REGular Blog: Harper Signals Additional Reporting Requirement for Large CUs
NCUA Chairman Todd Harper spoke today with the Brookings Institution. As is normally the case, the Chairman's prepared remarks were published on the NCUA's website and can be viewed here.
However, the Chairman participated in some Q&A following the interview, during which he indicated that the NCUA will soon require credit unions with more than $1 billion in assets to report data on both overdraft and NSF fees separately to the NCUA, according to an article from American Banker.
From the article:
"This is going to be different from banks," he noted. "We're gonna require separately reporting of overdraft fees and nonsufficient fund fees, so you'll have greater granularity in order to track."
There are approximately 400 credit unions with more $1 billion in total assets, including 15 here in Virginia.
Chairman Harper did not elaborate on what would be required of credit unions as far as reporting, or how this reporting would take place, but the NCUA is likely to collect the data by amending the call report through the Paperwork Reduction Act. There should be a notice and comment opportunity as part of the process, similar to recent call report modernization. However, amending the call report does not fall under the requirements of the Administrative Procedures Act, so no formal rulemaking would be required to implement such a change.
NSF and overdraft fees have come under fire in recent years with the CFPB's battle against so-called "junk fees." This includes the Bureau's two recent proposed rules to prohibit NSF fees on real-time payments and a cap on overdraft fees. Now it appears the NCUA will be getting involved as well.
During the interview, Chairman Harper also shared his thoughts on whether credit unions should remain exempt from the Community Reinvestment Act (CRA). While acknowledging that credit unions have grown and evolved, he noted that the CRA still doesn't fit with the mission of many of today's credit unions.
"What do you do with a credit union that is focused — as you pointed out earlier — on an employer? Maybe it's the police department or a teachers' credit union like my dad started or the one that my mom belongs to," he noted. "It's a fairly narrow bandwidth when it comes to salaries, and you have to have some flexibility in your application there."
He also noted the importance of strong fair lending supervision in the absence of the CRA but highlighted some of the nuances that may not be shown through surface-level data.
It's critical for credit unions to take note of these comments and others from NCUA Board members, as they often signal what is to come in both rulemaking and examination focus areas. We will be working with NCUA as this reporting program is developed, and remain vigilant against possible CRA legislation at both the state and federal levels.
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