January 24, 2025 • 26 mins
What if the credit union mortgage industry is on the cusp of major changes as the political landscape shifts in Washington? Join ACUMA President Peter Benjamin on the next episode of the ONpoint Podcast as we unpack the complexities of the current political climate with our insightful guest, Leah Dempsey, Shareholder from Brownstein Hyatt Farber Schreck. With her expertise, we navigate the anticipated transitions within federal agencies, focusing on the bold moves by CFPB Director Chopra, even amidst congressional pushback, as President Trump gears up to take office. Leah provides an expert roadmap on what industry insiders can expect from these regulatory shifts, including the challenges of unwinding previous rulemaking actions. The episode also tackles the looming transitions at major finance agencies like the FHFA and NCUA.
Tune in for a comprehensive discussion that promises to enhance your understanding of the regulatory landscape and its potential impact on the credit union mortgage sector.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The views and opinions expressed in this
podcast do not necessarilyreflect the views or positions
of Acuma, its board of directors, its management staff or its
members.
The podcast discussionpresented is conversational in
nature and for generalinformation only.
Speaker 2 (00:31):
Hello and welcome to Actions On Point Podcast, the
policy series where we focus onpolicy issues impacting the
credit union mortgage industry.
I'm your host, peter Benjamin,joining us today as our resident
expert is Leah Dempsey.
Shareholder with Brownstein.
Leah, how are you doing today?
Speaker 3 (00:47):
shareholder with Brownstein Leah.
How are you doing today?
I am doing well.
It's the Friday beforeinauguration in DC, so a busy
weekend to come, I think, andprobably lots of traffic and
crowds.
Speaker 2 (00:56):
Absolutely, absolutely A very cold Friday
before inauguration.
Now to that point.
So here we are, the Fridaybefore the inauguration.
We to that point, all right.
So here we are, the Fridaybefore inauguration.
You know we're sitting down.
You know, and we're purposelysitting down before the
inauguration because we reallywant to outline, you know, the
things to come.
Now this episode is going toair, you know, the 31st Friday,
(01:18):
the 31st, and the whole point ofthis is that we really want to
kind of provide a roadmap forour listeners and what they can
expect in the weeks, the monthsahead.
You know, in the newadministration, you know
possible agency transitions, youknow things that could come
down the pipe, but also you know, of course, you know there are
(01:40):
things that are still activelyhappening within the government
that we want to mention, thingsthat are still actively
happening within the governmentthat we want to mention.
So if you could, I'll take mynormal step back.
Speaker 3 (01:54):
Provide us the latest and greatest that's happening
in Washington, sure.
Well, next week there's goingto be a flurry of activity.
There's the changing ofpolitical parties, which with
that brings a lot of stafftransitions.
A lot of you know people willbe stepping down from political
roles at the federal agencies.
(02:15):
Some have, notably not steppeddown yet.
Director Chopra at the CFPB hasnot yet stepped down.
So we will see if that happensover the weekend or if he's
asked to step down oncePresident Trump is sworn in.
But I'm sorry, sure.
Speaker 2 (02:36):
And I think I probably jumped the gun on this
and I apologize for interruptingyou to you, but you know Sandra
Thompson, like you're probablygetting ready to say, you know
Sandra Thompson came out andsaid okay, I was planning to sit
down on the 19th right.
Is it normal for someone tokind of just hold out?
Or is it normal for someone tokind of just say, right before
(02:59):
the election or the inauguration, excuse me, the the step down?
Speaker 3 (03:05):
Yeah, or the inauguration.
Excuse me to step down?
Yeah.
Well, I would say.
Most other financial regulatorshave indicated they're going to
step down.
Gary Gensler has indicated he'sgoing to step down.
Senator Thompson did.
Often, the president will givethe directors of agencies an
opportunity within a two-hourwindow to either step down or be
(03:27):
fired.
So I think if Director Choprachooses not to step down, he
will likely be given that choiceby President Trump next week
and we will see what happens.
