NAFCU Compliance Blog

Upcoming Compliance Deadlines - Spring 2012

Written by Steve Van Beek

There are a few upcoming deadlines to make sure your credit union is making progress on.  

HMDA Reporting.  The deadline for HMDA submissions is March 1, 2012.  NCUA issued a Regulatory Alert earlier this month - 12-RA-01 - that highlights the reporting deadline.  

ADA & ATMs.  The March 15, 2012 deadline for compliance with the ADA requirements for ATMs is quickly approaching.  Remember, document your process and your communications with your vendors as it could be useful if there are delays and the CU faces a lawsuit.   

The speech output requirements apply to all ATMs and need to be in place by March 15, 2012.  The physical access requirements apply to ATMs that are altered after March 15, 2012.  The physical access requirements also apply to any new ATMs added after March 15, 2012.  Existing ATMs that comply with the 1991 ADA standards for physical access and are not altered would not need to be modified.  Additional information is available in last month's blog post.

Durbin - Unaffiliated Networks.  The requirement for unaffiliated networks goes into place on April 1, 2012.  This requirement means credit unions need to have two unaffiliated networks - such as one PIN network and one signature network - for processing transactions.  Additional information and details on this requirement can be found in our January 30th blog post.   

NLRB Notice.  Credit unions should be posting the National Labor Relations Board (NLRB) Employee Rights poster by April 30, 2012.  A couple past NAFCU blog posts discussed this issue in more detail:  January 4, 2012 and December 2, 2011.  

Deadline Approaching for ATM Compliance with ADA Standards; 12-FCU-01

Written by JiJi Bahhur, Regulatory Compliance Counsel

Just a friendly reminder that the physical access and speech output requirements for ATMs go into effect March 15, 2012.  The speech output requirement applies to all ATMs on March 15, 2012.  The new physical access requirements apply to ATMs that are altered or added after March 15, 2012.  Existing ATMs would not need to be modified to meet the new physical access requirements.     

The technical requirements for both physical access and speech output can be found in the 2010 ADA Standards for Accessible Design.  Of noted importance were the reach requirements for ATMs, which has been changed from 54” to 48”, and also, the requirements for floor space for wheelchair access, which had been altered to provide more clearance room for individuals in wheel chairs.  Additionally, new ATM keypad requirements were added.  Note: Drive-up ATMs are not required to comply with the reach and floor space requirements.  

For compliance with the speech output requirements, ATMs will be required to have speech output enabled so that users may listen to directions via telephone headset or in a similar nature.  Further, the addition of Braille instructions and tactilely discernible keys are required.     

For additional information on ADA-ATM compliance, check out our August 4, 2010 and September 16, 2010 blog posts and NAFCU’s Final Regulation.   

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Steve mentioned yesterday that there had not been a Letter to Federal Credit Unions issued in 2012.  That changed yesterday afternoon when NCUA issued Letter to Federal Credit Unions 12-FCU-01 addressing the Operating Fees for FCUs.  

Ex Parte Communications; Upcoming Webcasts

Written by Steve Van Beek

The CFPB's General Counsel penned a recent blog post discussing the CFPB's Policy on Ex Parte Communications during the rulemaking process.  The CFPB's policy can be found here.

The blog post provides an overview of which discussions and conversations will be subject to this policy - as well as when the policy starts for a particular rulemaking:

"This policy generally requires public disclosure of ex parte presentations made to CFPB staff concerning a pending rulemaking. This way, the general public will have access to the input that CFPB is receiving.......

.......Once the CFPB publishes a proposed rule in the Federal Register or on the CFPB’s website, the ex partepolicy comes into play. The policy also comes into play when the CFPB publishes an interim final rule with a request for comment. During this stage, the primary way CFPB collects public input is through written comments that are posted on the public rulemaking docket.............................

.........................However, during this stage, members of the public may wish to provide oral or written comments directly to CFPB staff regarding the rulemaking, or CFPB staff may wish to obtain information directly from members of the public. The input CFPB receives in this manner is considered ex parte because it is outside of or in addition to the formal comment process. The CFPB’s policy requires that these ex parte presentations be summarized and disclosed on the public docket. In this way, members of the public can be informed of the input CFPB is receiving. This policy recognizes that ex parte communications can be a valuable source of information that can improve the quality of CFPB’s rulemaking. At the same time, the policy recognizes the need for disclosure to promote openness and fairness." 

Keep in mind that this policy comes into play after a rule has been proposed.  The blog post doesn't discuss if it applies to existing proposed rules that the CFPB inherited from other agencies.  For example, the Fed had quite a few Reg Z proposals that it did not finalize before authority transferred to the CFPB.

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NAFCU has two upcoming HR webcasts that might be of interest to your credit union.  First is an August 31st webcast on Managing Leave under the ADA and the FMLA.  The second webcast is an September 21st webcast on Complying with Wage and Hour Laws.  Both webcasts will feature Manesh Rath, a partner at Keller & Heckman. 

We have a combo package available where credit unions can register for both webcasts and save $100 on the bundle.  For NAFCU members, the webcasts are $199 each or $299 for both.       

This and That...

Posted by Anthony Demangone

I'll cover a ton of ground in this one, as my e-mail inbox is overflowing at the moment.  I've include links to a number of interesting articles and blog postings today. Well, hopefully you'll find them to be interesting...

ADA and ATMs. The National Federation of the Blind has sued United Airlines , claiming their electronic kiosks violate two California laws, one of which protects disabled California citizens.  If someone at your credit union does not understand the importance of coming into compliance with the new ADA expectations, just show them the press release from the NFB.

