The NAFCU Journal July - August 2017 - 42

Education and compliance assistance
NAFCU continued to deliver best-in-class education
and compliance assistance in 2016. Last year saw strong
attendance for our conferences and programs, including
September's Congressional Caucus in Washington,
where attendees heard from and met with lawmakers
about top credit union issues in advance of the
November elections; and the Regulatory Compliance
Seminar, which provided attendees the latest news
about credit union regulation and briefings on what
to anticipate in the future.
In 2016, NAFCU added several new compliance offerings
to its lineup. These included a BSA (Bank Secrecy Act)
Seminar; an online training subscription that covers
the 10 most challenging compliance topics (including
BSA, Home Mortgage Disclosure Act, data security and
more); and a complimentary mortgage symposium
held in conjunction with NAFCU's Annual Conference.

The association also
certified 130 NCCOs -
NAFCU Certified
Compliance Officers -
and saw big increases in
member and non-member
subscriptions for
on-demand webcasts.
In 2016, the regulatory compliance division wrote
more than 140 blog posts and answered thousands of
compliance-related questions from member credit unions.
The regulatory affairs division issued 16 regulatory
alerts on proposed rulemakings. The regulatory and
legislative affairs divisions wrote more than 130 letters
to Congress and regulatory agencies about the issues
that matter most to NAFCU's members.

ANNUAL
REPORT

NAFCU's regulatory compliance
team also published a Military
Lending Act Compliance Guide
to provide members with
analysis of the Department of
Defense's MLA rule, which went
into effect Oct. 3. In addition,
the team created a user-friendly,
interactive workbook for credit
unions using the Federal Financial
Institutions Examination Council's
cybersecurity assessment tool.

nafcu.org/education | nafcu.org/compliance

News and information

NAFCU's
Military Lending Act
Guide
An exclusive, member-only publication

National Association
of Federal Credit Unions

NAFCU | Your Direct Connection to Advocacy, Education & Compliance

National Association
of Federal Credit Unions

NAFCU | Your Direct Connection to Advocacy, Education & Compliance

National Association
of Federal Credit Unions

NAFCU | Your Direct Connection to Advocacy, Education & Compliance

Also in 2016, NAFCU launched a revised Board of
Directors Online Training Subscription that now contains
11 all-new modules and exams board members can
complete to become NAFCU Certified Volunteer Experts.

Throughout 2016, NAFCU
publications kept members
(and nonmembers) apprised
of advocacy developments
and other news important
to federally-insured credit
unions. Among these were
the NAFCU Today
enewsletter (and Breaking
News), The Federal Credit
Union magazine, UPDATE,
Compliance Monitor, Economic
and CU Monitor and more.

March 2017

Worth Noting ........................................................................................................................................................... 1

NCUA Supervisory Priorities for 2017 and Risk-Based Examination Scheduling Policy ....................................... 1
The Americans with Disabilities Act - Potential Risks for Credit Union Websites ............................................... 8

News Snippets ........................................................................................................................................................ 12
Compliance Forum ................................................................................................................................................ 14

NAFCU Education ................................................................................................................................................. 16

Industry & Economic Briefing

By Curt Long, Chief Economist / Director of Research

Worth Noting

Industry Conditions: The credit union industry ended
2016 with a flourish, as estimated member growth
topped 4 percent and loan growth exceeded 10
percent. Share growth moderated somewhat in the
quarter,
but ended
the year at over 7 percent.
MLA Database Processing Issue. On February 16, 2017, the Defense Manpowerfourth
Database
Center
(DMDC)
reported that the Military Lending Act (MLA) database experienced "a problem" processing
multipleConditions:
record requests
Economic
The Fed resumed normalizing
between February 9, 2017, and February 15, 2017. This prevented 149 requests from processing,
sointhe
DMDC
indicated
if hike of the year.
rates
March
with
its first rate
a credit union's multiple record requests "failed to process," the credit union should "submit the file again for processing."
Through the first two months of the year, job gains are
What the DMDC did not clarify was what impact this would have on a credit union's ability to still claim a safe harbor -
averaging over 200,000 per month. The
especially with the rule's prohibition against historic lookbacks. If your credit union was impacted by one of these 149
rate
has been
requests, it may need to consult with counsel to discuss further. It may be coincidence, butunemployment
a couple of days
before
this stable thanks to strong
in labor
force
participation
over that period.
error occurred, the MLA website was down for system maintenance. While overall it isgains
not clear
what
caused
the
Meanwhile,
inflation
climbing,
largely due to a rise in
processing issue, credit unions that rely on the DMDC database for performing covered borrower
checks
may is
want
to
gas prices. But with the Fed's preferred measure for
monitor the MLA's news page for a heads-up on future maintenance to the site.
price growth approaching its two-percent target, the
policy-setting committee may have to ramp up the
pace of rate hikes this year.

