Roundup Through January 26, 2026

On January 26, 2026January 26, 2026 By Jeremy Newman (NYCUA)In Weekly RoundupsLeave a comment

January has a reputation for being slow. Compliance, apparently, did not get the memo.

This roundup touches on some familiar themes for credit unions heading into 2026: credit cards, interchange pressure, supervisory priorities, and the ever-present possibility of a government shutdown, all unfolding at once.

Here is what’s moving, what’s stalled, and what deserves a closer look as we head toward the end of the month.

Government Shutdown Looms as DHS Funding Stalls

Federal funding expires January 30, 2026, with Senate Democrats threatening to block the spending package over DHS funding disputes following fatal ICE shootings in Minneapolis
The House passed $1.2 trillion spending package on January 22, but Senate opposition creates high shutdown risk

Credit Card Competition Act : Interchange Revenue Remains Under Threat

Talk about Senators Durbin and Marshall introducing their revised Credit Card Competition Act as an amendment to crypto legislation in Senate Agriculture Committee were mitigated Monday afternoon
However, attacks on interchange remain as the White House and various legislators continue to support the Credit Card Competition Act

10% Credit Card Rate Cap Moves from Social Media Post to Proposed Legislation

What began as a social media post by President Trump proposing a one-year 10% APR cap has evolved into serious bipartisan legislation gaining congressional attention
Senate bill S.381 by Sanders (I-VT) and Hawley (R-MO), and House bill H.R.1944 by Ocasio-Cortez (D-NY) and Luna (R-FL) propose five-year 10% caps with enforcement mechanisms
America’s Credit Unions warns that an estimated two-thirds of credit card users carrying a balance would have their credit lines reduced or eliminated and virtually all of the 47 million Americans with a sub-prime credit score would be unable to obtain or keep a credit card

$8 Credit Card Late Fee Cap: From Dead CFPB Rule to Legislative Revival

The Senate introduced the Credit Card Fairness Act to codify $8 late fee cap into federal law after CFPB’s rule was vacated in April 2025
Current Regulation Z safe-harbor amounts remain in effect for now

NCUA Sets 2026 Examination Priorities

The NCUA released its 2026 Supervisory Priorities Letter, emphasizing “No Regulation by Enforcement” while zeroing in on credit unions’ weakest loan performance in over a decade
Examiners will focus on underwriting standards, credit risk management, and liquidity planning
Operational risk remains a priority, with continued emphasis on fraud prevention and payment systems security and BSA makes an appearance after being off the list for a few years

Looking Ahead

The next few days are critical with committee hearings (weather dependent) and the end of the month government shutdown deadline.

Let’s Make This Useful

I want this blog to be as relevant as possible to the people reading it. So:

Got a topic you’d like me to break down?
Burning desire to know more about that headline you read the other day?
Have an industry-related question you want addressed?

Reach out to me at jeremy.newman@nycua.org. Let’s talk.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

When UCC Article 4A Meets Regulation E: Why Credit Unions Are Watching the Citibank Case

On January 12, 2026January 8, 2026 By Jeremy Newman (NYCUA)In Fair LendingLeave a comment

Today, we’re doing something a little different and turning the blog over to someone who brings real insight and experience to the topic. Our guest contributor brings deep expertise on wire transfers, Regulation E, and Article 4A and unpacks why a closely watched federal case in New York could have real implications for credit unions. Please welcome Mitch Pollack, the New York Credit Union Association’s General Counsel and managing member and founder of Mitchell Pollack & Associates.

For decades, credit unions and banks have operated under clear and predictable rules for fund transfers. Consumer electronic fund transfers are governed by Regulation E, while wire transfers fall under UCC Article 4A. That distinction has rarely been questioned—until now.

The New York Attorney General’s lawsuit in New York v. Citibank challenges whether a wire transfer initiated by a consumer, through online or mobile banking, remains an Article 4A transaction, or whether it should instead be treated as a Regulation E electronic fund transfer.

The New York Attorney General’s Theory

The Attorney General alleges that Citibank failed to adequately prevent account takeovers, allowed fraudsters to initiate wire transfers from compromised consumer accounts, and improperly denied reimbursement by asserting that Regulation E did not apply.

The state’s central argument is that when a consumer initiates a wire through online or mobile banking, the transaction qualifies as an “electronic fund transfer” under the Electronic Fund Transfer Act—despite long-standing industry practice and case law treating wire transfers exclusively under Article 4A.

To support this position, the Attorney General advances a “transaction-splitting” theory, dividing a wire transfer into three steps:

The consumer submits payment instructions through online or mobile banking;
The financial institution processes the payment and sends funds through a wire network; and
The recipient’s account is credited

Under this approach, steps one and three are characterized as Regulation E transactions, even if the wire itself remains governed by Article 4A.