Reg D adjustments.  The Fed has announced its annual adjustment for reserve calculations and deposit reporting for Regulation D. 

Reg E.  The Fed has issued Consumer Affairs Letter CA 10-12, which announces revised inter-agency exam procedures for Regulation E. It is a fantastic resource for Regulation E issues.

Board minutes. Here's a great article that discusses numerous issues regarding board minutes.  (The Metropolitan Corporate Counsel, written by Christopher S. Connell of Stradley, Ronon, Stevens & Young, LLP)  Who should take the notes? What should the minutes contain?  Can and should individual directors take notes?  Pass this along to your board parliamentarian. 

NCUA.  NCUA has released its board meeting schedule for 2011. It may be worthwhile to place these dates on your calendar, as these are the dates when new rules and proposals would be issued from NCUA.  Those rules have a tendency to throw a wrench into the works of an otherwise normal compliance officer workday. 

Social media.  Are attorneys and compliance officers "social media killers?"  Here's a nice discussion of the issue. (Bank Lawyer's Blog.)

Compliance. Here's a nice discussion on the role of compliance within a corporate entity. (The Metropolitan Corporate Counsel, Hubert Klein, Lily Bradow.) 

ATMs and the ADA; NCUA Board Meeting

Posted by Anthony Demangone

Earlier, we wrote about how the Justice Department had issued new ADA regulations that very well may require changes to be made to credit union ATMs.   The rules were set to take effect six months after publication in the Federal Register.  As they were published yesterday, the effective date for the changes regarding existing ATMs looks to be March 15, 2011.   

The changes are hard to navigate.  And here's why.  In short, these final rules adopt and make mandatory accessibility guidelines that were issued, and then amended, back in 2004 and 2005, respectively.  So, you really won't see the nuts and bolts of the changes that affect ATMs in the regulations.  Rather, you'll see that information in the guidelines. With that in mind, here's how you may want to consider tackling this compliance issue:

• Read our original blog post on the issue here.  
• You can access the Federal Register notices here.  But again, there's not a ton of meat in there regarding the required ATM changes.
• Rather, you'll likely want to focus on the guidelines themselves. The new ATM standards are set forth in Section 707 of the guidelines.
• Contact the company that services your ATMs. Ask them what must be done to your ATMs to bring them up to speed.  They may already be in compliance.
• If you can show that upgrading an ATM would constitute an "undue burden," you'll need to meet the requirements.  That term is defined, and it is fairly complicated.  In addition, it may be an uphill battle to show why you aren't able to upgrade your ATMs while every other bank or credit union in the country is required to do so.

NAFCU is preparing a Final Regulation for NAFCU members to detail the changes.

***

Today, NCUA will host its monthly board meeting.  The draft items should be available here by 9 a.m. today.

ATMs and the ADA; Secretary Geithner on Reg Reform

Posted by Sarah Loats

The Justice Department has revised its ADA regulations including its Standards for Accessible Design under the ADA. This rule imposes new standards for ATMs, which are set forth in Section 707 of the guidelines.

Some of the standards include ensuring the same degree of privacy for input and output of information is available to all individuals, speech output capability, and providing adequate clear floor or ground space.

Unless a credit union determines that doing so would result in an "undue burden," it may need to bring existing ATMs into compliance. The text below is an excerpt from the final rule adopting enforceable accessibility standards:

ATMs. The 2010 Standards set out detailed requirements for ATMs, including communication-related requirements to make ATMs usable by individuals who are blind or have low vision. In the NPRM, the Department discussed the application of a safe harbor to the communication-related elements of ATMs. The NPRM explained that the Department considers the communication-related elements of ATMs to be auxiliary aids and services, to which the safe harbor for elements built in compliance with the 1991 standards does not apply.

The Department received several comments regarding this issue. Several commenters representing banks objected to the exclusion of communication-related aspects of ATMs from the safe harbor provision. They explained that the useful life of ATMs--on average 10 years--was longer than the Department noted; thus, without the safe harbor, banks would be forced to retrofit many ATMs in order to comply with the proposed regulation. Such retrofitting, they noted, would be costly to the industry. A few representatives of the disability community commented that communication-related aspects of ATMs should be excluded from the safe harbor.

The Department consistently has taken the position that the communication-related elements of ATMs are auxiliary aids and services, rather than structural elements. See 28 CFR part 36, app. B at 728 (2009). Thus, the safe harbor provision does not apply to these elements. The Department believes that the limitations on the effective communication requirements, which provide that a covered entity does not have to take measures that would result in a fundamental alteration of its program or would cause undue burdens, provide adequate protection to covered entities that operate ATMs.

NAFCU's Regulatory Affairs team is working on a Final Regulation summary of this rule. The final rule is effective 6 months from publication in the Federal Register.

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The Secretary of Treasury Timothy Geithner spoke about Reg Reform on Monday. In his speech, he laid out the core principles that will guide them in the reform going forward:

1. Speed - including speeding up the pace of rule-writing.
2. Full transparency and disclosure.
3. To not layer new rules on top of old ones, but to streamline and simplify.
4. To safeguard freedom of innovation and competition while at the same time preventing abuse and excess risk.
5. Create a more level playing field, domestically and globally.
6. Bring more order and coordination to the regulatory process.

In addition, his comments on consumer protection specifically indicate that they will be looking at simplifying disclosures for credit cards, auto loans, and mortgages. And, in regards to mortgages, he noted that they will be meeting next month with experts in the mortgage industry to discuss how to combine the "two separate and inconsistent federal mortgage disclosure forms." I assume he's talking about the RESPA and TIL disclosures.