California GDPR Now a Reality
Beginning January 1, 2020, the California Consumer Privacy Act of 2018 (the “Act”) will grant consumers more control and understanding into the content and use of their personal information online, creating one of the most comprehensive privacy measures in the United States.
7 Questions to Ask Your Insurance Carrier at Renewal
Insurers are constantly making changes to their policies for a variety of reasons – maybe there is some vague verbiage that needs to be clarified, perhaps an unexpected, bizarre claim arose that was not what the carrier anticipated the policy covering.
SW&M Comments on NCUA’s Proposal Regarding Federal Credit Union Bylaws
On May 21, 2018, our office responded to the NCUA's request for comments on re-opening the Federal Credit Union Bylaws for revision.
Updates on FinCEN’s Beneficial Ownership Rule’s Implementation Date
The “Beneficial Ownership Rule” (also referred to as the “Rule” herein) issued by the Financial Crime Enforcement Center (“FinCEN”) takes effect on May 11, 2018.
Impact of Successor-in-Interest Rules on Financial Institution Operations
On April 19, 2018, the Consumer Financial Protection Bureau’s (“CFPB’s”) amendments to The Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) regarding “successors-in-interest” to original borrowers will take effect and have an impact on various facets of a financial institution’s operations.
Key Portions of FCC's July 2015 Order Regarding TCPA Stricken Down by D.C. Circuit Court
On March 16, 2018, the D.C. Circuit Court (“the Court”) issued its ruling on ACA International v. FCC, addressing the Telephone Consumer Protection Act (“TCPA”) and the Federal Communication Commission’s (“FCC’s”) July 2015 Declaratory Ruling and Order (the “2015 Order”).
Big Changes Are Underway Regarding Periodic Mortgage Statements for Consumers in Bankruptcy. Is Your Institution Ready?
Nobody really thinks about sending periodic mortgage statements to borrowers in a bankruptcy proceeding or after a discharge order is entered in a bankruptcy case discharging a borrower’s personal liability on her debts. Except perhaps the Consumer Financial Protection Bureau (“CFPB”).
Insurance Coverage for Power of Attorney Transactions
Most financial institutions carry “first party” forgery/alteration coverage which provides some loss protection when one person (“A”) signs the name of another person (“B”) without B’s authority.
SW&M Comments on Emergency Mergers - Chartering and Field of Membership
On September 28, 2017, our office responded to the NCUA's Notice of Proposed Rulemaking Regarding Emergency Mergers. Our comments can be found here. Our comments are provided from the perspective of attorneys representing hundreds of credit unions, both state and federal, nationwide. We are involved in a large proportion of the mergers between credit unions, and the lawyers at our firm have worked on hundreds of mergers involving credit union clients.
Comments to Notice of Rulemaking Action Regarding Bylaw Amendments
SW&M Comments on Voluntary Mergers of Federally Insured Credit Unions
On August 5, 2017, our office responded to the NCUA's Notice of Proposed Rulemaking Regarding the Voluntary Mergers of Federally Insured Credit Unions. Our comments can be found.
Federal Multiple Common Bond Amendments
In the NCUA Field of Membership (FOM) rules, effective on February 6, 2017, multiple common bond federal credit unions (FCUs) were provided with the ability to serve employees of contractors to their Select Employee Groups (SEGs), provided the contractors have a strong dependency relationship with the SEG.
Increase in ATM “Skimmer” Incidents
Several clients have recently contacted our office for assistance in relation to ATM “skimmer” devices that have been placed on their ATMs. These devices allow fraudsters to capture information when a consumer inserts his or her debit card into the ATM . . .
Is Your Financial Institution's Information on a "Scraper Site" Without Your Permission?
We have been alerted that there is a sophisticated website, www.ccbank.us, that aggregates information regarding hundreds of financial institutions.
Considering a Credit Union Merger in California? The California DBO has Changed the Rules (Again)!
As part of the continued restructuring process of mergers, the Department of Business Oversight is now changing processes to be in line with the banking side.
Hands Off Phones While Driving, Effective January 1, 2017
Drivers in California should add a New Year’s resolution to their list to refrain from holding and operating their cell phones while driving. Effective January 1, 2017, a new distracted driving law . . .
Limit Your Holiday Party Risks
As the holiday party season approaches, financial institutions should remain aware of some of the issues that can turn a festive, morale-boosting event into a potential liability. Some states’ liquor liability laws make it possible for a plaintiff to hold social hosts responsible . . .
Wells Fargo Scandal's Effects on Incentive Compensation
The September 8, 2016 CFPB Consent Order with Wells Fargo will have far reaching and long lasting effects on financial institutions of all shapes and sizes.
Passwords and Former Employees
We regularly see issues involving former employees and passwords – routine close out of passwords and access after separation (and regular password change protocol for current employees) is critical, of course.