Citibank moved to dismiss the Complaint arguing that Regulation E doesn’t apply and UCC Article 4A governs wire transfers. The U.S. District Court for the Southern District of New York declined to dismiss the Regulation E claims at the pleading stage, allowing the theory to proceed. This was not a decision on the merits. The case is now on appeal before the Second Circuit, with final briefing due in January 2026.

Why Credit Unions Should Care

Article 4A was designed to promote certainty, speed, and finality in wire transfers. It allocates risk based on whether the financial institution employed commercially reasonable security procedures and acted in good faith. When those standards are met, courts have historically placed fraud losses on the customer, rather than treating the institution as an insurer.

The Attorney General’s lawsuit seeks to upend that framework by reclassifying consumer-initiated wires as Regulation E transactions. If that position ultimately prevails, the implications for credit unions could be significant:

Article 4A’s loss-allocation rules may no longer apply to consumer wires;
The commercially reasonable security defense may lose its protective value;
Regulation E notice, investigation, and reimbursement requirements could be imposed on wire transfers; and
The long-standing principle of finality in wire payments could be eroded.

In practical terms, this would increase fraud exposure, operational burden, and reimbursement risk for credit unions offering online or mobile wire capabilities.

What Credit Unions Should Do Now

While the Citibank case remains unresolved, credit unions should treat it as a regulatory warning sign and take proactive steps to mitigate potential exposure—particularly for consumer-initiated wire transfers through online or mobile banking.

Review consumer wire disclosures and agreements. Ensure account agreements, wire transfer disclosures, and online banking terms clearly describe how consumer-initiated wires are handled, including governing law, security procedures, and member responsibilities. Ambiguities may be scrutinized if Regulation E arguments gain traction.

Reevaluate wire fraud controls for consumer channels. Assess whether existing wire security procedures—especially those tied to online and mobile banking—remain commercially reasonable in light of evolving fraud tactics. This includes authentication, anomaly detection, callback procedures, and transaction monitoring.

Document good-faith compliance efforts. Maintain clear records showing how wire transfers are reviewed, approved, and processed, and how security controls are evaluated and updated. Demonstrating good-faith adherence to Article 4A standards remains critical.

Train staff on consumer wire risk. Front-line staff should be trained to identify account takeover indicators and social engineering red flags, particularly when members request urgent or unusual wire transfers.

Monitor legal and regulatory developments. A Second Circuit decision could reshape expectations nationwide. Credit unions should stay engaged through Association updates and be prepared to adjust policies quickly if the legal landscape shifts.

The New York Credit Union Association Response

Recognizing the stakes, the Association—along with other industry participants—filed an amicus brief supporting Citibank’s position that Article 4A governs consumer-initiated wire transfers. We will continue to closely monitor the case. A decision from the Second Circuit could come in early 2026 and may have broad implications for wire transfer risk management across the credit union system.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

The New York Credit Union Association’s Year-Long Legislative Battle: Comprehensive Advocacy Efforts Face Final Test

On December 15, 2025December 15, 2025 By Jeremy Newman (NYCUA)In Fair LendingLeave a comment

Throughout the 2025 legislative session, the New York Credit Union Association has conducted a comprehensive advocacy campaign to advance legislation supporting credit union members while protecting the industry from statutory overreach. The Association’s multifaceted efforts now face their ultimate test as Governor Hochul decides the fate of 161 bills awaiting her action.

(And for those faithful readers who don’t have time to read this full post, click here to register for the webinar on January 14th.)

Comprehensive Advocacy Strategy

The Association’s 2025 legislative work encompassed the full range of advocacy activities to serve New York’s credit union community:

Championed member-friendly legislation to expand credit union services and reduce operational burdens
Opposed bills that would impose unnecessary statutory requirements on credit unions
Engaged proactively with bill sponsors to seek amendments and carve-outs protecting credit unions
Testified at committee hearings to educate lawmakers about credit union operations and member benefits
Built coalitions with consumer groups, business organizations, and other financial services stakeholders
Submitted detailed position papers analyzing legislation’s impact on credit union members and operations
Educated members about pending legislation and mobilized grassroots advocacy efforts

Four Bills at The Top of the Opposition List

While the Association’s advocacy agenda included supporting numerous pro-credit union measures, four bills required particularly intensive opposition efforts due to their potential negative impact on credit union operations:

S6953B – The RAISE Act (Artificial Intelligence Regulation)
The Association worked extensively with Senator Gounardes’ office, committee staff, and stakeholder groups to seek appropriate exemptions for financial institutions. Despite the Association’s detailed advocacy explaining how the bill’s training requirements and compliance obligations could disproportionately burden credit unions, the legislation advanced without adequate protections for member-owned cooperatives. Similar legislation has been vetoed across the country and with the talk of federal legislation voiding state AI legislation, the future of RAISE is uncertain. This legislation is pending the Governor’s signature, and the Association (along with many other business groups) is actively advocating for a veto.

