run out of time to foreclose on property?

In New York for example you have a 6 year statute of limitations to bring a foreclosure action. This seems clear enough until you start figuring out the impact that failed mortgage modifications, improperly filed notices and previously dismissed actions have on the foreclosure clock. There is even a dispute of whether a lender can bring separate actions for each late payment.

If you provide mortgages I would delve into this proverbial legal thicket not because you need to know the answers to this arcana but because you need to know what questions to ask that attorney you are working with. . Let’s hope these issues move quickly in the appellate process so that our Court of Appeals can give some clear-cut statewide guidance on how to count to six.

State-Of-The State on Tuesday

Governor Cuomo announced yesterday that he would deliver a combined State-of –the- State address Budget presentation on Tuesday. The importance of the governor’s budget proposal has only grown over the last decade as he has put more and more  of his key legislative proposals in the so-called Article VII bills  which explain how the governor is proposing to spend budget allocations.  This tactic is one of the main reasons why New York has one of the country’s most powerful executive branches.

Best Weekend of the Year  

If you are a sports fan like your faithful blogger,  then you know why this is one of the best weekends of the year. Every remaining NFL team is in a single elimination game which makes for some great drama; just ask a Bears fan. But wait,  there’s more. The  Islanders play the Rangers tomorrow. The rivalry isn’t quite as good as it used to be but having watched a fair number of these matchups at the Nassau Coliseum I can tell you there are moments when you understand how the Yugoslavian civil war got started. Besides, the Islanders beat the Rangers last night despite only getting one shot on goal in the third period.   As luck would have it, the one shot was a goal.  I don’t think I’ve ever seen that.

January 11, 2019 at 9:32 am 1 comment

Just How Bad Is It For Credit Unions?

Those of us hoping that an analysis of the impact that Dodd-Frank regulations were having on credit unions and community banks would help bolster the case for regulatory overkill were sadly disappointed to read a recent report detailing the impact that Dodd-Frank. While acknowledging the concerns of small bank and credit union representatives, it concluded that it is too soon to definitively say whether smaller financial institutions are facing headwinds because of Dodd-Frank or macro trends unrelated to regulations.  Nevertheless, the GAO was willing to note:

  • The numbers of both full-time and part-time employees generally have decreased since the third quarter of 2010.
  • Noninterest expenses as a percentage of assets are generally the same for credit unions of different sizes and generally have decreased for credit unions of all sizes since the third quarter of 2010.
  • Smaller credit unions tend to have lower earnings as a percentage of assets than larger credit unions, but earnings at credit unions of all sizes generally have increased since the third quarter of 2010.
  • Smaller credit unions tend to have fewer residential mortgage loans on their balance sheets as a percentage of assets than larger credit unions, and most of the smallest credit unions have no residential mortgages at all. However, residential mortgages generally have decreased as a percentage of assets for larger credit unions —those in the third, fourth, and fifth quintiles—but have increased for the smaller credit unions in the second quintile.

In fairness to the GAO, the TRID requirements have just kicked in. My concern is that if policy makers wait for definitive proof of Dodd-Frank’s negative consequences before taking more decisive action, they will be doing the equivalent of an autopsy instead of a medical intervention.

Here is a copy of the report:

China Syndrome

Our Ground Hog Day economy is at it again. It’s Winter which means that it’s time for the economic intelligentsia to be reminded that the economy is not as good as they think it is.  Yesterday came news that U. S. factories ended last year mired in their worst slump since 2009 and that Chin’s stock market is once again tanking…..

As we speak the Governor is giving a preview of his State-of-the State Speech.  It’s worth a listen particularly for those of you who are downstate.

January 5, 2016 at 10:05 am Leave a comment

So much to say, so little space

This morning I am changing my usual format because of the unusual number of time sensitive issues that I want my readers to know about. Each one of the subjects is worthy of its own blog, so I will probably follow up with some of these issues in the coming weeks.

President Obama’s “recess” appointment of former Ohio Attorney General Richard Cordray as the  Director of the Consumer Financial Protection Bureau means that the role the Bureau should play in regulating business practices will be a prominent election-year prop as Democrats and Republicans argue over whether the country is suffering from too much or too little regulation.  His appointment had been blocked by Senate Republicans who argued that the position of director was given too much power in the Dodd-Frank Act, even though the legislation could not have passed without their consent.  His appointment will also warm the hearts of constitutional law professors around the country since it may well result in a lawsuit examining the limits of presidential appointment powers.  The President has the power to make recess appointments when Congress has  adjourned, but the Senate is already arguing that it never officially adjourned over Christmas precisely to avoid this scenario.

New York’s Department of Financial Services has finalized regulations mandating that the subsidiaries of national banks and CUSO’s owned by federally chartered credit unions that engage in mortgage lending activity be licensed by the state.  As explained in a previous post, the Dodd Frank Act overruled Supreme Court precedent which exempted the subsidiaries of nationally chartered institutions from state licensing requirements.  In proposing new regulations last year, New York State officials pointed to CUSO’s as an example of the type of institutions that would be subject to state oversight under the proposal. 

NCUA has published a letter to federally insured credit unions detailing negative economic trends that are occurring in the industry and putting credit unions on notice that examiners will assess how well credit unions are guarding against these potential economic trip wires.  Noticeably absent from the guidance is any suggestion from the NCUA as to what credit unions should do to avoid overexposing themselves to these pitfalls, almost all of which are a reflection of the nation’s continuing economic malaise.  

Gov. Cuomo gave his second State-of- the-State address yesterday.  The Governor emphasized job creating economic development initiatives including a proposal to make the Jacob Javits Convention Center in Manhattan the largest convention center in the country (perhaps CUNA can get an early bird special).  The Governor also wants to amend the state constitution to authorize casino gambling in the state.  He also proposed creating a foreclosure prevention unit within the DFS that will provide counseling services for homeowners and engage in mediation efforts with financial institutions.  The Governor’s heavy emphasis on economic development is, in part, a reflection of his extremely successful first year in office during which he accomplished many of the goals he had laid out during his campaign including a property tax cap, ethics reform and the same sex marriage bill.

January 5, 2012 at 7:41 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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