Week ahead: All eyes on regulators
Congress is back in session, but the focus for credit unions this week will be on the regulatory side.
The Financial Accounting Standards Board was expected to hold a meeting Monday that would delay implementation of the current expected credit loss standard by another year to January 2023.
First adopted in June of 2016, the new standard requires lenders to predict and reserve monies to hedge for lifetime credit losses upon adding a loan to their portfolio. Despite the delay, experts have encouraged credit unions to begin preparing now to comply with CECL.
The National Credit Union Administration is also set to finalize several rules when the board convenes on Thursday for its September open board meeting. Chief among the topics scheduled for discussion is the agency’s highly anticipated rule on payday alternative loan products. NCUA Chairman Rodney Hood recently told Credit Union Journal that he envisions the PAL II product to be a guide to help individuals gain access to financial counseling along with funds at low rates. Still, the PAL journey has been a long one where credit unions have sent NCUA back to continue working on its payday loan alternatives expansion.
The board will also discuss the Share Insurance Fund Quarterly report and rulings on supervisory committee audits and federal credit union bylaws. Credit Union Journal will have full coverage of the meeting on Thursday.
In the wider financial services sphere, the Federal Open Market Committee is gearing up for a two-day meeting and is expected to cut rates by an additional 25 basis points, which is expected to heighten pressure on credit union portfolios.
This week is also the due date (Sept. 18) for comments on the Consumer Financial Protection Bureau’s third-party debt collection plan. In a comment letter to the CFPB, the Credit Union National Association noted its skepticism around the rule, particularly with its interpretation in the future when applied to first-party collectors and its impact on creditors.
Lastly, Senate Appropriations subcommittees are working this week to allocate funds to respective departments and programs before government funding runs out at the end of September. According to the National Association of Federally-Insured Credit Unions, Congress is likely to pass a short-term funding bill to avoid a government shutdown.