Source: https://nafcucomplianceblog.typepad.com/nafcu_weblog/hr/
Timestamp: 2019-04-19 02:24:20+00:00

Document:
Economic Census. Your credit union may have gotten an Economic Census form (the forms were sent between October and December). The deadline for completion is February 12th. To help facilitate understanding of this form and the requirement, the Office of Business Liaison at the Department of Commerce has put together information, numerous FAQs and is hosting a webinar on Wednesday, January 24th at 1:00 p.m. EST. Note: There was a prior webinar on October 11th, 2012. The slides from that presentation are here (very large PPT file) and a transcript is available here.
There are additional help resources available here.
The FAQs include specific information for different industries - including credit unions. The credit union FAQs are here and forms are here. Remember, the deadline is February 12th, 2013.
Note: Not every credit union will receive a form. But, be sure to check with folks and see if your CU has and make sure it is completed by February 12th.
There are also numerous other webinars and webcasts this week.
"Staff from [NCUA's] OSCUI and NCUA’s Office of Consumer Protection will discuss ways low-income designated credit unions may improve and increase service to low-income members. In addition, the staff will present sample products and services designed to meet the needs of these members."
NCUA HMDA Webinar. NCUA will also be offering a free webinar entitled HMDA: Accuracy and Timeliness.
The webinar will be Thursday, January 24th at 2 p.m. EST. You can register for the webinar here and you can also send any questions to webinarquestions@ncua.gov.
NCUA also recently issued Regulatory Alert 13-2 which highlights the March 1, 2013 deadline for submitting HMDA data. Earlier, they had sent Regulatory Alert 13-1 which discusses the $42 million asset threshold for 2013 HMDA reporting.
Does anyone know how these Regulatory Alerts are delivered? Why don't they go through NCUA Express? Another one they buried on their website was Regulatory Alert 12-4 on the CFPB's Remittance Rule.
The CFPB's International Remittance Transfer Disclosure Rules - Thursday, January 24th from 2:00 - 3:30 p.m. EST. Mary Lou Heighes will walk attendees through the final rule as well as aspects of the proposed rule that you need to know. Mary-Lou has been very involved in the remittance transfer rule from the start and gave a great presentation at our Compliance Seminar in October. And, because of the importance of this rule - we are extending the early-bird registration price indefinitely. You can sign-up for this webcast any time and receive the early-bird price.
Remember: All of NAFCU's webcasts are available on-demand as well. If you can't make the live webcast (perhaps because you need to watch the HMDA webinar or the Census webinar live), you can always watch the on-demand webcast at a later date.
Top HR Compliance Issues Affecting Credit Unions in 2013 - Wednesday, February 6th from 2:00 - 3:30 p.m. EST. Margaret Fiester from the Society of Human Resource Management (SHRM) will discuss how credit unions will be impacted by various future reforms - including tax reform and health care reform. Register by January 30th to Save $100.
NCCOs: Both of the webcasts above will earn credits toward renewing your NAFCU Certified Compliance Officer (NCCO) designation. If you see this logo - - you'll be sure the webcast will be offering NCCO credits.
New NCCO Affidavit Process: We also have a new, streamlined NCCO affidavit. You can find the fillable-form located here. If you are an NCCO and attend a NAFCU webcast with this symbol - - be sure to use this form.
A pretty eventful Spring so far as the CFPB seems to be hitting their stride. Apologies for politely asking the CFPB to start issuing guidance - who knew they'd begin blasting out Bulletins left and right? I guess that does show how complex and confusing the existing regulatory environment has become.
Below are a couple of quick items. Additionally, if you didn't catch yesterday's free webcast with CFPB Director Cordray you can still view the on-demand version (just register first and then view).
Overdraft Comment Period Extended. The CFPB issued a notice in today's Federal Register that it would be extending the comment period for its Overdraft Inquiry until June 29, 2012. If your CU hasn't submitted comments yet, be sure to take this additional time to do so. NAFCU's Regulatory Alert is here (12-EA-07) but feel free to send your comments directly to the CFPB as well.
"Important note: The DC Circuit Court of Appeals has temporarily enjoined the NLRB’s rule requiring the posting of employee rights under the National Labor Relations Act. The rule, which had been scheduled to take effect on April 30, 2012, will not take effect until the legal issues are resolved. There is no new deadline for the posting requirement at this time."
