#2022-16, June 10, 2022

House to Consider Credit Union Charter Expansion Bill; Banker Contacts with Congress Needed

As we reported in the last Washington Update, the House Financial Services Committee recently approved H.R. 7003, the Expanding Financial Access for Underserved Communities Act on a party-line vote.  This legislation allows credit unions to expand their field of membership and commercial lending authority by claiming those charter enhancements would improve access to financial services in underserved areas.

The House leadership has decided to include H.R. 7003 in a broader economic inclusion bill (H.R. 2543, the Financial Services Racial Equity, Inclusion, and Economic Justice Act) which is scheduled to be considered on the House floor as early as next week.  MBA strongly opposes H.R. 7003 and we joined with 50 state banking trade associations in sending a letter to every member of the House earlier today detailing our concerns.  A copy of our letter is available here.

ACTION NEEDED:

We need all member bankers to call and email their legislators to express your strong opposition to including H.R. 7003 in the economic inclusion bill.  The American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) have sample letters to send to your Representatives.  To access the ABA letter, click here.  To access the ICBA letter, click here.  If you would rather call your Representative’s office, please use the "Find Your Representative” feature on the House website: www.house.gov.  We encourage you to share this bulletin with your staff and directors as well.

FinCEN Seeking Comment on No-Action Letter Plan

The Financial Crimes Enforcement Network (FinCEN) late last week issued an Advanced Notice of Proposed Rulemaking (ANPR) regarding a new process for issuing no-action letters.  The process is part of the agency’s implementation of the Anti-Money Laundering Act of 2020.

According to FinCEN, federal agencies may use no-action letters as a form of enforcement discretion about a specific practice, policy or product that it formalizes in a letter to the entity requesting it; they have been used in the past to facilitate innovation efforts at regulated entities.  Acting Director Him Das also indicated that, “A no-action letter process has the potential to spur innovation and enhance overall effectiveness of the AML/CFT framework and the implementation of financial institutions’ compliance programs.”

The ANPR is seeking input on whether FinCEN should issue no-action letters and, if so, how the process should work.  Specifically, FinCEN asked about the agency’s jurisdiction, changes in circumstances, revocations, denial, confidentiality, and consultation requirements.  Comments are due by August 6.

To read more, click here.

Fed Announces Second CECL Tool for Community Banks will Launch June 16

The Federal Reserve recently announced that on Thursday, June 16 it will launch a second tool to help community banks successfully implement the current expected credit loss (CECL) accounting standard.  The Expected Losses Estimator is a spreadsheet-based tool that uses a financial institution’s loan-level data and management assumptions to assist in calculating CECL allowances.

The Fed previously released the Scaled CECL Allowance for Losses Estimator, or SCALE, tool to help simplify the CECL calculation for community banks.  The central bank is also hosting a webinar to explain the new tool on June 16.

To read more, register for the webinar and access the tool once it is available, click here.

FDIC Hosting Virtual Sessions for New Bank Directors

The FDIC is offering the Guidance for New Directors sessions virtually again this year in conjunction with Directors College Program.  These are small-group sessions for new (or newer) directors that focus on fundamentals of board oversight and the examination process.  The sessions will focus on fundamental board governance issues and are designed for Directors with less than five years’ experience.  In addition to discussing participant questions, the session will cover Directors’ roles and responsibilities, the examination process, and effective strategies to monitor bank performance.

The first session is on June 16 with the second scheduled for October 27.  Both sessions begin at 11:00 AM and will run for 90 minutes.  Links to join the FDIC sessions are below.

June 16, 2022:  11:00 am-12:30 pm
Microsoft Teams meeting
Join on your computer or mobile app
Click here to join the meeting

October 27, 2022:  11:00 am-12:30 pm
Microsoft Teams meeting
Join on your computer or mobile app
Click here to join the meeting