S929 – New York HIPA (Health Information Protection)
The Association’s advocacy team engaged intensively with Senator Krueger’s office and stakeholders to push for explicit carve-outs for financial institutions and insurance carriers. The Association’s analysis demonstrated how the broad language could inadvertently capture credit unions processing health-related information, creating duplicative privacy requirements that conflict with existing federal frameworks. The Association has joined a large coalition requesting this bill be vetoed.

S1353B – Coerced Debt Relief
The Association mounted perhaps its most comprehensive opposition campaign around Senator Cleare’s coerced debt legislation. The Association worked with bill sponsors, committee staff, and stakeholder groups to seek amendments that would protect legitimate collection activities while still addressing genuine economic abuse. Despite extensive engagement, the bill’s expansive definition of “coercion” remained problematic for credit union operations. Hopefully if this is signed into law, subsequent chapter amendments will ease some of the burden.

S8416 – FAIR Business Practices Act
The Association engaged extensively with Senator Comrie’s office and the Attorney General’s staff to seek modifications to the legislation’s vague standards for “unfair” practices. The Association’s advocacy emphasized how credit unions’ cooperative structure and member-focused mission distinguish them from for-profit institutions, warranting different treatment under enforcement provisions.

The Stakeholder Engagement Challenge

The Association’s advocacy work requires careful navigation of complex stakeholder dynamics by balancing supporting consumer protection goals while ensuring credit unions aren’t inadvertently harmed by well-intentioned legislation. This requires extensive engagement with consumer advocacy groups, legislative staff, and other financial services organizations to build understanding of credit union operations and member benefits.

Federal Validation of the Association’s Balanced Approach

NCUA’s recently announced Deregulation Project validates the Association’s balanced advocacy approach. While the federal credit union regulator works to eliminate obsolete and burdensome requirements, the Association has consistently advocated for legislation that supports credit union members while opposing measures that would create unnecessary statutory burdens. This alignment between federal burden reduction efforts and the Association’s state-level advocacy reinforces the Association’s strategic approach.

What the Association’s Comprehensive Advocacy Achieved

The Association’s sustained advocacy efforts throughout 2025 accomplished multiple critical objectives:

Advanced member interests through support of beneficial legislation
Protected operational flexibility by opposing or seeking amendments to problematic bills
Educated lawmakers about credit union operations, member benefits, and cooperative principles
Built upon relationships with legislators, staff, and stakeholder organizations
Demonstrated thought leadership on complex financial services policy issues
Mobilized grassroots engagement from credit union members and leaders
Confirmed the Association as the authoritative voice on credit union policy in New York

The Final Test

Now, after months the Association’s comprehensive advocacy work supporting good bills and opposing problematic ones, key decisions rest with Governor Hochul.

Lessons in Comprehensive Legislative Advocacy

The Association’s 2025 campaign demonstrates the sophistication required in modern legislative advocacy. The Association successfully managed a complex portfolio of legislative priorities, supporting measures that benefit members while opposing those that would impose unnecessary burdens. This comprehensive approach enhanced the Association’s credibility and effectiveness with lawmakers and stakeholders.

But Wait, There’s More!

The Association is hosting a webinar on Wednesday, January 14th at 11:00 a.m. to provide further insight on these legislative changes, answer questions, and provide practical guidance on what credit unions should be prepared for in 2026. This session will equip attendees with the insights needed to navigate compliance impacts, operational adjustments, and emerging opportunities stemming from New York State’s latest legislative actions.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

Cents and Sensibility

On November 19, 2025November 18, 2025 By Jeremy Newman (NYCUA)In RegulatoryLeave a comment

The U.S. Mint, in a federal cost-saving measure, officially ended penny production on November 12, 2025. This concluded a 232-year history, where the final production cycle cost for each coin amounted to 3.69 cents. The end of the penny marked the beginning of new operational headaches. For New York credit unions, those headaches are compounded by statutory and regulatory uncertainty, pending legislation, and practical constraints that make handling cash more complicated than it should be.

The Current Issue: More Than Just Heads or Tails

The numbers tell the story: the Federal Reserve Bank of New York suspended penny orders on September 22, 2025, joining over half of the Fed’s 170 coin distribution terminals nationwide in halting penny services. For New York credit unions, this means no new pennies are coming, and existing inventory must be carefully managed and strategically deployed.