New Attestation Standard (SSAE 18) coming in 2017
As you know, as a part of vendor due diligence, the Credit Union typically asks for an attestation engagement in the form of an SSAE 16 from the vendor to assess various internal controls and security protocols. Effective May 1, 2017, SSAE 16 will be replaced by the new SSAE 18. While much of the previous SSAE 16 remains intact, SSAE 18 provides clarification to the previous standards and enhances the standards with respect to requests for information for areas of risk within the vendor’s organization.
Waters v. City of Petaluma
Management and HR departments often turn to independent outside investigators when dealing with sensitive or complex personnel investigations. Because the timing, methodologies, and findings of such investigations may be subject to close scrutiny in subsequent litigation, it is appropriate to protect such investigations under the attorney-client privilege to the extent possible.
SW&M Comments on NCUA's Notice of Proposed Rulemaking Regarding the Incentive-Based Compensation Arrangements
Member Unlawful Activity and its Effect on Collateral
There is a longstanding problem with respect to member use of loan proceeds and/or collateral for impermissible purposes.
Interagency Proposed Rule on Incentive Compensation Arrangements
On Thursday, April 21, 2016, the NCUA Board was the first of the federal financial regulators to propose a new rule covering Incentive Compensation Arrangements as required under Dodd Frank. This Proposed Rule goes farther than the 2011 proposal on the same topic, and contains messages for financial institutions of all sizes.
ADA Physical Facility Related Lawsuits Continue
As discussed at our 2016 Legal Update Seminar, two California based law firms (and their regular plaintiffs) make their living filing suits under the federal and state disabilities laws. These are NOT class actions, but rather are “quick strike/quick settlement” type filings—the plaintiffs’ “finders” cruise by business establishments looking for technical ADA violations involving handicapped parking, walkways, ramps, ATMs and night depository boxes.
Is your FinTech Vendor Over Promising and Under Delivering?
Lately, we have encountered an alarming number of situations where vendors have failed to timely deliver essential products, promised certain functionality at signing that was actually not developed and related situations, causing substantial headaches for the affected credit unions.
SW&M Comments on NCUA's Notice of Proposed Rulemaking Regarding the Chartering and Field of Membership Manual
Class Action Witness Subpoena Served on Credit Unions
Many credit unions, particularly in the Pacific Northwest, have recently received a witness subpoena to provide information to a third party administrator (Epiq) as part of a class action settlement. No credit unions (that we know of) are defendants in the lawsuit; rather, it relates to consumer debit card use at BP/ Arco stations in Oregon between 2011 and 2013.
Continued Trends in the Business Judgment Rule
When is a Pay on Death Beneficiary Designation Invalid?
Many of our financial institution clients build long term relationships with their account holders, and that of course is a good thing. However, the death of a long time accountholder, especially where old signature cards/ account records are involved and a divorce has occurred, can lead to some considerable confusion and competing family member claims.
Penalty Assessments for Late Call Report Submissions
Increased attention has recently been paid to timely submissions of the quarterly Call Report by the NCUA. In January 2014, the NCUA issued NCUA Letter to Credit Unions 14‑CU‑03, in which it emphasized that late filings had become a serious problem and reminded credit unions that late filings, beginning in 2014, would subject the late filers to civil money penalties.
SW&M Comments on NCUA's Associational Common Bond Rule
SW&M Comments on the NCUA's Risk Based Capital Rule
On May 28, 2014, our office responded to the NCUA's request for comments concerning its Proposed Rule on Risk Based Capital. Our comments can be found here, or on the NCUA's website here. Our comments are provided from the perspective of attorneys representing more than 350 federal and state chartered credit unions nationwide.
CFPB Leaves Definition of “Finance Charge” Unchanged . . . For Now
As anticipated, the Consumer Financial Protection Bureau (CFPB) recently issued final rules on November 20, 2013 that provide new forms and disclosure requirements applicable to most consumer, closed-end, real estate-secured loans.
Fannie Mae Buyback Demands
Fannie Mae (and other GSEs) have been very aggressive in the last 2 years or so in making demands upon banks, credit unions and other lenders for losses caused by allegedly deficient loan underwriting practices performed by the selling institution.
SW&M Comments on Washington DFI Proposed Rule on Frequency of Board Meetings
On November 27, 2013, our office responded to the WDFI's request for comments concerning the Proposed Rule on Frequency of Board Meetings.
NCUA Issues New Guidance on Exam Report Drafting and the Exam Process
NCUA guidance in Letter to Credit Unions 13-CU-09 shows the need for credit unions to be active in the process of examinations.
Health Care Law Reform Update - Exchange Notice Requirement is Approaching
One of the many health care reform changes directed under the Patient Protection and Affordable Care Act (“PPACA”) is the requirement for employers to provide their employees a notice of the availability of coverage through the federal and state health insurance exchanges, also known as the Health Insurance Marketplace
Recent Alerts Regarding Associational Field of Membership Compliance
NCUA Letter to Federal Credit Unions 13-FCU-03 reminds credit unions about associational FOM rules, and introduces a new era in FOM management by credit union regulators.