But it, by all accounts, hasbeen a little bit of an odd few
weeks at the CFPB in terms ofthe fact that they, you know,
(03:48):
chose to ignore letters fromCongress asking to put a pause
on rulemaking efforts andpolicymaking efforts after the
election and not only just focuson getting a few items out the
door that may have had a lot ofwork done on them or may have
been close to final, but reallyemptied the entire shelves of
(04:10):
anything the CFPB was thinkingabout or even things that were
not on the rulemaking agenda.
We've seen a whole number ofenforcement actions coming out
pretty much every day since theelection, so it's been a very
busy time there.
The director of the CPB haschosen to take maybe a different
(04:31):
path than many in his responseto the election, but I think
come next week there will besome efforts to address some of
that to address some of that.
Speaker 2 (04:51):
So okay, so now that's interesting.
Yeah, that any.
Is this like, almost like his,his, his alamo, last stand type
thing, like he just fighting tothe you know the last minute as
much as he possibly can, or isthis you know we've?
I guess I'll take a step back.
You know Zach mentions this andyou've mentioned this in the
past.
This is not uncommon almostsetting the stage for future
(05:16):
administrations to the pointwhere there's going to know, at
some point in time there will beanother democrat in in office.
You know where he's just tryingto push us as much as he
possibly can through with thehopes that the next democrat
might pick up his this torch orthe next democrat cfv director
(05:41):
might pick up that torch.
Is that the idea behind this?
Speaker 3 (05:44):
I think so.
I think he's taking acalculated risk.
That unwinding regulatoryactions is there.
You know it's not, it's notsuper easy to do.
There's, there's, a number ofoptions for doing it.
There's a lot of activity in thecourts right now challenging
some of what has been done overthe past few weeks.
(06:05):
There's efforts underway withCongress to have Congressional
Review Act challenges to some ofthe work, and then there's also
the agency, under theiradministrative process, has
options for rolling things back.
But all of that takes time, allof it takes effort, all of it
(06:45):
takes time.
All, then, you know, arguablycannot move forward in a
substantially similar way with arulemaking in that area.
We saw that with thearbitration rules, although we
saw this week a proposal thatlooked very much like the
arbitration rule that was struckdown under the congressional
review act.
So, um, also not necessarilyheeding any warnings from that
(07:09):
previous um challenge fromcongress this week, but um,
there's also the litigation that, if you know, some of these
rulemakings, like the, forinstance, both the overdraft
final rule and the medical debtcredit reporting final rule, are
in litigation.
Depending on how that turns out, it could make it very
(07:33):
difficult for the agency to godown that path again.
So you know I personally andI'll give the caveat that my
firm is directly involved in themedical debt credit reporting
litigation so probably have abiased view of this.
But I think some of thedecisions there could show show
(07:57):
some of the sloppiness ofpushing things out too quickly
without doing the data analysisthat should go into such a major
rulemaking and that could comeback to bite.
(08:21):
I think some of the effortsfrom the medical debt credit
reporting issue in the finalrule had a discrepancy of within
the rule the CPB said thatthere would be like a nine
hundred million dollar impact onthe health care industry but
(08:47):
then, within the same rule, alsosaid there would be a 2% impact
on bad debt in the healthcareindustry which just looking at
hospital debt alone is more like$900 billion.
So they made a few billiondollar rounding error in the
analysis that was done.
Rounding error in the analysisthat was done and I think you
(09:07):
know part of that arguably isprobably from you know, rushing
and putting things out asquickly as possible.
So I think there's somecalculated political risk, maybe
some, maybe there there mightbe some benefits to that, but
there might also be some majorchallenges associated with that
as well.
Speaker 2 (09:26):
Okay, so you know, kind of going back to the
medical debt on a credit, andthat most certainly was
something on my list of thingsto talk to you about and and
they kind of summarize that youknow that is, you know, recent.
You know a recent rule put outby the CPB essentially said that
medical debt is no longerrequired to be put or listed on
(09:50):
credit.
In a nutshell, right, andvarious trades have concerns
based off that and the impactfor groups to be able to collect
on that debt because it's notset on credit, as well as how it
may impact the borrowers' trueability to qualify for various
(10:14):
types of loan products.