Unlike the gradual phase-outs seen in other countries, America’s penny elimination has been abrupt and largely unplanned. Treasury initially projected production would continue into early 2026, but penny blanks ran out months ahead of schedule. This has left financial institutions scrambling to adapt in real time without clear federal guidance or regulatory frameworks.

New York’s Legal Landscape: Navigating Uncertainty

Here’s where New York credit unions face a particular challenge: the absence of clear regulatory guidance on how to handle the penny shortage creates legal uncertainty. Unlike some other states where businesses have begun implementing rounding practices, New York institutions operate without specific authorization for such measures.

The good news? Relief may be coming. On November 14, 2025, the New York State Senate introduced Senate Bill S8580, dubbed the “New Yorkers for Common Cents Act.” This proposed legislation would require merchants to round cash purchases to the nearest five cents using a specific framework:

Totals ending in 1, 2, 6, or 7 cents would round down
Totals ending in 3, 4, 8, or 9 cents would round up
Transactions of 4 cents or less would be exempt
Non-cash payments would remain exact to the penny

S8580 represents the most comprehensive state-level response to the penny crisis. But until it becomes law, New York credit unions must navigate the shortage without clear statutory authority to implement rounding practices and without any existing NYDFS regulations on point, though the bill would empower DFS to issue them.

Federal Developments to Monitor

While New York grapples with state-specific challenges, several federal legislative proposals could help create a national standard:

The Common Cents Act (S. 1525 and H.R. 3074). The most comprehensive federal response comes in the form of bipartisan legislation known as the Common Cents Act, co-sponsored in the Senate by New York’s Kirsten Gillibrand which would among other things:

Authorize cash transaction rounding to the nearest five cents
Allow continued production of numismatic (collector) pennies if profitable
Preempt state laws that conflict with federal rounding standards

This legislation represents the most likely path to national standardization, potentially resolving a patchwork of state laws currently complicating the transition.

Make Sense Not Cents Act (S. 1554) takes a different approach by letting market forces naturally phase out penny usage rather than mandating rounding.

The Currency Optimization, Innovation, and National Savings (“COINS”) Act (H.R. 1401) proposes a more cautious approach with a 10-year suspension of penny production and a study of consumer and business impacts.

H.R. 1270 would suspend production of both pennies and nickels for 10 years while requiring, among other things, studies on coinage efficiency and a review of consumer payment behavior changes.

While Congress deliberates, federal agencies have issued limited guidance.

Practical Next Steps for New York Credit Unions

Develop Penny Policies: Create interim operational policies for managing penny shortages and member requests while federal or state guidance remains pending.
Implement Collection Programs: Consider member penny collection initiatives to address immediate inventory needs like penny collection jars at teller windows, cross-promotional opportunities with local businesses, and community engagement through penny drives.
Prepare Member Communications: Prepare clear communications explaining how rounding works, when it applies, and what members can expect.
Prepare Systems: Assess technology readiness for potential rounding implementation under either state or federal frameworks.

Looking Forward

The penny may be going away, but the need for clear guidance, fair practices, and member-focused leadership isn’t. Credit unions that navigate this moment thoughtfully won’t just weather the shortage; they’ll prove their value through clarity, fairness, and member-centered decision-making.

After all, in times of change, people need institutions they can trust to help them make cents (sorry, couldn’t resist) of it all. That’s exactly what credit unions do best.

Final Thought

If rounding legislation passes, does that mean my $.02 will officially be worth $0.00?

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

Reach out to me at jeremy.newman@nycua.org Let’s talk.

CU Later, Reputation Risk: NCUA’s Reputation Risk Proposed Rule

On October 24, 2025October 24, 2025 By Jeremy Newman (NYCUA)In RegulatoryLeave a comment

The NCUA’s newest proposal didn’t come with fireworks, but it might be one of the most impactful regulatory moves of the year. By formally eliminating reputation risk from supervision, the agency is swapping subjectivity for something every credit union employee can appreciate: clarity. This proposal isn’t just bureaucratic housekeeping to align with the NCUA’s September announcement. It is a fundamental shift toward objective, measurable regulatory standards that credit unions have been requesting for years.

What Happened

The NCUA issued a Notice of Proposed Rulemaking that formally codifies what the agency announced on September 25th: reputation risk is officially dead as a supervisory tool. But the proposal goes further, creating explicit anti-debanking protections and establishing clear guardrails around what examiners can and cannot do.

