Due to the rapid and unexpected balance sheet growth at credit unions that occurred as a result of the pandemic stimulus payments, the National Credit Union Administration board approved an interim final rule that will allow large credit unions to use asset data from the end of March 2020 to determine if they are subject to stress testing and capital planning. The rule will be in effect during 2021 and 2022.
The Small Business Administration’s Inspector General has issued a report finding that in the first batch of Paycheck Protection Program loans last year, 4,260 borrowers got two PPP loans when they only should have received one. The SBA intends to not forgive those duplicate loans, but to prevent duplication from happening again, the SBA has added controls that are causing delays and a logjam in loan processing this cycle, raising concerns that businesses will be caught without a loan when the program ends on March 31. The House has now passed legislation that would extend the PPP to the end of May.
Credit unions are finding themselves having to explain to thousands of members why it looks like Economic Impact Payments have been received but can’t be accessed. This is because the IRS decided to use March 17th as a release date for the funds and did not send payments using the same-day Automated Clearing House (ACH) system for direct deposits.
The Consumer Financial Protection Bureau’s Consumer Response staff has been reorganized and cut during the past three years—moves that could affect the agency’s handling of consumer complaints that have skyrocketed during the pandemic, the CFPB’s Inspector General said in a report issued last week. The Consumer Response office was moved structurally twice and ended up in the newly created Division of Consumer Education and External Affairs, the IG said, in a report on the management challenges the CFPB faces. “These moves may affect the management of consumer complaints, particularly as the Bureau has redistributed some of Consumer Response’s resources to
The Consumer Financial Protection Bureau announced it plans to change a Trump Administration policy and that it will now take enforcement and supervisory actions as a result of abusive acts or practices. It will no longer follow the policy instituted by former Director Kathy Kraninger that significantly narrowed the definition of “abusive acts or practices” and thus avoided enforcement actions under those terms. The new policy will take effect the day it is published in the Federal Register.
The vote of the Senate Banking Committee on whether to confirm Rohit Chopra to head the Consumer Financial Protection Bureau was tied at 12-12. The tie vote, under current Senate rules, means that the confirmation can move to the Senate floor. Republicans believe that the CFPB will be “anti-business” under Chopra.
The Consumer Financial Protection Bureau is issuing an “interpretative rule” that the Equal Credit Opportunity Act prohibits discrimination based on sexual orientation and/or gender identity. As an “interpretative rule” it will not be open for public comment and will become effective when published in the Federal Register. The CFPB then intends to take enforcement actions if the rule is violated.
In a letter to National Credit Union Administration Chairman Todd Harper, Sen. Pat Toomey, the ranking Republican on the Senate Banking Committee, said that the Modern Examination and Risk Identification Tool (MERIT) should be used for examinations as soon as possible, even if the training for it is done virtually.
National Credit Union Administration board members Rodney Hood and Kyle Hauptman want to make it easier for organizations to start credit unions.
Senate Banking Committee ranking Republican Sen. Pat Toomey of Pennsylvania used the confirmation hearing of Rohit Chopra to raise his concern that the Consumer Financial Protection Bureau is returning to regulation through enforcement.