The industry press has been abuzz about the passage of S. 2155, and for good reason. The financial regulatory reform bill is the first of its kind to cross the finish line in a long time. And, it did not come easy – it took years of advocating, lobbying, messaging and credit union involvement with federal legislators to discuss what needed to change since the enactment of Dodd-Frank in 2010!
While there was work with Congress to get this legislation to pass, more work continues presently with regulators in implementing the provisions that became law into reality for credit unions. A quick rundown of where things stand on just some of the provisions:
- Credit union parity with banks on loans made for one- to four-unit, non-owner-occupied residences to classify them as real estate loans as opposed to business loans. Effective date? This bill stated on this provision that it is effective immediately upon enactment, and the NCUA board approved a corresponding final rule May 30th. It officially became effective on June 5th.
- Requiring NCUA to publish and hold a hearing on a draft budget. The bill did not contemplate an effective date, but it is anticipated during the next budget process.
- Exemption from escrow requirements under the Truth in Lending Act for certain loans made by an insured depository institution or an insured credit union with less than $10 billion in total consolidated assets. No effective date was outlined in the bill, so it will be addressed in the rulemaking process.
- Exemption from certain Home Mortgage Disclosure Act reporting requirements for institutions originating less than less than 500 closed-end mortgage loans or less than 500 open-end lines of credit in each of the two preceding calendar years. No effective date was outlined, so it will be addressed in the rulemaking process.
- Extending a safe harbor from prosecution for trained financial services employees who report suspected elder financial abuse. No effective date was outlined, but is by nature public law and some rulemaking could be expected.
Various other provisions of the S. 2155 have a delayed effective date or also have no date listed, so much work will need to continue from credit unions, Leagues and CUNA with the regulators as they address rulemaking to implement the provisions. And, there have been some reports of market disruption due to interpreting the new law’s effective dates, so we anticipate these to be worked through quickly.