Topic: Housing
NCUA Supervisory Priorities for 2017 andSpecial
Risk-Based
While home values have bounced back from the sharp
that touched off the Great Recession,
Examination Scheduling Policyfall
homeownership rates remain at their lowest in

decades. Homeownership has long been a wealth
building strategy for minority and lower- and middleclass Americans
butwhich
many is
are now experiencing
In January, the National Credit Union Administration (NCUA) released its Supervisory Priorities
for 2017,
difficulty
in joining
the housing
intended to assist credit unions in preparing for this year's examination process. Generally,
it appears
the agency
will market. Younger
particular
continue to scrutinize a credit union's ability to mitigate forward-looking risks, while also homebuyers
ensuring the incredit
unionare
is delaying purchases of
complying with newly implemented regulations. Also, this past fall, NCUA launched an interactive
online
version
of its
first homes.
Credit
unions
continue to support their
Examiner's Guide, which updated several sections of the existing documents. The agency expects
to continue
with mortgage
these
members
in extending
loans, but ease of
updates as the documents can be useful tools in preparing for exams.
access to the secondary mortgage market is crucial to
helping members achieve their dreams of
The agency will also continue to use its streamlined small credit union exam program procedures
for credit unions with
homeownership.
assets up to $50 million and CAMEL ratings of 1, 2 or 3. For all other credit unions, field staff will conduct risk-focused
According
to this
month'sand
Economic & CU Monitor
examinations. NCUA's risk-focused examinations will concentrate on the areas of the highest
risk, new
products
survey, a significant number of credit unions continue
services, and compliance with federal regulations.
to participate in the secondary market through the
government sponsored enterprises (GSEs). More
than half of survey respondents sell mortgage loans to
Fannie Mae (26.3 percent), Freddie Mac (10.5
percent) or both (21.1 percent). Other than the GSEs,
roughly one- third of respondents use CUSOs or
1 respectively, to sell
Federal Home Loan Banks,
mortgages to the secondary market, while 21.4
percent use private placement. On average,
respondents sold 22.5 percent of their mortgage loans
to the GSEs in 2016. Compared with pre-recession
volumes, however, about 22 percent of respondents
reported selling proportionally more mortgage loans to
the GSEs prior to their conservatorship in 2008.
NCUA Supervisory Priorities for 2017

Economic & CU Monitor- March 2017

As Congress continues to debate GSE reform, credit
unions are significantly concerned about the loss of
the secondary market. The vast majority (68.8
percent) of survey respondents are opposed to the
elimination of the GSEs and full privatization of
housing finance without a government guarantee (see
chart). A large majority (62.5 percent) favor
preservation of an explicit government guarantee, with
respondents saying that the housing market benefits
from a government guarantee, particularly to protect
the 30-year mortgage. Credit unions emphasized the
need for an assurance of continued access to a
reliable secondary market in order to serve the needs
of their members, noting that the current system is
working well.
With respect to housing regulation, credit unions
continue to see a need for improvement of the federal
mortgage rules. In particular, survey respondents
would like to see more guidance on construction loans
from CFPB relative to the TILA-RESPA Integrated
Disclosure (TRID) rule. Nearly half of all respondents
also support changes to the Ability-to-Repay and
Qualified Mortgage (ATR/QM) standards.
Opinions on recent regulatory initiatives regarding
chattel loans were mixed. FHFA is currently
considering chattel loan pilot initiatives for the GSEs to
facilitate a secondary market for loans on
manufactured homes titled as personal property, or,
chattel. Nearly half of the respondents have no
objections to Fannie Mae or Freddie Mac pursuing
chattel loan pilot initiatives but the majority (52.9
percent) is still unsure about this prospect.

