Derivatives, MBL Waivers, Troubled Debt Restructuring, Risk Management and CFPB Future Plans Discussed During Joint Webinar

Posted by Marissa Anema Wednesday, February 06, 2013 11:56:00 AM


ALEXANDRIA, Va. – NCUA staffers continue to examine credit union derivatives issues, and a proposed rule on derivatives could be released in the first half of 2013, Chairman Debbie Matz said in a Tuesday Webinar with CFPB Director Richard Cordray.

Matz noted that the agency is considering allowing well-run credit unions with the necessary expertise to use simple derivatives to hedge against interest rate risk (IRR). She said managing IRR is a key concern for the agency and the proposal would be issued "soon."

The agency will also address clarity in MBL waivers, she said. An agency letter that addresses blanket waivers, guarantees, and when a waiver is required for a structured or balloon loan is in the works. NCUA will also release credit ratings and troubled debt restructuring guidance, Matz added. Guidance that clarifies the agency's expectations for enterprise risk management practices will also be released by mid-2013, NCUA Director of Examinations and Insurance Larry Fazio said.

Cordray also previewed some of his agency's future plans. A final version of proposed remittance transfer regulations will be released in February or March, and will become effective 90 days after it is released, he said. The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year, and the final exemption threshold will remain at this level, he added.

The CFPB director said his agency is also considering giving credit unions that hold $2 billion or less in assets, and make more than 500 mortgage loans per year, safe harbor from portions of qualified mortgage/ability-to-repay regulations.

Rules addressing prepaid cards will also be released this year, but how far reaching those will be is still under consideration by the bureau, Cordray said. The CFPB is also developing plain language guides to aid smaller institutions with compliance with the new mortgage final rules.

The NCUA will post an archived version of the Webinar in the next two weeks.


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