Financial regulators, including the NCUA and the CFPB, have issued a final rule attempting to distinguish the difference between rules and guidance, but the future of that rule and several others remained in flux Thursday, after President Biden issued a temporary moratorium on regulations until they can be reviewed by the new administration.
The NCUA is an independent regulatory agency and is not required to comply with Executive Orders, but in the past, the agency has said it tries to follow the “spirit” of such orders.
NCUA officials did not respond to a request for comment about the rule or Biden’s actions Thursday.
In recent months, the NCUA board has approved a flurry of rules, as the chairmanship of Republican Rodney Hood likely comes to an end. For instance, this month the board approved proposed rules dealing with complex credit union, the CAMEL rating system, CUSOs and a final rule dealing with CUSOs.
And after the meeting, the board approved a final rule clarifying that agency guidance does not carry the same force as rules and that enforcement actions may not be taken based on guidance.
However, Biden signed an Executive Order Wednesday stating that, with some exceptions, after Jan. 20, agencies should not send rules to the Federal Register for publication until a department or agency head designated by him reviews and approves the rule. The Executive Order also stated that rules that have been published but have not become effective yet should be delayed for 60 days.
It also remained unclear whether agency heads appointed by Biden will want to go along with rules that recently were released. Democrat Todd Harper, who is likely to become NCUA board chairman, opposed several of the proposals presented by Hood.
At the CFPB, a consumer law task force appointed by then-Director Kathleen Kraninger issued a report containing proposed changes to the financial regulatory regime.
However, Kraninger resigned Wednesday at Biden’s request. Biden has announced his intention to nominate Federal Trade Commission Member Rohit Chopra to head the CFPB. Chopra worked for former CFPB Director Richard Cordray, who pushed a much stricter regulatory framework than Kraninger favors.
Until Chopra can be confirmed, Biden appointed CFPB employee Dave Uejio to run the agency. Uejio worked for both Cordray and Kraninger.
Meanwhile, Biden also rejected an Executive Order issued by Trump that restricted the types of diversity training agencies may conduct.
A Latinx activist charged in September that her speaking engagement at the NCUA was cancelled at the last minute, as the agency enforced the Trump Executive Order. Rosa Clemente was scheduled to hold a session entitled, “Unapologetically Black: Afro-Latinx Culture and Identity” as part of a Hispanic Heritage Month event.
ALEXANDRIA, Va. ― The National Credit Union Administration has issued a final rule revising record preservation requirements for credit unions in the event of a catastrophic act. This rule is codified at 12 CFR 749. “Maintaining vital records is essential to the safety and soundness of any federally insured credit union’s operations and its ability to best serve members,” NCUA Chairman Kyle Hauptman said in a statement. “But NCUA, unlike other regulators, didn’t have a limit on how long records had to be kept. This led to unnecessary cost, hassle and uncertainty. This final rule will ease unnecessary and overly prescriptive preservation requirements, while ensuring that credit unions retain the critical documents needed in instances of disaster” According to the agency, the vital records preservation program rule was first created in 1972 to ensure that federally insured credit unions keep duplicate records that can be used for reconstruction purposes in the event of ...
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