The “Why” Behind the Move

Let’s be honest: reputation risk was always the regulatory equivalent of “I know it when I see it.” The NCUA finally acknowledged what credit unions have long argued: assessing reputation risk is “subjective, ambiguous, and lacks measurable criteria.” Translation: it was too often in the eye of the beholder, creating unpredictable examination outcomes.

The agency’s new approach prioritizes “data-driven conclusions” over individual perspectives. For compliance officers who’ve spent sleepless nights wondering how an examiner might interpret their institution’s “reputation,” this is the closest thing to predictability we’ve seen in a while.

The Anti-Debanking Shield

Here’s where things get particularly interesting. The proposed rule explicitly prohibits the NCUA from instructing credit unions to close accounts or terminate services based on a customer’s protected class status or political views. This isn’t just about reputation risk; it’s about preventing politically motivated “debanking.”

This provision directly implements Executive Order 14331, “Guaranteeing Fair Banking for All Americans,” but it also reflects broader concerns about financial institutions being pressured to cut ties with certain industries or political viewpoints. Credit unions now have regulatory cover to serve members based on legitimate business criteria, not political considerations.

What Stays, What Goes

The NCUA isn’t throwing the baby out with the bathwater. Issues previously categorized under reputation risk—like financial liability from active litigation or insider abuse—will still be examined when they pose actual safety and soundness concerns. The difference? These will be evaluated as concrete financial risks, not nebulous reputational concerns.

Think of it this way: if your credit union faces a lawsuit that could result in significant financial damages, that’s still an examination issue. But if your credit union serves a controversial but legal industry, that’s no longer grounds for supervisory concern.

The Broader Regulatory Context

This move fits perfectly with the current administration’s deregulatory agenda and the NCUA’s recent “No Regulation-by-Enforcement” policy. We’re seeing a consistent theme: clearer rules, more predictable outcomes, and less subjective interpretation.

The timing also aligns with similar moves by other banking regulators. The FDIC and OCC have proposed rules limiting the use of reputation risk, creating a more uniform approach across the federal banking system.

Practical Implications for Credit Unions If the Proposal Is Finalized

For Compliance Officers:

Review current policies that may reference reputation risk
Update board reporting to focus on measurable risks
Document business decisions based on objective criteria

For Management:

Consider previously avoided but legal business opportunities
Strengthen documentation of member due diligence processes
Prepare for examinations focused on quantifiable risks

For Boards:

Review risk appetite statements for reputation risk references
Focus governance discussions on measurable risk metrics
Consider strategic opportunities previously constrained by reputation concerns

What’s Next

The proposed rule is now open for public comment through December 22, 2025.

Credit unions should consider engaging in the comment process, particularly to provide examples of how reputation risk assessments previously created uncertainty or limited legitimate business activities.

The Bottom Line

This proposed rule represents more than regulatory cleanup—it’s a fundamental shift toward objective, fair supervision. For an industry built on serving members regardless of their political views or controversial but legal business activities, this provides welcome clarity and protection.

The NCUA deserves credit for acknowledging that good regulation requires clear, measurable standards. This proposal lets credit unions focus on what they do best: serve their members and communities without worrying about subjective regulatory second-guessing.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

Reach out to me at jeremy.newman@nycua.org Let’s talk.

Roundup Through October 13, 2025

On October 14, 2025October 10, 2025 By Jeremy Newman (NYCUA)In Weekly RoundupsLeave a comment

If you were hoping for a breather, let me be the first to apologize for your dashed hopes. From enforcement policy shifts to leadership changes at NY DFS, the regulators have kept things moving. Here’s what credit unions need to know—and how these updates might reshape the compliance landscape heading into Q4.

NCUA Doubles Down on “No Regulation-by-Enforcement” Policy

Chairman Kyle Hauptman issued a formal policy statement reaffirming that enforcement should focus on “clear and significant violations” of existing law
The policy reinforces that examination findings should be based on established rules, not examiner interpretation or agency wish lists
This means no more surprise policy changes buried in enforcement actions; a welcome relief for credit unions tired of regulatory whiplash

Multi-Agency SAR Guidance Gets an FAQ Refresh

NCUA, FDIC, Federal Reserve, OCC, and FinCEN released updated FAQs on Suspicious Activity Reports and AML/CFT requirements
The four FAQs clarify requirements relating to structuring, continuing activity reviews, and decisions not to file a SAR

CFPB Extends Small Business Lending Data Compliance Dates

The CFPB finalized its rule extending Section 1071 compliance dates
The new timelines are: Tier 1—July 1, 2026, with first filing due July 1, 2027; Tier 2—January 1, 2027, with first filing due June 1, 2028; and Tier 3—October 1, 2027, with first filing due June 1, 2028.
Lenders are in Tier 1 if they originated at least 2,500 covered loans in the preceding two years, Tier 2 if they originated at least 500 covered loans, and Tier 3 if they originated at least 100 covered loans.
Lenders can choose their origination look back period: 2022-2023; 2023-2024; or 2024-2025.