Challenging a Regulator's Actions - The ''Arbitrary and Capricious'' Standard
Before challenging a regulatory action, financial institutions should first consider the high legal standard that must be met to succeed.
D.C. District Court Overturns Durbin Amendment Rule’s Debit Interchange Fee Limit
Raza Ali's Consumer Financial Services E-Bulletin for the Business Law Section of the State Bar of California highlights the new District Court ruling regarding interchange fees.
SW&M Comments on NCUA Proposed Rule on Derivatives
On July 29, 2013, our office responded to the NCUA's request for comments concerning the NCUA Proposed Rule on Derivatives.
CFPB Issues ''Ability to Repay'' Final Rule
CFPB recently issued its “ability to repay” final rule under the Dodd-Frank Act . . .
Incentive Compensation Considerations
While the NCUA’s Incentive Compensation Rule under Dodd-Frank has not yet been finalized, other regulations, old and new, make Board-approved incentive compensation policies advisable.
The Business Judgment Rule in California
In recent months, we have written and updated an Emerging Issues article on this subject, literally watching the law develop before our eyes.
What 's Really in a ''Comprehensive'' Director and Officers Insurance Policy?
Financial Institutions insurers routinely market their D&O policies as providing “comprehensive” coverage. Sounds great to us . . . but does “comprehensive” mean it covers everything you would expect?
Merger Related Financial Arrangements – Where Credit Union Compensation and Mergers Intersect
Per NCUA Regulations effective January 1, 2011 (Section 708b.106), “merger related financial arrangements” are now subject to regulatory scrutiny and disclosure.
The Business Judgment Rule in California
In recent months, we have written and updated an Emerging Issues article on this subject, literally watching the law develop before our eyes. This article updates our previous observations in this ever- changing area of the law.
Common Misconceptions About Unclaimed Property
Reporting unclaimed property properly has become an area of greater focus for credit unions in the wake of increased state scrutiny on the topic.
Tax Treatment of Deposits for Foreign Members
Changes to IRS Regulations on tax reporting for nonresident aliens increase filing requirements for credit unions, but also clarify problematic reporting rules.
Reminder – New Labor Poster Requirement Delayed to January 31, 2012
A recently-issued National Labor Relations Board (NLRB) final rule requires most private-sector employers—even those without union employees—to notify employees of their rights under the National Labor Relations Act (NLRA) by posting a form notice by January 31, 2012.
Limits on the Credit Union’s Exposure to Liability
A key goal of any credit union is limiting its exposure to liability and lawsuits.
Increase in Minimum Salary for Computer Software Employee Exemption
Recent amendment to statute increases the minimum rate of pay for exempt computer software employees.
NCUA's Report on “Unresolved” DOR Items - What It Means for Your Credit Union
NCUA Office of Inspector General's report on the NCUA's Document of Resolution follow-up process signals increasing attention to supervisory actions.
California Senate Bill (“SB”) 458 Prohibits Junior Lien Holders Collecting Post-Short Sale Deficiencies
SB 458 expands the protections available to borrowers by applying to all mortgages or deeds of trust, regardless of lien position, on a dwelling of four units or less.
California DFI Assessing Penalties for Late Audit Reports
The California Department of Financial Institutions is assessing penalties of up to $1,000 per day for delays in concluding CPA year-end audits.
Maxed Out Medical Leave: Does Your Policy Require Automatic Termination?
The EEOC has criticized leave policies that provide for automatic termination of disabled employees who request leave beyond the set periods.
Final Debit Interchange Rule Issued by Federal Reserve
The Federal Reserve has issued final rules on debit interchange fees, effective October 1, 2011.
SW&M Comments on NCUA Proposed Rule on Incentive Based Compensation Arrangements
On May 31, 2011, our office responded to the NCUA's request for comments concerning the Interagency Proposed Rule on Incentive Based Compensation Arrangements.
CUNA Mutual’s Condition 9
Your Credit Union’s management team needs to keep Condition 9 of CUNA Mutual’s Bond in mind.
Should Your Credit Union Prepay Its Corporate Bailout Assessment?
NCUA recently announced a proposed plan to permit credit unions to voluntarily prepay their annual assessments for the corporate credit union bailout, which the agency projects to be $2.94 billion for the next two years.
Preventing FMLA Abuse: Why Call-In Policies Are a Good Idea
Written ''call-in'' policies can help control the potential abuse of FMLA leave in a number of ways. Does your credit union have one?
California SB 94 – A Useful Tool to Combat Unscrupulous Loan Modification Providers
Although not directly applicable to credit unions, and not widely publicized, SB 94 should serve as a useful tool in protecting members from unscrupulous players in the cottage “loan modification” industry.
Proposed Debit Interchange Rule’s Effect on Credit Union Relationships with Payment Card Networks
Recent changes proposed by the Board of Governors of the Federal Reserve System (the “Board”) affecting debit interchange fees and routing of debit transactions may potentially impact credit unions’ contractual relationships with payment card networks such as Visa or MasterCard.