Prior blog postings on this issue can be found here and here.
NCUA Opinion Letter. NCUA recently issued their third opinion letter of 2012 - this one on appraisals when selling a participation interest in a member business loan. If your CU is involved in these types of issues it is best to review the full letter - 11-1126.
Below are a pair of items for your Wednesday morning.
"As of April 30, 2012, most private sector employers will be required to post a notice advising employees of their rights under the National Labor Relations Act. (The original effective date was postponed.) The notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted. Employers also should publish a link to the notice on an internal or external website if other personnel policies or workplace notices are posted there."
Information on the rationale behind the postponement is here. If your credit union is ready, it is probably best to provide the notice now and move on to the next compliance challenge. We've discussed the NLRB notice requirement in a previous blog post.
NCUA Webpages on Corporate Resolution & NGN Program. Last week (and last year), NCUA announced two new webpages that provide additional information on the Corporate Resolution Costs and the NCUA Guaranteed Notes (NGN) Program. The announcement is here.
Each page also contains additional links on the right-hand side with more detailed information.
As of January 31, 2012 most private sector employers will need to post a notice advising employees of their rights under the National Labor Relations Act. While some employers, such as agricultural, airline, and railroad employers, are exempt, credit unions are not specifically exempt and should post the notice by the effective date.
For more information on these requirements, the NLRB has a handy FAQ page and the poster can be downloaded from this page.
What if my organization is a non-profit? Non-profit organizations are not exempted from the NLRA and are thus required to post the Notice.
What if I am a federal contractor? Federal contractors already are required by the Department of Labor to post a similar notice of employee rights. A contractor will be regarded as complying with the Board’s Notice posting rule if it posts the Department of Labor’s notice.
What if I operate a small business? The Board’s jurisdiction extends to most small business owners. However, some very small employers whose annual volume of business is not large enough to have more than a slight effect on interstate commerce are exempted.
There are two different standards (retail and non-retail) that determine if the Board has jurisdiction. The standard is $500,000 for retail businesses and $50,000 for non-retail businesses.
Credit unions (nonprofit corporations engaged in the extension of consumer credit) are within the Board’s jurisdiction. Credit unions’ operations, like those of many financial institutions, have aspects of both retail and nonretail enterprises. To the extent credit unions lend money to or secure deposits from individuals, their operations appear to be retail in nature. To the extent they invest their funds in Treasury notes or commercial ventures, their activities are nonretail in nature. Thus, the impact on commerce of credit union operations may be measured by either the retail or nonretail standard. East Division, Federal Credit Union, 193 NLRB 682 (1971)."
At the end of the day, I don't think either standard provides a useful guide as they are based on volume which is different than an asset threshold. Rather than wade through the details of the exceptions, the easiest path might be to post the notices and move on to the next compliance challenge.
The FAQs and the main poster page itself provide very useful information.
As you may know, last week, President Obama signed into law The Vow to Hire Heroes Act of 2011 (Heroes Act), which generally provides tax incentives for businesses to hire veterans.
The IRS tax form for claiming the credit is IRS Form 5884, but the current form will need to be updated to conform to the Heroes Act.
To receive the credit, the employer must request and be issued a certification for each employee by a State employment security agency or execute and submit to the IRS a pre-screening notice. The employer must receive the certification by the day the individual begins work or complete IRS Form 8850, the Pre-Screening Notice and Certification Request for the Work Opportunity Credit. The IRS Form 8850 can be filled out and submitted up to 28 calendar days after the hire date.
A veteran will be treated as certified if: (1) such veteran is certified by a State employment security agency as being in receipt of unemployment compensation under State or Federal law for not less than 6 months during the 1-year period ending on the hiring date; or (2) the veteran is certified by such agency as being in receipt of unemployment compensation under State or Federal law for not less than 4 weeks (but less than 6 months) during the 1-year period ending on the hiring date. The time period will determine the tax credit. The legislation gives Treasury/IRS the authority to provide alternative methods for certification of a veteran.
In calculating the tax credit, a tax exempt organization may only take into account wages paid to a qualified veteran for services in the furtherance of the activities related to the purpose or function constituting the basis of the organization's exemption. In addition, the newly hired employee must work for at least 120 hours for any eligibility and 400 hours for full eligibility. The potential employee must be a first time hire and cannot have been employed by the employer at any time in the past.
