Written by Steve Van Beek
Thursday marks the one-year anniversary of the signing of Dodd-Frank Act. Of course, that day, July 21, 2011, also marks the day that current federal regulators - including NCUA - transfer authority of consumer regulations to the CFPB.
Dodd-Frank also provided credit unions some wonderful anniversary gifts (isn't it supposed to the other way around?) A number of provisions of Dodd-Frank become effective on July 21, 2011. Including:
Regulation CC. A change in Regulation CC from $100 to $200 for next-day availability. The Federal Reserve has proposed changes to Reg CC that have not been finalized. This change to $200 becomes effective though the Federal Reserve has not changed the language of Reg CC.
This change requires credit unions to review their policies and make sure they are updated. This present from Dodd-Frank also triggers 229.18(e) of Reg CC which requires credit unions to provide notice of the change to their policy. This notice is required even though the change is beneficial to members.
Reality Check: Why didn't the Fed propose two different rules? Rather than confuse the entire financial industry, the Fed could have easily issued one rule to implement the Dodd-Frank change and a separate rule to propose its other changes to Reg CC.
Exemptions to Reg Z & Reg M. Dodd-Frank also increased the exemptions in Regulation Z and Regulation M from $25,000 to $50,000. These exemptions were also tied to inflation and will increase to $51,800 after January 1, 2012.
Credit Score Information. Section 1100F of Dodd-Frank - which requires credit score information to be disclosed on adverse action and risk-based pricing notices - becomes effective July 21, 2011. The Federal Reserve has issued model forms for credit unions to use and obtain a safe harbor.
If you are looking for a recap of past blog posts on these changes, see our FCRA category.
NAFCU Members: The Regulatory Finals on both the adverse action and risk-based pricing notices are available here.
Outside of the Dodd-Frank requirements, there are other compliance dates impacting credit unions.
Financial Literacy Requirement for Directors. The financial literacy requirement for credit union directors becomes effective July 27, 2011. Anthony did a great post in February which stresses the importance of having a policy in place to document the credit union's efforts.
Remember that this rule applies to new directors going forward as well. Within six months of election, directors will need to have the financial skills expected by NCUA. This means if your election occurs in August - new directors have six months to get up to speed. Your policy should cover these situations as well as how the CU will address situations where a new director comes aboard between elections.
SAFE Act. The initial registration for the SAFE Act ends July 29, 2011. Credit unions need to have their mortgage loan originators registered and ready to go by that date. Only registered MLOs can originate mortgage loans after July 29, 2011. NCUA implemented the SAFE Act requirements in Part 761 of NCUA's Regulations.
Clarifications to the Credit CARD Act. It has been amazing how many pages of regulations came out of the 33-page Credit CARD Act. In March, the Federal Reserve issued "clarifications" to its previous three final rules of Regulation Z. These changes become effective October 1, 2011.
NAFCU webcast: Sarah and I will be doing a webcast on August 10, 2011 discussing these new clarifications and potential changes credit unions will need to make prior to October 1.
Changes to NCUA's Advertising Rules. In May, NCUA finalized a rule to amend its requirements for the display of the "official advertising logo" on advertisements. This blog post from May 20 highlights the changes which become effective January 1, 2012. Importantly, there is no "grandfathering" so existing advertisements are not exempt from these requirements. Any advertisement used after January 1, 2012 would need to comply with these new requirements.