Am I understanding thatcorrectly?
Speaker 3 (10:19):
Yes, yes, you know, from the lender's side they
essentially cannot receiveinformation about whether
there's medical debt onconsumers credit reports anymore
.
But if a consumer voluntarilyprovides medical information,
they then have to use it andthey have to align with the
(10:43):
CPV's ability to repayrequirements that have been laid
out in other rules, such asRIGS-E, which is really it's
complicated and it's, I think,very problematic.
And Cornerstone Credit UnionLeague is one of the plaintiffs
in some of the litigation onthis and really outlined some of
(11:05):
their concerns with why thiscould be problematic for credit
unions.
At a very basic level, thatjust seems like that's a number
of compliance concerns and youknow legal litigation risks
(11:39):
associated with rules like thatthat have, um, you know, not
necessarily intuitive um ways tocomply with.
Speaker 2 (11:50):
Okay, all right, okay , thank you.
Um, so kind of going back, uh,taking a few steps back and
going back to the agencytransition conversation.
You know, when we look at FHFA,cpb and obviously we know that
Sandra Thompson stepping downSunday the 19th and Chopra is
(12:12):
going to hold out to his thevery last stand and any hints as
to who possibly could be takingthose, those seats?
Speaker 3 (12:23):
yes, so the fhfa director that was announced it's
going to be bill pulte, who issomeone whose family has been in
the home building industry formany decades.
We believe that he's going tobe bringing on some current
(12:47):
staff at FHFA, so people thathave worked at the agency before
on the Republican side andpeople that are probably very
familiar with the work that MarkCalabria did when he was the
FHFA director under the priorTrump administration.
That is all very new.
We're going to see next week,once Director Thompson steps
down, how that all comestogether in terms of staffing
(13:09):
and priorities that are beingrolled out, but I think we can
assume that there will be somemajor shifts in the thinking on
certain things.
There's been a lot ofdiscussion about GSE reform and
that topic, so we can pretty Ithink we can be pretty sure that
(13:31):
that's going to be somethingthat they're thinking about, and
talking about early on isthey're staffing up and figuring
out what their priorities looklike.
They're going to have to workclosely with Treasury on that,
so there's still probably anumber of steps that have to be
taken before that whole processbecomes totally clear.
(13:51):
It's also very likely that we'vebeen seeing a deluge of
regulations coming out of FHFA,many not necessarily directly
relevant to the original missionof the agency.
You know, things likeregulations about tenant
protections that many peoplemight argue really belong in
(14:15):
somewhere like HUD that is morefocused on should arguably be
more focused on some of thosehousing issues and consumer
housing issues.
So I think we will seepotentially some efforts to
narrow the scope of what theagency has been working on
compared to over the last twoyears where they've really
(14:37):
opened a can of worms on a wholehost of things.
They've done the 100-yearreview of the home loan bank
system.
That I still think will berelevant and something to be
discussed but is probably notgoing to be anywhere near as
broad as the many RFIs that cameout on that.
So we will have a betterindication by the next time we
(15:03):
talk.
But you know initially thoseare a few of the areas that
they're going to have to take alook at the work that was done
over the past two years anddecide how they want to move
forward.
Speaker 2 (15:13):
Okay, what about CFPB ?
Speaker 3 (15:19):
how they want to move forward.
Okay, what about cfb?
Next director?
Cfb um we are hearing there'sactually not an nominee, has not
been announced as of this date.
They we expect that they arelikely going to have an acting
(15:40):
director.
Take um director.
We expect that Donald Trump nextweek is going to issue a
regulatory freeze and you know,arguably some might say that
only applies to the executiveagencies, but typically the
independent agencies also followthat as well.
There may even be some languagein the executive orders telling
(16:04):
the independent agencies tocomply as well.
So I think the acting directorwill be tasked with putting in
place that freeze and reviewingeverything that is in motion,
everything that's being sent tothe federal register, everything
that's being sent to OMB anddetermining where those things
stand.
So that can be expected.