Here are a few items worth noting on this fine Wednesday morning.
That depends. According to the Bankruptcy Code, private employers may not terminate or discriminate against current employees on the basis of bankruptcy. By comparison, public or governmental employers are forbidden not only from terminating employment or discriminating against current employees on the basis of bankruptcy, but also from denying employment on the basis of bankruptcy. Interestingly, what that means is private employers are not prohibited from denying employment on the basis of bankruptcy. As a practical matter, private employers who may wish to deny employment on the basis of bankruptcy are reminded to not hire employees until proper credit checks are complete. Once hired, the additional protections applied to employees complicate matters significantly.
Some of you may have groaned when you read the first two words of their post: It depends. Stop that groaning! There are so few black and white areas of the law or compliance these days, I tend to get very nervous when I don't see that phrase. You may want to forward this post to your HR division.
Listen to What They Say. Sometimes, you can get a peek into the future with what appears to be a casual statement. I call this "reading the tea leaves." One does have to be careful when trying to read too much into such things, but I think it is not wise to look for such statements. Examples?
1. CFPB and Credit Cards. Following a recent conference that looked at credit cards since the CARD Act, the CFPB took away four lessons. Here's one of their take-aways.
Prior to the CARD Act, there was a wide gap between the initial stated interest rate for a credit card and the actual cost of the credit over time. The CARD Act curtailed certain practices in the credit card industry that created unanticipated costs for consumers. The result has been more transparent pricing: while front end pricing has increased, the overall cost of credit has not.
Now, look at what they said. The CARD Act curtailed the ability of the credit card industry to led to unanticipated costs for consumers. This leads to better "front-end" pricing. I see this to mean the following: All things being equal, the CFPB would like to see front-end pricing. Non-interest income on loans, and fee-income on share accounts will be under increased pressure from the CFPB and other regulators. In the past, we've seen credit card penalty fees and overdraft fees being regulated. Next year, it could be NSF fees, account maintenance fees, and the like.
2. NCUA and Risk. If you read NCUA Letter to Credit Unions 11-CU-03, you'll see that NCUA is concerned about three major areas.
I am no rocket scientist, but when I see a list like this, and NCUA says it will "continue to close monitor and supervise" in these areas - I pay attention.
Here's a nice article on some basic principles regarding attorney-client privilege. Yes, discussions with in-house attorneys can gain the protections of this privilege.
This article talks about possible ways to improve ethics training.
Toiling under a boss who is tough, insensitive, unfair, or unreasonable can be burdensome, but Title VII does not protect employees from the "ordinary slings and arrows that suffuse the workplace every day." Smith v. F.W. Morse & Co., 76 F.3d 413, 425 (1st Cir. 1996). Nevertheless, generally disagreeable behavior and discriminatory animus are two different things.
Absent some showing that gender-based discrimination polluted the workplace, the plaintiffs' constructive discharge claim must fail. See Wagner v. Devine, 122 F.3d 53, 55 n.4 (1st Cir. 1997) (explaining that "a finding of constructive discharge . . . require[s] some showing that the challenged conduct actually was attributable to the alleged discrimination"); see also Carter v. George Washington Univ., 387 F.3d 872, 883 (D.C. Cir. 2004); Konstantopoulos v. Westvaco Corp., 112 F.3d 710, 718 (3d Cir. 1997). We add that, notwithstanding the plaintiffs' repeated references to employees taking stress leaves, the work environment that they depict, though far from ideal, was not so difficult or noxious that a reasonable person would have felt compelled to resign. Roman v. Potter, 604 F.3d 34, 42 (1st Cir. 2010); Suárez, 229 F.3d at 54-55. Indeed, the vast majority of the employees who worked under Khatib, male and female, were subjected to the same treatment and chose to stay. This fact underscores the absence of any foundation for a claim of constructive discharge. See Greenberg v. Union Camp Corp., 48 F.3d 22, 28 (1st Cir. 1995).
