CFPB Temporarily Delays Prohibition on Financing of Single Premium Insurance
The Consumer Financial Protection Bureau (CFPB) has issued a proposed rule that would temporarily delay the effective date on the prohibition on creditors financing single premium credit insurance products.
The temporary delay would permit the CFPB to clarify the rules applicability to transactions other than those in which a lump-sum premium is added to the loan amount at closing. Credit unions would benefit from the delay since it would eliminate any disruptions in the provision of credit insurance products to members while interpretive questions to the rule are addressed.
The comment period ends May 25.
Foreign Remittance Transfer Rule Effective 10/28/1013
The CFPB has published an effective date of their Foreign Remittance Transfer Rule which amends regulation E and the official interpretations. The CFPB indicates on their website that they will release a summary of the full final rule “shortly” since there has been numerous modifications and amendments to the rule since the release of the rule and concurrent proposal to amend it on January 20, 2012.
The final amendments to the rule make two significant changes that affect a credit unions liability. First, the disclosure of foreign taxes and fees imposed by a recipient institution has been made optional, if a disclaimer that such fees and taxes may apply is disclosed. Second, when funds are deposited to an incorrect account because of an error in the routing or account number supplied by the sending member, the credit union will have to attempt to recover the funds but would not be accountable for funds that could not be recovered.
As a reminder, a credit union may fit under the safe harbor (which would provide them an exemption from the rules) if they provided fewer than 100 international remittance transfers in the previous calendar year and provide 100 or fewer international remittance transfers in the current calendar year. Credit unions should consider how they will comply with the new requirements to the rule if they do not fit under the safe harbor. The new rule will be effective October 28, 2013.
Calif. DFI Warns CUs About Ads' FOM Language
The California Department of Financial Institutions (DFI) issued a warning about credit unions using certain language about their fields of membership in their advertising.
In the April monthly bulletin, the California DFI issued a statement regarding "Impermissible Advertising by Credit Unions."
"The Department has recently become aware of certain impermissible advertising campaigns by credit unions. The advertisements state that 'everyone can join' or 'all individuals can join' the credit union," DFI said in the bulletin.
"Advertisements that display this message violate the Commissioner's regulation concerning common-bond requirements for field of membership," the bulletin continued.
"Title 10 California Code of Regulations 30.51 provides that members must share a common bond 'beyond obtaining financial services.' Stating that 'everyone can join' or that 'all can join' the credit union incorrectly suggests that the common-bond requirement of 30.51 does not apply.
"Please note this regulation when advertising to increase membership and do not use or display any advertisement that is in violation of Title 10 California Code of Regulations 30.51."
The type of credit union campaigns involved were in-branch signage and Internet/Web pages, Alana Golden, California DFI public information officer, told News Now.
"Three credit unions were sent a letter directly, and the bulletin announcement was sent to all licensees," Golden added.
The California regulator became aware of the issue when a DFI employee saw a window advertisement, which then led to Internet searches, she explained.
Source: CUNA News Now
FinCEN Updates: FinCEN Releases 23rd Issue of SAR Activity Review – Trends, Tips & Issues
The Financial Crimes Enforcement Network (FinCEN) has released the 23rd issue of The SAR Activity Review – Trends, Tips & Issues. It can be viewed at http://www.fincen.gov/news_room/rp/files/sar_tti_23.pdf.
FinCEN Updates: FinCEN Releases 18th Issue of SAR Activity Review – By the Numbers
The Financial Crimes Enforcement Network (FinCEN) has released the 18th Issue of The SAR Activity Review – By the Numbers. It can be viewed at http://www.fincen.gov/news_room/rp/files/btn18/sar_by_numb_18.pdf.
Educating your members about the Credit Union tax exemption
The CU tax exemption has been reaffirmed several times by Congress, including in 1935, 1936, 1937, 1951 and 1998. One of the core reasons for the continued tax exemption is our not-for-profit cooperative structure. Today, nearly 96 million credit union members benefit from lower rates on loans, lower fees on services, and higher returns on deposits. Non-members also benefit because the focus on service by CUs keeps competitive pressure on banks.
CUNA noted the economic benefits from the CU tax exemption far outweigh any funds that would be brought in by imposing a federal income tax on credit unions. With a Joint Committee on Taxation estimate of $.5 billion in unclaimed government revenues in 2012 from the CU tax exemption, CUNA estimates CUs gave $8 billion back to their members in the form of low fees, low rates and other benefits.
In order to assist CUNA with information about the credit union tax exemption and educating our members about our tax exempt status, CUNA recently updated their Tax Advocacy Toolkit. This toolkit is intended to help leagues and especially credit unions communicate directly with credit union members, it features a plethora of resources, including sample articles for credit union newsletters, sample op-eds for submission to local newspapers, statement stuffers, and print advertisements. In addition, the Toolkit includes a wealth of background economic and policy data underpinning the credit union tax exemption, state-level membership data, a radio ad for leagues that wish to use it, and sample state league communication materials.