Author: Jeremy Newman (NYCUA)

Cents and Sensibility

On 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 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 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 By Jeremy Newman (NYCUA)In Weekly RoundupsLeave a comment
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      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 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 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 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.

      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.