(16:25):
We're also expecting anywherebetween 100 and 300 executive
orders next week.
So there's going to be a lot totake a look at there and track.
So it's going to probably it'sreally going to take a few weeks
to shake out.
(16:46):
I know a lot of my clients arevery eager to meet with the new
staff at the CPP right away andtalk about things like this
medical debt rule and theoverdraft rule and you know this
Fair Credit Reporting Actproposed rule and explain some
of the concerns and thetimelines there.
(17:08):
I do think it will take a fewweeks to shake out, to determine
exactly who's making some ofthose decisions and who's going
to be taking a look with maybe afresh set of eyes on some of
those issues.
But that will be happening andit will be an important time for
(17:30):
the credit union industry tojust keep following along about
what's happening.
Following along about what'shappening.
There may be some regulationsthat are not going to go in
place or or, you know, beingpulled back, and it's just.
It will be a busy time to justmake sure everyone's
understanding what theirexpectations are and what might
(17:51):
be, you know, changes goingforward into the spring.
Speaker 2 (17:54):
Okay, you know, I think, you know.
I think you know, as youmentioned, you know it's
important for the credit unionindustry to pay close attention
on you know, during thistransition period.
You know one of the things thatwe really haven't talked about
much.
I mean, we've talked about alittle bit but any, any possible
changes that ncaa.
Speaker 3 (18:17):
Well, yes, so we.
It's NCUA is a little bitdifferent than other agencies in
that it's going to probablyremain two Democrats and one
Republican for several monthsstill.
It's not that immediate flipthat you get at some of the
(18:37):
other agencies, flip that youget at some of the other
agencies.
Chairman Huffman will be takingover and you know he, as the
Republican, will now be leadingthe NCUA.
So that will be different thanyou know what's going on now.
But he won't necessarilyimmediately have the votes to
(18:58):
make sweeping changes on the,you know, to align with exactly
what he's thinking.
You know NCUA in general tendsto be a little bit less
political than the averageagency.
I think you could argue theyare a little bit more
successfully independent thansome of the other independent
agencies.
I know there's many caveats tothat, but, um, they are, I would
(19:23):
say, out of those three,probably the least impacted by
the election, although certainlyvery much impacted okay, okay,
and you, you hinted at it.
Speaker 2 (19:34):
So you know, just for the sake of time, let's, let's
move on the fcra ruling.
What's happening with that?
Speaker 3 (19:42):
Yes, so there was a sweeping proposal that came out
a few weeks ago related to howyou use data and you know a
whole host of other issues underthe Fair Credit Reporting Act
that would certainly impactACUMA members.
Essentially, a whole anothergroup of use of the credit data
(20:10):
system would be considered CRAsand there would be new
compliance burdens that would betriggered once they are
considered CRAs.
Speaker 2 (20:22):
And when you say CRAs , you're referring to credit
reporting agencies.
Speaker 3 (20:24):
Credit reporting agencies yeah, sorry about that,
too many acronyms in thispodcast but just the use of
public data under this proposalwould be vastly different if it
went into effect.
And it's sweeping, sweeping andit's something that many
industries during thissub-briefer process provided
(20:46):
comments on and presented somereally serious concerns about.
The CFPB decided to put it outbefore the inauguration, even
though it's unlikely that thecomment period is due in March.
So it's probably unlikely to befinalized.
But it's something that I thinkindustry should take a look at
(21:09):
because you know one to yourfirst point on the podcast some
of these ideas may come backagain four years from now or
eight years from now at thefederal level and they'll
certainly come back even soonerthan that at the state level.
The CFPB just yesterdayreleased this whole packet of
(21:34):
information that they basicallysent to the states telling them
to go forth with the mission ofthe Biden administration CFPB,
and we certainly think that anumber of blue states are going
to be doing that.
So it's even some of theseproposals and final rules that
may, at the federal level, getput on pause.
(21:57):
They may very well pop up atthe state level or, you know,
become finalized at the statelevel very quickly.
So I would encourage peoplethat not to put these things
aside and not think about them,because some of them could have
a massive impact on the creditcredit union industry and maybe
(22:19):
back sooner or later.