New York Department of Financial Services Gets New Leadership

On October 18, Superintendent Adrienne Harris steps down after four years leading the department
Kaitlin Asrow, current Executive Deputy Superintendent of Research & Innovation, becomes Acting Superintendent
Expect NYDFS to maintain its tech-forward regulatory approach; Asrow’s background in fintech and virtual currency regulation suggests continuity in the department’s innovation initiatives.

Looking Ahead

Keep your calendars marked for October 21, 2025, when the Federal Reserve hosts its “Payments Innovation Conference.” Expect discussions on stablecoin use cases, AI in payments, and the convergence of traditional and decentralized finance. It’s the kind of forward-looking conversation that could signal where regulatory attention heads next. You can see the live broadcast at https://www.federalreserve.gov/default.htm or The Fed’s YouTube channel.

Let’s Make This Useful

I want this blog to be as relevant as possible to the people reading it. So:

Got a topic you’d like me to break down?
Burning desire to know more about that headline you read the other day?
Have an industry-related question you want addressed?

Reach out to me at jeremy.newman@nycua.org. Let’s talk.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

Roundup Through September 26, 2025, a/k/a National Compliance Officer Day

On September 26, 2025September 26, 2025 By Jeremy Newman (NYCUA)In Weekly RoundupsLeave a comment

The current image has no alternative text. The file name is: pumpkin-spice.jpg

Happy National Compliance Officer Day to those who celebrate!

Another week, another round of regulatory cliffhangers. With the federal government careening towards a shutdown, flood insurance authorization about to lapse, and the CFPB rolling out an aggressive regulatory agenda, credit unions have plenty on their plates. Oh, and don’t forget about that little rate cut that got a bit of news.

So, grab that second cup of coffee or chai and let’s break down what’s mattered for your credit union radar over the past couple of weeks.

Potential Federal Government Shutdown

Let’s hope this one stays theoretical and on Wednesday morning we can talk about how Congress passed an appropriations bill in the nick of time.

Congress has until September 30 to pass appropriations bills for FY2026 or enact a continuing resolution to avoid a government shutdown. The House passed a short-term funding measure, but the Senate rejected it before they headed home for a one-week recess, scheduled to return September 29.

Non-essential federal operations would halt, furloughing thousands of federal workers nationwide, including many in New York.

As with prior shutdowns, credit unions may serve federal employees through special loan programs, payment flexibility, and financial counseling services. Branches in federal buildings may face access issues.

Essential services and mandatory programs will continue, but regulatory approvals and federal agency disbursements could face delays.

National Flood Insurance Program Authorization Expires September 30, 2025

The NFIP’s authorization expires the same day as the government funding deadline, a double whammy for real estate markets.

During a lapse, borrowers will not be able to purchase new flood insurance contracts, but existing policies remain valid and claims—funds permitting—continue to be paid.

Credit unions must still conduct flood determinations and should provide required disclosures.

CFPB Releases Its Regulatory Agenda

The CFPB unveiled its Spring Unified Agenda with 24 regulatory initiatives. Here are some highlights:

Key Proposed and Pre-Rule Initiatives for Credit Unions:

Personal Financial Data Rights (Section 1033): Open banking rule under reconsideration after being paused in July 2025.
Small Business Lending Data Collection (Section 1071): Compliance dates already extended, but further revisions may be coming.
UDAAP Rulemaking: Potential redefinition of unfair, deceptive, or abusive practices under Section 1031.
Equal Credit Opportunity (Regulation B): Potential clarification of obligations imposed by the Equal Credit Opportunity Act.
Mortgage Servicing Streamlining: Final rules expected to ease servicing for borrowers with payment difficulties.
Fair Credit Reporting (Regulation V): Proposals addressing identity theft and coerced debt.

Wrapping It Up

Between a possible federal government shutdown, flood insurance uncertainty, and some ambitious rulemakings, credit unions have plenty to track before the calendar turns to October. Add a dash of pumpkin spice and you’ve got a recipe for a Fall full of moving pieces.

Let’s Make This Useful

I want this blog to be as relevant as possible to the people reading it. So:

Got a topic you’d like me to break down?
Burning desire to know more about that headline you read the other day?
Have an industry-related question you want addressed?

