Written by Steve Van Beek
There has been quite a bit of talk about regulatory burden in the past years and there are no signs of a slowdown in the near future as Dodd-Frank provisions are implemented. In fact, the blog has a Regulatory Burden category.
But what is regulatory burden? Is it simply the weight of new regulations, guidance and best practices piled on top of mountains of existing regulations, guidance and best practices? Or are we talking about unnecessary regulatory burden - such as what the CFPB's Streamlining Initiative and NCUA's Annual Review of their Regulations strive to remove? Is it a combination? Is it in the eye of the beholder?
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I'd like to suggest that regulatory burden exists in many different forms and that one of biggest issues is that credit unions are regulated by numerous regulators, agencies, offices as well as Congress. Each regulator looks at an issue from their point of view without consideration for what burdens are being placed on credit unions by other parties. I like to call this regulatory "tunnel vision."
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In this post, we'll look at a couple of recent issues that cause short-term regulatory burden.
Short-Term Regulatory Burden. A good example of this would be NCUA's recent changes to the Equal Housing Lender Poster for FCUs. NCUA made the change to their poster in 12 C.F.R. 701.31(d)(3) to reflect NCUA's Office of Consumer Protection and their formal announcement indicated the change would become effective immediately. NCUA staff indicated that credit unions would have a reasonable amount of time to update their signs. Ok, that is fair. Would have been nice to have that in writing in the Technical Amendments - but at least it was some flexibility.
The problem? As credit unions contacted NCUA for the updated posters they were told the signs would not be available for at least a month. This begs the question as to why the change was made effective immediately when NCUA wasn't prepared to provide credit unions with the updated posters.
If you are looking for a non-fuzzy version of the Equal Housing Lending Poster, a blog reader passed along this clean PDF that might be useful.
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Bonus: Inside of 12 CFR 701.31 is a citation to Regulation B. Unfortunately, it references 12 CFR 202.2(f) rather than the accurate citations of 12 CFR 1002.2(f). While this seems minor it does cause confusion and unnecessary headaches and really should have been addressed during NCUA's Technical Amendments to Part 701.31.
"§ 701.31 Nondiscrimination requirements.
(a) Definitions. As used in this part, the term:
(1) Application carries the meaning of that term as defined in 12 CFR 202.2(f) (Regulation B), which is as follows:
An oral or written request for an extension of credit that is made in accordance with procedures established by a creditor for the type of credit requested;"
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Hopefully NCUA's Annual Regulatory Review will include a thorough review of their regulations to ensure the citations accurately reflect the CFPB's authority over the consumer regulations.
One can hope, can't he? Have a great weekend!
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