Regulatory Roundup 

NCUA FINAL RULES
Alternatives to the Use of Credit Ratings
NCUA issued a final rule to implement certain statutory requirements in Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act pertaining to the use of credit ratings to assess creditworthiness. The final rule removes references to credit ratings in NCUA regulations or replaces them with other appropriate standards of creditworthiness as required by the Dodd-Frank Act. This rule is effective June 11, 2013. Supervisory guidance on the credit rating changes will be released, and the NCUA will also have a webinar and conduct other outreach activities before the rules become effective. The final rule can be found here.

Fidelity Bond and Insurance Coverage
The NCUA Board is adopting as a final rule, without change, the interim final rule that the board issued in May 2012 that amended NCUA’s fidelity bond rule. The interim final rule removed references in the fidelity bond rule to NCUA’s former Regulatory Flexibility Program, which granted a RegFlex credit union broader authority to choose the deductible amount of its fidelity bond policy. This rule became effective on Dec. 13. The final rule can be found here.

FinCEN/FEDERAL RESERVE BOARD PROPOSED RULES
Bank Secrecy Act Definitions

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, and the Federal Reserve Board are seeking comments on a proposal to amend the definitions of "funds transfer" and "transmittal of funds" under the regulations implementing the Bank Secrecy Act. The proposed amendments are necessary to maintain the current scope of funds transfers and transmittals subject to the Bank Secrecy Act in light of amendments to the Electronic Fund Transfer Act made by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Comments on the proposed rule are due January 25, 2013. The proposed rule can be found here.

CONSUMER FINANCIAL PROTECTION BUREAU/FEDERAL RESERVE BOARD FINAL RULES
Regulation M and Z

The Federal Reserve Board and the CFPB recently announced increases in the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. These increases are consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act amendments to the Truth in Lending Act and the Consumer Leasing Act to adjust these thresholds annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. Transactions at or below the thresholds are subject to the protections of the regulations. The adjustments to the thresholds reflect the annual percentage increase in the consumer price index as of June 1, 2012, and will take effect on Jan. 1.

Based on the adjustments announced, the protections of the Truth in Lending Act and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $53,000 or less in 2013. However, private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan.

Although the Dodd-Frank Act generally transferred rulemaking authority under the Truth in Lending Act and the Consumer Leasing Act to the CFPB, the Board retains authority to issue rules for certain motor vehicle dealers. Therefore, the agencies are issuing these adjustments jointly.

In addition, the CFPB is separately adjusting the dollar amount that triggers additional protections for certain home mortgages under the Home Ownership and Equity Protection Act of 1994, as required by statute. Consistent with the increase in the consumer price index, the dollar amount of the HOEPA fee trigger will increase to $625 for 2013.

The Regulation M final rule can be found here.
The Regulation Z final rule can be found here.
The HOEPA final rule can be found here.
 


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