Speaker 2 (22:21):
Okay, and just for the sake of clarity, the FCRA
rule you're really referring tothe data broker rule, right Data
?
Broker yes, Okay, okay, youknow it's interesting, right.
So, if I understood itcorrectly, it's the collection
of certain data points withinthe credit report and whether or
(22:43):
not we end up, or certain datapoints and whether or not we end
up becoming, as a credit union,credit reporting agencies.
Is that right?
Speaker 3 (22:54):
It could be in certain circumstances.
Speaker 2 (22:57):
That's interesting, that's absolutely crazy.
Speaker 3 (23:00):
It's insane.
Speaker 2 (23:04):
That's OK, it's insane.
That's okay, that's fascinating.
I I can see why there's so muchpushback from that.
Okay, um, before we we kind oftransition to the end any final
thoughts, anything else?
Speaker 3 (23:16):
um, I don't think so.
I mean, I think we we're goingto have a lot to talk about at
the next few ACUME meetings.
There's going to be a lot oftransition, I think, going into
next week.
I know some people aredisappointed about the election
results and you know we all haveour chance every two years and
(23:38):
I think we we should, just as amovement, um, we do a great job
of being bipartisan and thinkingabout the opportunities for
credit unions and no matter whatthe election outcome is and I
think, um, no matter what yourfeelings on the election itself
are, um, there are some reallygood opportunities for the
(23:59):
credit union system to roll backsome regulations that are
probably making it harder foryou to lend and harder for you
to have members, and there aresome good opportunities to get
some fresh set of eyes on thingsthat may have been problematic.
There's also, maybe, somechallenges in Congress there's I
(24:21):
know Zach previously talkedabout the concerns about the tax
exemption and how that could beat risk.
We actually saw today the Waysand Means Committee put out a
very, I would say, rough list ofideas of potential pay-fors for
(24:42):
the tax bill, and the creditunion tax status was on that
list.
That I'm not saying this is byany means a final list.
That is definitely going to bein the bill, but it is at this.
You know, seeing that listtoday, I know we all thought it
might be on the potential menuor on the table.
All thought it might be on thepotential menu or on the table.
(25:04):
It is officially on the menuand on the table, so there could
be some challenges associatedwith that on the Hill as well.
So a lot to do and a lot tofollow and just looking forward
to continuing to talk with youguys about it and hope everyone
stays warm over this very coldweekend and if you choose not to
watch inauguration?
(25:25):
um, find some good tv under ablanket with some hot chocolate
and watch something else.
And if you want to watchinauguration, um, hope everyone
enjoys I know, seriously, I meanhey, there's always football,
exactly yeah, always footballthere's always football, exactly
.
Speaker 2 (25:39):
Always football, there's always football.
The Ohio State.
I did that for Justin, allright.
Well, leah, as always, thankyou very much for your time.
Truly do appreciate it.
I guess we'll just close out.
Well, leah, as always, thankyou very much, and to all of you
, we know your time is valuable.
Thank you for tuning in to thelatest episode of Acuma's On
(26:00):
Point Podcast.
We hope you enjoyed it.
Speaker 1 (26:05):
Until next time be well, my friends.
Thanks for listening.
We'll see you next time at theAcuma On Point Podcast.
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The views and opinions expressed in this
podcast do not necessarilyreflect the views or positions
of Acuma, its board of directors, its management staff or its
members.
The podcast discussionpresented is conversational in
nature and for generalinformation only.
Speaker 2 (00:31):
Hello and welcome to Actions On Point Podcast, the
policy series where we focus onpolicy issues impacting the
credit union mortgage industry.
I'm your host, peter Benjamin,joining us today as our resident
expert is Leah Dempsey.
Shareholder with Brownstein.
Leah, how are you doing today?
Speaker 3 (00:47):
shareholder with Brownstein Leah.
How are you doing today?
I am doing well.
It's the Friday beforeinauguration in DC, so a busy
weekend to come, I think, andprobably lots of traffic and
crowds.
