Compliance Update: What Becomes Effective in 2020

December 30, 2019 |

(From CUNA News) – The new year marks not only the start of a new decade, but the effective date of several important rules for credit unions. NCUA agreed at its December board meeting to delay implementation of its risk-based capital rule to January 1, 2022.

Effective January 1, the Consumer Financial Protection Bureau (CFPB) officially extends the reporting threshold of 500 open-end lines of credit under the Home Mortgage Disclosure Act to January 1, 2022. The temporary threshold was scheduled to expire January 1, 2020.

NCUA’s revision to its Interpretive Ruling and Policy Statement (IRPS) regarding statutory prohibitions, also known as NCUA’s “second chance” proposal becomes effective January 2.

The changes expand the list of criminal offenses by a prospective credit union employee that do not require approval by the NCUA Board.

Specifically, the IRPS does not require an application for:

  • Certain insufficient funds checks;
  • Small dollar simple theft;
  • False identification;
  • Simple drug possession; and
  • Isolated minor offenses committed by covered persons as young adults.

NCUA program offices will process, review, and act upon credit union-sponsored consent applications and the board will retain authority to decide on individual applications.

The Consumer Financial Protection Bureau (CFPB) and other agencies have also set thresholds for certain regulations in 2020, including:

  • Exemption for loans from special appraisal requirements for higher-priced mortgage loans will increase to $27,200, effective January 1. This is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2019; and
  • The protections of Regulations Z and M in 2020 will generally apply to consumer credit transactions and consumer leases of $58,300 or less in 2020. This does not apply to private education loans and loans secured by real property, which are subject to the Truth In Lending Act regardless of loan amount.

In addition to the CompBlog, CUNA’s Compliance Community contains discussion boards and a number of other resources for credit union compliance professionals around the country. Maine credit unions also can direct compliance-related questions to Ellen Parent, League Regulatory and Legislative Advocacy Coordinator, at eparent@mainecul.org.