Forbearance Guidance, FOM Update, PCA Reg Relief, and More

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The Consumer Financial Protection Bureau and the Conference of State Bank Supervisors have issued joint guidance to mortgage servicers to assist in complying with CARES Act provisions granting a right to forbearance to consumers impacted by the COVID-19 pandemic.

Servicers of federally backed mortgages must grant up to two consecutive 180-day periods of forbearance to borrowers with pandemic-related hardships. Additional interest, fees, or penalties beyond the amounts scheduled or calculated also should be waived with no negative impact to a borrower’s mortgage contract during the forbearance.

Mortgage servicers could violate the CARES Act or other applicable law and cause consumer harm if they require documentation to prove financial hardship, do not grant properly requested forbearance, or mislead or steer borrowers away from forbearance.

ABA Petitions Supreme Court on NCUA’s FOM Rule
The American Bankers Association (ABA) has filed a reply-brief in the U.S. Supreme Court in response to a previous National Credit Union Administration brief which argues that the highest court should not allow challenges to the NCUA’s field-of-membership (FOM) rule. In its reply-brief, the ABA objects to the NCUA’s “unreasonable interpretations of ‘local community’ and ‘rural district’” within its FOM rule.

The ABA’s goal is to overturn a 2019 ruling by a lower court of appeals that supports the NCUA’s FOM rule. Our colleagues at the Credit Union National Association (CUNA) have informed us the Supreme Court has scheduled a decision on ABA’s petition for June 26 – June 29. We are monitoring the status of this issue and will keep you informed.

For background, take a look at “CUNA, NAFCU, CUNA Mutual Group Stand with NCUA on FOM Rule” — published in CUNA News in late May.

NCUA Letter on COVID-19 PCA Reg Relief
Last month the National Credit Union Administration (NCUA) Board approved additional regulatory relief measures related to the NCUA’s prompt corrective action (PCA) regulations anticipating that some credit unions may experience a temporary reduction in earnings and capital due to their COVID-19 response efforts. The interim final rule provides relief to federally insured credit unions during the COVID-19 pandemic while still maintaining the safety and soundness of the credit union system. NCUA’s Letter to Federally Insured Credit Unions 20-CU-18 (issued June 9) discusses the administrative order approved pursuant to § 702.201 that reduces the amount of earnings retention required for credit unions classified as adequately capitalized. Additionally, the letter discusses credit unions’ authority to submit a streamlined net worth restoration plan (NWRP) if their net worth ratio declined to undercapitalized predominantly due to temporary share growth during the COVID-19 pandemic.

NCUA’s Elder Financial Exploitation and COVID-19 Related Scams Webinar
Credit unions and their members are invited to join an update on the impact of elder financial exploitation and other COVID-19 related scams on an archived webinar from June 11, hosted by the NCUA — “Consumer Financial Protection Issues Impacting Older Adults.” (Please input your information and the webinar will upload immediately)

The webinar was hosted by representatives from NCUA’s Office of Consumer Financial Protection, the Consumer Financial Protection Bureau’s (CFPB) Office of Financial Protection for Older Americans, and the Security Exchange Commission’s (SEC) Office of Investor Education and Advocacy. It provides an update on how consumer financial protection issues are impacting older adults; new information on COVID-19-related scams; and other fraud prevention strategies and resources.

NCUA Partnership with EXIM Bank to Help CUs
The NCUA and the U.S. Export-Import Bank (EXIM) have launched a three-year collaborative effort to bring small businesses and credit unions together and expand awareness about EXIM programs. NCUA and EXIM signed a memorandum of understanding to undertake a series of initiatives, including webinars and training events, that will help credit unions better understand and make use of EXIM guaranteed loans and resources. NCUA will work with EXIM to develop educational initiatives on export financing opportunities to share with credit unions so they can educate their small business members about available opportunities.

Reminder: MDI Mentoring Grant Application Deadline is June 30
Small, low-income credit unions certified as minority depository institutions have until June 30 to apply for MDI mentoring grants from the NCUA. The agency will make grants up to $25,000 to help small institutions establish mentoring programs with larger, low-income-designated credit unions that can provide expertise and guidance in serving low-income and underserved populations. Interested credit unions should review the agency’s mentoring grants guidelines, and they must have an account with the General Services Administration’s System for Awards Management. Eligible credit unions can apply through the NCUA’s Cyber Grants online portal. Credit unions should submit questions to staff by email to

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