Reach out to me at jeremy.newman@nycua.org. Let’s talk.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

CU Later, Disparate Impact? NCUA’s Fair Lending Reset

On September 5, 2025September 4, 2025 By Jeremy Newman (NYCUA)In Fair LendingLeave a comment

It may not feel as iconic as the passing and legacy of Giorgio Armani and what he built in fashion but the NCUA’s recent removal of disparate impact from its Fair Lending Guide represents a significant structural shift that credit unions should not overlook.

Quick Refresher: What Is Disparate Impact?

It’s the idea that even if a policy looks neutral on its face, it can still be discriminatory if it disproportionately harms a protected group. The Supreme Court affirmed its role in fair housing law in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. (2015). For years, federal regulators used it as a cornerstone of fair lending oversight.

So, What Happened?

The NCUA’s September 4 announcement follows Executive Order 14281, “Restoring Equality of Opportunity and Meritocracy”, which earlier this year directed federal agencies to step back from disparate impact enforcement. Since then:

CFPB announced through an internal memorandum in April that it will no longer pursue disparate impact cases, instead focusing on intentional discrimination.
OCC removed disparate impact from its Comptroller’s Handbook in July
FDIC followed suit with its Consumer Compliance Examination Manual in August.

Now the NCUA has joined them, stating it will no longer review credit unions’ policies, data, or risk assessments for disparate impact.

What This Means For Credit Unions

The immediate relief:

Examiners won’t request disparate impact risk analyses.
NCUA documentation requirements for disparate impact may ease, but robust documentation remains essential for defending against private litigation and state enforcement actions.
Risk management frameworks can be designed without this specific overlay.

The reality check:

Disparate impact claims are still alive under federal law. Private litigants and the DOJ can bring them.
New York continues to recognize disparate impact under both the New York State Human Rights Law and the New York City Human Rights Law.
Reputational risk remains real. Members and communities expect equitable access to credit, regardless of what’s in an examiner’s checklist.

How To Navigate The New Landscape

Don’t toss the data. Monitoring for disparities is still smart risk management.
Document business reasons. If a policy has uneven effects, be ready to show why.
Watch state rules. States like New York are likely to fill the void left by the federal regulatory shift.
Consult with qualified legal counsel to understand your specific compliance obligations under the changed regulatory environment.
Stay connected to your mission. Equity and inclusion aren’t just regulatory issues. They’re at the heart of the credit union difference.

The Bottom Line

The NCUA (as well as the CFPB and other prudential regulators) may have stepped back, but credit unions can’t afford to. The law—the Equal Credit Opportunity Act and the Fair Housing Act—is still the law and courts have consistently recognized disparate impact claims.

And remember, regulatory winds can shift quickly. A different administration could put disparate impact enforcement right back on the table.

So, even as examiners change their checklists, credit unions need to stay vigilant. Because when it comes to lending fairly, credit unions will do the right thing.

Let’s Make This Useful

I want this blog to be as relevant as possible to the people reading it. So:

Got a topic you’d like me to break down?
Burning desire to know more about that headline you read the other day?
Have an industry-related question you want addressed?

Reach out to me at jeremy.newman@nycua.org Let’s talk.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

Last Week’s Roundup (through August 22, 2025)

On August 25, 2025August 25, 2025 By Jeremy Newman (NYCUA)In Weekly RoundupsLeave a comment

Last week proved compliance news does not run on summer hours. Between the NCUA’s town hall, the CFPB’s ambitious (if blink-and-you-missed-it) rulemaking agenda, new AI guidance from NCUA, and NY DFS cracking down on cybersecurity lapses, the docket is full. Think of this roundup as your compliance espresso shot: strong, focused, and exactly what you need to stay alert.

NCUA Town Hall

The National Credit Union Administration (NCUA) will host a Strategic Plan Town Hall on Tuesday, September 9 from 2-3 p.m. Eastern. The event invites credit union industry stakeholders to provide input on the NCUA Strategic Plan and the upcoming priorities of the agency.

Here is the link to register: Strategic Plan Town Hall registration – WebEx Enterprise Site

Now You See Me-CFPB Spring 2025 Regulatory Agenda

The CFPB published, and then quickly unpublished, its Spring 2025 Rulemaking Agenda. So, while there is not yet an official version of the Agenda, what we did see is plan with twice as many items as the Fall 2024 Agenda with a paradoxical focus on consumer protection and deregulation.

NCUA Launches AI Resource Webpage for Credit Unions

Following on its discussion of Artificial Intelligence at its July Board meeting, the NCUA unveiled a brand-new webpage packed with AI resources designed specifically for credit unions exploring or expanding AI usage. The hub covers areas like AI implementation, risk management, data security, use cases, and cyber-risk considerations.

The site is meant to guide credit unions through the often tricky terrain of vendor vetting, algorithmic transparency, fair lending safeguards, and privacy protections as you explore or enhance AI risk management practices.

