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Financial Services Law Insights and Observations

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  • Maryland commissioner of Financial Regulation issues advisory on lending limits for banks and credit unions

    State Issues

    On April 17, the Maryland commissioner of Financial Regulation issued an advisory to address the legal lending limits for Maryland-chartered commercial banks and credit unions. The advisory provides that banks must follow either the Maryland lending limit or the federal lending limit; not both. Banks that are considering relief from the Maryland lending limit must comply with certain requirements. The commissioner also found that, in order to maintain parity with national banks, exemptions to the federal lending limit would be in the public interest and consistent with 12 U.S.C. § 84. Similarly, the governor authorized the commissioner to suspend certain requirements to allow a credit union to engage in transactions exceeding the total credit union limit provided certain requirements are satisfied.

    State Issues Covid-19 Maryland Bank Compliance Credit Union

  • NCUA announces Covid-19 relief measures for credit unions

    Federal Issues

    On April 17, the NCUA released a letter to federally insured credit unions to address temporary relief available as a result of Covid-19. The letter covers a number of matters discussed at the NCUA board’s open meeting held on April 16, including an interim final rule (IFR) issued on April 13 (covered by InfoBytes here) that permits credit unions to access the NCUA’s Central Liquidity Facility with no waiting period for advances. The letter also provides details on two real estate appraisal rules approved by the Board to provide regulatory relief for credit unions: (i) an IFR “that temporarily defers real estate-related appraisals and evaluations” for up to 120 days; and (ii) a final rule that increases the threshold amount for which a transaction involving real estate requires an appraisal from $250,000 to $400,000. Both the IFR and the final rule take effect upon publication in the Federal Register and expire on December 31. In addition, the board approved a final rule which (i) increases the maximum aggregate amount of loans a credit union can purchase from one lender without a waiver to “the greater of $5 million or 200 percent of a federally insured credit union’s net worth”; (ii) temporarily suspends the limit “on the eligible obligations that a federal credit union may purchase and hold”; and (iii) also suspends “the required timeframes for the occupancy or disposal of properties not being used to conduct business or that have been abandoned.”

    Federal Issues Agency Rule-Making & Guidance NCUA Credit Union Covid-19

  • Wisconsin extends stay at home order

    State Issues

    On April 16, the Wisconsin Department of Health Services extended its order closing all non-essential businesses and ordering residents to stay at home until May 26, 2020. Banks, credit unions, and other depository or lending institutions; licensed financial service providers; insurance services; broker dealers; and investment advisors are not required are considered essential and not required to close.

    State Issues Covid-19 Wisconsin Bank Compliance Credit Union Licensing Insurance Broker-Dealer Investment Adviser

  • NYDFS permits depository institutions to hold remote meetings

    State Issues

    On April 16, the New York State Department of Financial Services announced that it issued an order permitting state-chartered banks, credit unions, mutual savings and loan associations, and mutual savings banks to hold meetings virtually. These include stockholder, shareholder and accountholder meetings. The order also extends the timing requirement for annual stockholder meetings so that meetings may be held within seven months of the institution’s fiscal year end, instead of four months.

    State Issues Covid-19 NYDFS Bank Charter Credit Union Shareholders

  • NCUA approves rule to facilitate credit union access to central liquidity facility

    Federal Issues

    On April 13, the NCUA approved an interim final rule intended to make it easier for credit unions to join the NCUA’s Central Liquidity Facility, a mixed-ownership governing corporation, which can be used as a source of contingency liquidity. The rule now permits credit unions to join the facility as a direct member or through an agency relationship. It also eliminates the waiting period for new members to receive advances and eases collateral requirements.

    Federal Issues Covid-19 NCUA Credit Union

  • Washington regulator issues Covid-19 FAQs to credit unions

    State Issues

    The Washington Department of Financial Institutions, Division of Credit Unions issued two FAQs addressing Covid-19 related issues. In the first, the division clarified that a safety deposit box is considered an essential function, and that credit unions should make every effort to allow members continued access. In the second FAQ, the division explained that the governor of Washington authorized electronic notarial acts, and that credit unions may provide remote notarial services.

    State Issues Washington Credit Union Covid-19 Notary

  • Illinois regulator permits credit unions to offer PPP loans to non-members

    State Issues

    On April 10, the Illinois Department of Financial and Professional Regulation authorized state-chartered credit unions to offer current and future government assistance programs created as a result of the COVID-19 pandemic, including loans made under the Small Business Administration’s Paycheck Protection Program, to members of other Illinois state-chartered credit unions. Credit unions doing so must maintain documents demonstrating that the individual or business seeking assistance is a member of another Illinois state-chartered credit union and that the credit union at which the person is a member is unwilling or unable to provide the applicable government assistance.

    State Issues Covid-19 Illinois Credit Union SBA Bank Charter

  • NCUA increases urgent needs grant funding to $1.4 million

    Federal Issues

    On April 10, the National Credit Union Administration (NCUA) increased funding to nearly $1.4 million for low-income credit union grants to cover costs resulting from Covid-19. As previously covered by InfoBytes, on March 23, the NCUA announced urgent needs grants to low-income designated credit unions, originally committing $800,000 in funding. The NCUA will award grants for up to $10,000 to eligible credit unions. Low-income credit unions must submit grant applications by May 22, and grants will be provided on a “first-come, first-serve basis until the earmarked funds are fully exhausted.” To apply for a grant, visit the CyberGrants portal here.

    Federal Issues NCUA Credit Union Covid-19

  • Wisconsin DFI’s Office of Credit Unions issues resource guide

    State Issues

    On April 9, the Wisconsin DFI’s Office of Credit Unions issued a resource guide to answer questions and enable credit unions to continue to conduct business during the Covid-19 pandemic. Topics addressed include the holding of annual meetings, Bank Secrecy Act compliance, board meetings, call report deadlines, and examination protocols, among others.

    State Issues Covid-19 Wisconsin Credit Union Bank Secrecy Act Examination

  • Connecticut regulator: PPP loans exempted from legal lending limit calculations

    State Issues

    On April 9, the Connecticut Department of Banking issued guidance to state-chartered credit unions clarifying that they do not need to include loans made as part of the Small Business Administration’s Paycheck Protection Program when calculating limits on member business loans because those loans are fully guaranteed by the U.S. government. The guidance also encouraged credit unions to continue working with members and other financial institutions during the Covid-19 outbreak.

    State Issues Covid-19 Connecticut Credit Union SBA

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