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Home Compliance Regulatory Compliance Weekly Roundup: Sept. 1, 2023

Regulatory Compliance Weekly Roundup: Sept. 1, 2023

Authored By: JT Blau on 9/1/2023

Happy First Day of September! Are you like me and can't believe it's already September? As hard as it is to believe, here we are - let's take a look at some of the highlights of the week in regulatory compliance.


It's been a somewhat quiet month for the agency since there is no NCUA Board meeting in August. We did, however, get some remarks from NCUA Chairman Todd Harper at the NASCUS S3 Summit this past Sunday.

Chairman Harper spoke about the economy, describing recent economic trends as providing "cautious optimism, with an emphasis on the word 'cautious.'" He noted that NCUA is expanding its commercial real estate monitoring efforts due to increased credit risk in that space. He also highlighted the agency's recent letter to credit unions reiterating the importance of liquidity risk management and contingency funding plans.

Chairman Harper also renewed his call for third-party examination authority for the NCUA. Getting the NCUA statutory authority to directly examine or supervise CUSOs and third-party vendors has been a priority for Chairman Harper. Last year legislation was introduced to accomplish this, co-sponsored by Virginia Sen. Mark Warner. The bill did not progress to a vote, however, and has not yet been re-introduced this Congress. While Chairman Harper asserted in his remarks that restoring this authority would save time and money in the long term, credit unions and their trade groups have opposed these efforts in large part due to uncertainty about the cost increases this change would bring. When the NCUA hires additional examiners to conduct these reviews, credit unions ultimately bear the costs in the form of higher operating fees.

Chairman Harper also spoke about artificial intelligence, noting the NCUA's role as a regulator to maximize and deliver on the promise of AI while identifying and mitigating risks of peril. He cautioned credit unions that AI systems can carry biases and must be harnessed in a responsible way. Finally, Chairman Harper touched on Real-Time Payments, calling them "both the present and future of financial services and products." While optimistic about the promise of FedNow and similar services to reduce barriers to financial inclusion, he urged credit unions to prioritize security and to evaluate the liquidity and risk management challenges of instant, irrevocable payments.

You can find Chairman Harper's full remarks here.

One last note on NCUA: Today is the effective date for the NCUA's new cybersecurity incident reporting requirements. You can read more about the new rule here. We'll also be discussing the rule and other topics during our next quarterly compliance virtual roundtable on Sept. 6. (There's still time to register for this free webinar!)


The CFPB announced this week that they have a proposed settlement agreement against several entities offering credit repair services, including Lexington Law and CreditRepair.com. These companies collected illegal advance fees for their services. The CFPB's statement highlights the companies' use of fake real estate and rent-to-own opportunities to bait customers and collect fees from them.

While the settlement was announced as $2.7 billion, the companies in the crossfire have already filed for Chapter 11 bankruptcy protection. As a result, compensation for victims of these practices may have to come from the CFPB's victims relief fund.

One of the aspects of working for credit unions that I've always been the most proud of is their approach to financial education and improving credit. Credit unions know improving credit doesn't happen overnight, and they go about it the right way with their members. Credit unions' commitment to financial education is something we always highlight to our lawmakers and regulators, and actions like this against bad actors help us tell that story.

You can read more about the settlement and the illegal practices of these firms here.


We don't often highlight IRS updates here, but we wrote about one yesterday directly impacting federal credit unions. The IRS recently issued a memo stating that federal credit unions were eligible to claim the Employee Retention Credit for 2021 wages, but not 2020 wages. This is due to the IRS's determination that FCUs are "instrumentalities" of the federal government, which was an exclusion in the CARES Act, the legislation that established these credits.

We encourage any credit unions who may have claimed the credit to continue to work with their auditors, legal counsel, and third-party vendors to properly recognize and account for any revenue they received. You can read more about the development here.

That's all for this week - I hope everyone has a great Labor Day weekend. September is shaping up to be a busy month with Congress back in session. Stay tuned here for the latest updates.

And just a reminder: your League is closed Sept. 4 for the Labor Day Holiday!

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