Now, you may think that because the court ruled in favor of the employer, that this was a victory for the employer. I sure don't see it that way. This case made it to the federal circuit court. This employer likely has paid a king's ransom in legal bills. I'm betting that the affected workplace was full of stress during depositions, discovery, etc. Claims of discrimination can tear a workplace apart. Boorish behavior by management, while not always impermissible - can lead to large expenses and disruptions. I've always felt that such behavior increases the risk that an organization will receive a claim of discrimination.
Enter Promo Code NAFCU11 to Save 10%.
When it rains, it pours. There's a ton to write about, friends.
Interchange. Yesterday, a major hearing was held on the debit interchange issue in the House. In the Senate, another hearing on Dodd-Frank touched on the debit interchange issue as well. One newsworthy event was that Fed Chairman Bernanke indicated that the "small issuer" exemption language of the Durbin Amendment may be ineffective in shielding smaller credit unions and community banks from the rules limitations on interchange income. Here comes a real shocker - Senator Durbin said the Fed Chairman was wrong. (I tend to agree with Ben on this one, Mr. Senator.) And interestingly, news stories about a possible Congressional delay on the rule began to bubble up. Our lobbyists were on the Hill all day, making our case. The fight continues.
The 18 percent usury ceiling was extended.
NCUA released an IRPS on chartering new corporate federal credit unions.
NCUA also issued its monthly share insurance fund report.
She has three major priorities. 1. Credit cards. 2. Mortgage disclosures. 3. Getting the formerly unregulated to play by the existing rules. She already has teams working on the credit card and mortgage disclosure issues.
She has appointed Elizabeth Vale as the Assistant Director for Community Banks and Credit Unions. We met with Ms. Vale, who seems genuinely eager to hear our side of the story on issues.
I believe that Ms. Warren means what she says, but I will second her thought that the proof of the pudding is in the tasting. As one of the CEOs stated to me before the meeting, every time someone talks about streamlining regulatory burdens, there seems to be 5 new documents that must be signed or produced. As I listened to Ms. Warren, I thought of political stump speeches. You know, where they promise what they will accomplish once they are in office. I love those speeches. But they rarely translate into political realities.
In her efforts to protect consumers while reducing our regulatory burdens and leveling the playing field so that bad actors and credit unions play by the same rules, I wish her all the success in the world. But my job is to worry about federal credit union compliance officers. I've heard talk of easing regulatory burdens before. I'm still waiting for that to take place.
By the way, here's a picture of me meeting Ms. Vale. This is clearly my best side.
Really, that is my best side. Don't believe me? Here's the alternative. That photo clearly shows what twins and Regulation Z will do to a man!
Have a great long weekend, everyone. Until Tuesday, stay compliant.
We've received a number of questions regarding a component of health care reform law that addresses breastfeeding. In short, the new law will require larger employers (those with 50 or more employees) to provide a location that is shielded from view and free from intrusion. Smaller institutions are exempt if complying would create an "undue hardship." Also the rule states that employers are not required to pay employees who take a breastfeeding break, unless state law requires you to do this. This part of health care reform became effective when the Affordable Care Act became effective on March 23, 2010. The Department of Labor is seeking comment on this new requirement.
It is worth noting that the DOL is aware of how complicated this rule may be for certain employers. Imagine fast food restaurants, bus lines and construction sites. Their response shows that while they are interested in feedback, they do expect people to find a way to comply. Here's what they said in their "request for information:"
The Department is aware that there are many work settings that are not in office buildings, and that this can pose unique challenges to providing an adequate space for nursing mothers to express milk. For example, there are nursing employees who work in retail settings, quick service food stores and restaurants, construction or outdoor work sites, factories, or in other non-office building settings. Some of these workplaces may have limited space available to convert into a designated space to express breast milk. In order to meet the obligations of the law, employers need not create a permanent, dedicated space for expressing milk.
The Department is aware that many such employers have found ways to provide break time and space for nursing employees even though there was no readily available "unused" space. For example, in restaurants and small retail settings, employers have made spaces normally designated for other purposes available when needed by the nursing mother. Malls or retail shopping centers have designated shared space to be used by employees of the various tenant businesses. The Department would appreciate comments that address the conditions under which spaces such as manager's offices, storage spaces, utility closets, and other such spaces normally used for other purposes could be considered adequate spaces for use by nursing mothers under the statute. In addition, the Department solicits comments on the kinds of shared space arrangements that would be acceptable under the law.