Page 1

take the survey at: www.nafcu.org/research/participate/

nafcu.org/news | nafcu.org/publications

Left and right: Attendees at NAFCU's Strategic Growth Conference ask questions. Center: Regulatory Compliance Counsel Stephanie Lyon presents at
NAFCU's Risk Management Seminar.
6

42

NAFCU 2016 Annual Report
THE NAFCU JOURNAL JULY-AUGUST 2017


http://www.nafcu.org/education http://www.nafcu.org/compliance http://www.nafcu.org/research/participate/ http://www.nafcu.org/news http://www.nafcu.org/publications

Table of Contents for the Digital Edition of The NAFCU Journal July - August 2017

Our First 50 Years
Events Calendar
From the Chair
Inside NAFCU
The Digital Download
How Secure Is Your Credit Union?
The Bank Secrecy Act
2017 Annual NAFCU Award Winners
2016 NAFCU Annual Report
Getting to Know …
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal July - August 2017 - Cover1
The NAFCU Journal July - August 2017 - Cover2
The NAFCU Journal July - August 2017 - 1
The NAFCU Journal July - August 2017 - Our First 50 Years
The NAFCU Journal July - August 2017 - Events Calendar
The NAFCU Journal July - August 2017 - From the Chair
The NAFCU Journal July - August 2017 - 5
The NAFCU Journal July - August 2017 - Inside NAFCU
The NAFCU Journal July - August 2017 - 7
The NAFCU Journal July - August 2017 - 8
The NAFCU Journal July - August 2017 - 9
The NAFCU Journal July - August 2017 - 10
The NAFCU Journal July - August 2017 - 11
The NAFCU Journal July - August 2017 - 12
The NAFCU Journal July - August 2017 - 13
The NAFCU Journal July - August 2017 - The Digital Download
The NAFCU Journal July - August 2017 - 15
The NAFCU Journal July - August 2017 - How Secure Is Your Credit Union?
The NAFCU Journal July - August 2017 - 17
The NAFCU Journal July - August 2017 - 18
The NAFCU Journal July - August 2017 - 19
The NAFCU Journal July - August 2017 - 20
The NAFCU Journal July - August 2017 - 21
The NAFCU Journal July - August 2017 - The Bank Secrecy Act
The NAFCU Journal July - August 2017 - 23
The NAFCU Journal July - August 2017 - 24
The NAFCU Journal July - August 2017 - 25
The NAFCU Journal July - August 2017 - 26
The NAFCU Journal July - August 2017 - 27
The NAFCU Journal July - August 2017 - 28
The NAFCU Journal July - August 2017 - 29
The NAFCU Journal July - August 2017 - 2017 Annual NAFCU Award Winners
The NAFCU Journal July - August 2017 - 31
The NAFCU Journal July - August 2017 - 32
The NAFCU Journal July - August 2017 - 33
The NAFCU Journal July - August 2017 - 34
The NAFCU Journal July - August 2017 - 35
The NAFCU Journal July - August 2017 - 36
The NAFCU Journal July - August 2017 - 2016 NAFCU Annual Report
The NAFCU Journal July - August 2017 - 38
The NAFCU Journal July - August 2017 - 39
The NAFCU Journal July - August 2017 - 40
The NAFCU Journal July - August 2017 - 41
The NAFCU Journal July - August 2017 - 42
The NAFCU Journal July - August 2017 - 43
The NAFCU Journal July - August 2017 - 44
The NAFCU Journal July - August 2017 - 45
The NAFCU Journal July - August 2017 - 46
The NAFCU Journal July - August 2017 - 47
The NAFCU Journal July - August 2017 - Getting to Know …
The NAFCU Journal July - August 2017 - 49
The NAFCU Journal July - August 2017 - Management Insight
The NAFCU Journal July - August 2017 - 51
The NAFCU Journal July - August 2017 - Compliance Central
The NAFCU Journal July - August 2017 - 53
The NAFCU Journal July - August 2017 - Inside NAFCU Services
The NAFCU Journal July - August 2017 - 55
The NAFCU Journal July - August 2017 - From the President’s Desk
The NAFCU Journal July - August 2017 - Cover3
The NAFCU Journal July - August 2017 - Cover4
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