NY DFS Enforces $2 Million Cybersecurity Settlement

The New York Department of Financial Services secured a $2 million settlement via consent order with Healthplex, Inc. for cybersecurity regulation violations, highlighting failures in phishing-resistant multi-factor authentication, risk assessments, and timely breach reporting.

While Healthplex is not a credit union, the message is crystal clear even if the DFS does not directly regulate your institution: regulators continue to focus on cybersecurity vulnerabilities and take an aggressive enforcement approach to compliance.

Looking Ahead

With enforcement actions highlighting the importance of internal controls and cybersecurity compliance, new resources to help explore AI solutions, this is an excellent time for credit unions to review their risk management programs and ensure robust oversight of both employees and third-party partnerships.

Let’s Make This Useful

I want this blog to be as relevant as possible to the people reading it. So:

Got a topic you’d like me to break down?
Burning desire to know more about that headline you read the other day?
Have an industry-related question you want addressed?

Reach out to me at jeremy.newman@nycua.org. Let’s talk.

Until Next Time

From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.

Last Week’s Roundup (through August 15, 2025)

On August 18, 2025August 18, 2025 By Jeremy Newman (NYCUA)In Weekly RoundupsLeave a comment

Well, credit unioners, last week proved that even in the dog days of summer impactful activities never take a vacation. From federal courts shaking up interchange fee structures to state attorneys general taking aim at payment platforms, there’s plenty to keep your teams busy. Let’s dive into some of what happened while you were hopefully enjoying some summer downtime.

In other words, CU throughout the week. (Folks, I’m workshopping puns here. They can’t all be winners.)

Corner Post Strikes Again: Interchange Fee Regulation II Overturned and Stayed

U.S. District Judge in North Dakota vacated the Federal Reserve’s Regulation II debit card interchange fee cap
In short, the Court ruled the Fed unlawfully expanded allowable cost categories beyond statutory limits
The decision is stayed pending appeals to prevent market disruption
The ruling does not impact the Fed’s separate October 2023 proposal to further lower the cap

“Debanking” Gets the Executive Treatment

President Trump signed the Guaranteeing Fair Banking for All Americans Executive Order, directing federal agencies, including NCUA and CFPB, to investigate “politicized or unlawful debanking” practices and regulations that could lead to account closures
Emphasizes risk-based assessments should be “reasonable and apolitical”
The EO mandates removal of “reputation risk” language from regulatory guidance

CFPB Reverses Course on Open Banking Rule

CFPB announced it will issue a revised Section 1033 open banking rule rather than withdrawing it entirely as it previously announced
It plans on an accelerated rulemaking process with advanced notice expected within three weeks
Original compliance deadlines starting April 1, 2026, for largest institutions remain in flux

New York AG Sues Zelle Over Fraud Failures

NY Attorney General Letitia James sued Early Warning Services (Zelle’s operator) alleging inadequate security measures enabled over $1 billion in consumer fraud losses between 2017-2023
The suit alleges EWS prioritized rapid expansion over user security, leading to surge in unauthorized access and deceptive payment schemes
AG seeks restitution for affected New Yorkers and demands implementation of stronger anti-fraud measures
This lawsuit follows on the CFPB’s March 2025 dismissal of similar federal lawsuit

Mortgage Trigger Leads Bill Passes Congress

On August 2nd, the Senate passed H.R. 2808, the Homebuyers Privacy Protection Act, will take effect 180 days after President Trump signs the bill into law, will significantly curtail the consumer offensive practice of mortgage trigger leads.
Currently, when a consumer applies for a mortgage loan, the fact that they have done so is sold to other creditors by consumer reporting agencies. These other creditors then inundate the consumer with mortgage solicitations via call, text message, and/or e-mail. In many instances, the consumer is furious with their original creditor because they assume the fact that they applied for a mortgage loan was information that was shared by the creditor.
Under the Act, a creditor will only be able to obtain a mortgage trigger lead from a consumer reporting agency if:
- The creditor will be making a firm offer of credit to the consumer, and
- The creditor submits documentation to the consumer reporting agency that it
  - Has authorization from the consumer to obtain his/her consumer report,
  - Originated the consumer’s residential mortgage loan,
  - Services the consumer’s current residential mortgage loan, or
  - Is an insured depository institution that holds a current account for the consumer.

Looking Ahead

Next week, keep an eye on the Federal Reserve’s response to the interchange fee ruling. The CFPB’s promised “accelerated” open banking rulemaking should also provide more clarity on data sharing timelines. And with the NY AG’s Zelle lawsuit making waves, expect increased scrutiny of P2P payment platform partnerships.