Similarly, the Department would appreciate comments that address how employers can provide adequate break time and space for nursing employees who are not in a fixed place during a work shift (e.g., bus drivers, mail or parcel delivery workers, law enforcement officers, emergency medical technicians, etc.). In general, the Department would appreciate comments that describe creative solutions to providing break time and space for nursing mothers so that we can share these examples more broadly.
NAFCU is not an HR expert, but here are some resources that might be useful.
The Department of Labor has a page dedicated to the "nursing mothers" issue. The page is a wonderful resource that will really clarify what your credit union has to do. Keep in mind, though, that no regulations have been issued.
Finally, it is important for credit unions to consider reaching out to other organizations that might be helpful when looking at HR issues. Perhaps you have an employee that belongs to SHRM or your credit union belongs to the U.S. Chamber of Commerce. If so, take advantage of those connections.
NCUA issued a few items of note yesterday.
Prohibition orders. First, NCUA issued its most recent batch of prohibition orders. Here's my take on prohibition orders. They are great for training purposes, as they point out to any aspiring criminals within your walls that people are watching, and some people get caught. Second, the prohibition list should be passed along to your HR peeps. These folks are not to be hired by credit unions. If you want a more comprehensive NCUA list, you can go here. Other regulators, such as the OCC, have separate sets of prohibition orders. Here's the OCC's system, which looks like you could easily use to see if someone who is applying at your credit union was the subject of an OCC prohibition order. Again, this is tedious stuff. How tedious? Even some states apparently have their own list of people subject to a prohibition order. Here's the Texas list, for example. If high-powered regulators are reading, here's something I would love to see: a comprehensive list of all prohibition orders that shows the name of the individual, and the regulator that issued the prohibition order (including state-issued orders).
This guidance is perhaps the most complete guidance document written regarding credit unions and foreclosures.
It lays expectations for credit union internal controls regarding the foreclosure process.
In the guidance, NCUA indicates that it will expand examine procedures to include a review of foreclosure procedures in credit unions with residential mortgage programs. If your credit union has such a program, read this guidance and be on the lookout for an AIRES exam questionnaire on the foreclosure issue. If you don't have foreclosure procedures now, you've been warned. Someone will be looking for them shortly.
On my recent visit to Penn State, I stumbled upon a nice surprise. The offices of Penn State Federal Credit Union.
When I attended Penn State, I'm sad to say that I didn't know about this credit union. It would have saved me some big bucks, as my bank at the time had a $1,000 checking balance requirement to evade a $10 monthly service fee. I can tell you this: I never had $1,000 in my account for that long. The $10 fee was a monthly ritual. If you have kids, grand-kids, neighbors, or third cousins, twice removed, who are in college, tell them to see if their school has a credit union.
But here's my son trying to take money out of one of their ATMs. I guess the magnetic strip on his card went bad, as he was unable to obtain cash for his cookie addiction. But when Briggs and Kate attend PSU on their respective sports scholarships, they will become members. I'll see to that.
Oh, and no visit to PSU would be possible without the following picture.
Have a great weekend, everyone! Even you Jets fans.
The Department of Labor is offering a free two-hour webcast on ERISA issues this Thursday. You can read all about it (and sign up) here. You may want to pass this along to whomever runs your credit union's benefits program.
NCUA has released its September 2008 newsletter. You can access it here. While the newsletters are not usually detail-heavy, I find them to be a good, concise read to highlight agency actions.
Yesterday, NCUA issued IRPS 08-1, an IRPS that does...well, I'll allow NCUA to explain.
Section 205(d) of the FCU Act prohibits a person who has been convicted of any criminal offense involving dishonesty or breach of trust, or who has entered into a pretrial diversion or similar program in connection with a prosecution for such offense, from participating in the affairs of an insured credit union except with the prior written consent of the NCUA Board. This IRPS provides direction and guidance to federally-insured credit unions and those persons who may be affected by Section 205(d) because of a prior criminal conviction or pretrial diversion program participation by describing the actions that are prohibited under the statute and establishing the procedures for applying for NCUA Board consent on a case-by-case basis.
You can access the IRPS here. It is a fairly quick read. But it is a must read for your HR department. And if you're a compliance officer, I'd give it a read as well.
The Compliance Guy is looking at a weekend of minor league baseball, family, friends and barbecue. I hope you have as much fun as I plan on having. Have a great weekend, everyone.
You have asked if a federal credit union (FCU) may provide employee benefits to the employees of a CUSO that is wholly-owned or majority-owned by the FCU. You specify that by “provide,” you mean obtain, administer and pay for the benefits. No, that is not permissible. You also have asked, in the alternative, if the FCU may obtain and administer benefits for the CUSO employees if the CUSO pays for them. Yes, this is permissible subject to the conditions discussed below.
An FCU is authorized to provide employee benefits, including retirement benefits, to its employees and officers. 12 C.F.R. §701.19(a). The kind and amount of these benefits must be reasonable given the FCU’s size, financial condition, and the duties of the employees. Id. This authority is expressly limited to the FCU’s employees. It does not extend to the employees of a CUSO, which is a legal entity separate and distinct from the FCU, even if wholly-owned or majority-owned by the FCU. Also, an FCU may provide employee benefits to an FCU employee, who also performs some duties for a CUSO, but only for the duties that employee performs for the FCU.
We believe, as you suggest, that an FCU may obtain and administer employee benefits for CUSO employees, as part of a program for its own employees, if the FCUA does not pay for the benefits for CUSO employees and subject to certain conditions. By “obtain and administer,” you mean the FCU will combine CUSO employees with FCU employees to form a larger employee group solely for administrative convenience and as a cost savings measure to obtain better rates as a result of having a larger group of beneficiaries.
NCUA went on to clarify that if the credit union obtains and administers employee benefits for CUSO employees as noted above, the credit union must take steps to ensure the practice does not alter the legal separateness of the credit union and the CUSO.
This weekend, the Compliance Guy is off to Pittsburgh for his bachelor party. The plan is to watch as much baseball as possible (the Pirates take on the Phillies), eat poorly (Fatheads and Churchbrew), and try not to end up in the Ohio, Allegheny or Monongahela Rivers. I should easily accomplish two out of three goals.
Last week, NCUA issued two prohibition orders against individuals. You can access a press release about it here.
This makes me think of a good analogy that a good friend and security expert gave me once. He indicated that some credit unions build their security systems much like the castles of old. The walls are thick and heavily manned. But if you can get through the wall, there is little security to monitor what happens inside.
These prohibition orders are a good reminder that credit unions should focus their security programs on external and internal threats.
Can you feel it? The stress? The anxiety? That's right - today marks the beginning of the 2008 NAFCU Regulatory Compliance School! More than 120 compliance professionals are rolling up there sleeves, sucking down some coffee, and learning about the credit union regulatory environment. They have five jam-packed days ahead of them. For you NCCO's out there, you know what they are going through. Wish them well!
However, the FCRA does not apply if the employer conducts background checks internally - such as where interviews are conducted directly by employees of the human resources department. For example, a reference verified by the employer - rather than by an outside company retained for this purpose - is not subject to the statute.
The article does a nice job of walking through all the relevant legal issues. Good stuff, people. Good stuff.
The Compliance Guy was watching a film with Tom Cruise this weekend. In the movie, Tom Cruise spent some time running at full speed. Which movie, you may ask? It doesn't matter. I challenge you to think of a movie in which Mr. Cruise does not sprint at some point. Seriously. Just try it.
Does your credit union have a blog policy?
I write a blog for NAFCU. I have friends in the business that write blogs. Everyone seems to have a blog. Importantly though, does anyone in your credit union write a blog? And do you have a policy that addresses it?
"(I)magine a blogger spreading completely speculative rumors that a recently promoted colleague got the job by performing sexual favors for the boss. Conversation that shouldn't go unaddressed in the workplace can be extremely difficult to curb when it occurs anonymously in cyberspace."
"Imagine an employee with a disability who is accommodated with a modified work schedule in compliance with the Americans with Disabilities Act. The employer has properly responded to inquiries about the arrangement by saying only that the company is handling the individual's situation in accordance with federal law. A blogger complains that the 'slacker' is being allowed to come and go as he pleases while the rest of the department suffers for it and speculates about the person's possible medical condition."
Ultimately, the decision on whether to have such a policy is a business decision. The article, however, is a useful read that may get you thinking.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 §701