Speaker 2 (00:56):
Absolutely, absolutely A very cold Friday
before inauguration.
Now to that point.
So here we are, the Fridaybefore the inauguration.
We to that point, all right.
So here we are, the Fridaybefore inauguration.
You know we're sitting down.
You know, and we're purposelysitting down before the
inauguration because we reallywant to outline, you know, the
things to come.
Now this episode is going toair, you know, the 31st Friday,
(01:18):
the 31st, and the whole point ofthis is that we really want to
kind of provide a roadmap forour listeners and what they can
expect in the weeks, the monthsahead.
You know, in the newadministration, you know
possible agency transitions, youknow things that could come
down the pipe, but also you know, of course, you know there are
(01:40):
things that are still activelyhappening within the government
that we want to mention, thingsthat are still actively
happening within the governmentthat we want to mention.
So if you could, I'll take mynormal step back.
Speaker 3 (01:54):
Provide us the latest and greatest that's happening
in Washington, sure.
Well, next week there's goingto be a flurry of activity.
There's the changing ofpolitical parties, which with
that brings a lot of stafftransitions.
A lot of you know people willbe stepping down from political
roles at the federal agencies.
(02:15):
Some have, notably not steppeddown yet.
Director Chopra at the CFPB hasnot yet stepped down.
So we will see if that happensover the weekend or if he's
asked to step down oncePresident Trump is sworn in.
But I'm sorry, sure.
Speaker 2 (02:36):
And I think I probably jumped the gun on this
and I apologize for interruptingyou to you, but you know Sandra
Thompson, like you're probablygetting ready to say, you know
Sandra Thompson came out andsaid okay, I was planning to sit
down on the 19th right.
Is it normal for someone tokind of just hold out?
Or is it normal for someone tokind of just say, right before
(02:59):
the election or the inauguration, excuse me, the the step down?
Speaker 3 (03:05):
Yeah, or the inauguration.
Excuse me to step down?
Yeah.
Well, I would say.
Most other financial regulatorshave indicated they're going to
step down.
Gary Gensler has indicated he'sgoing to step down.
Senator Thompson did.
Often, the president will givethe directors of agencies an
opportunity within a two-hourwindow to either step down or be
(03:27):
fired.
So I think if Director Choprachooses not to step down, he
will likely be given that choiceby President Trump next week
and we will see what happens.
But it, by all accounts, hasbeen a little bit of an odd few
weeks at the CFPB in terms ofthe fact that they, you know,
(03:48):
chose to ignore letters fromCongress asking to put a pause
on rulemaking efforts andpolicymaking efforts after the
election and not only just focuson getting a few items out the
door that may have had a lot ofwork done on them or may have
been close to final, but reallyemptied the entire shelves of
(04:10):
anything the CFPB was thinkingabout or even things that were
not on the rulemaking agenda.
We've seen a whole number ofenforcement actions coming out
pretty much every day since theelection, so it's been a very
busy time there.
The director of the CPB haschosen to take maybe a different
(04:31):
path than many in his responseto the election, but I think
come next week there will besome efforts to address some of
that to address some of that.
Speaker 2 (04:51):
So okay, so now that's interesting.
Yeah, that any.
Is this like, almost like his,his, his alamo, last stand type
thing, like he just fighting tothe you know the last minute as
much as he possibly can, or isthis you know we've?
I guess I'll take a step back.
You know Zach mentions this andyou've mentioned this in the
past.
This is not uncommon almostsetting the stage for future
(05:16):
administrations to the pointwhere there's going to know, at
some point in time there will beanother democrat in in office.
You know where he's just tryingto push us as much as he
possibly can through with thehopes that the next democrat
might pick up his this torch orthe next democrat cfv director
(05:41):
might pick up that torch.
Is that the idea behind this?
Speaker 3 (05:44):
I think so.
I think he's taking acalculated risk.
That unwinding regulatoryactions is there.
You know it's not, it's notsuper easy to do.
There's, there's, a number ofoptions for doing it.
There's a lot of activity in thecourts right now challenging
some of what has been done overthe past few weeks.
(06:05):
There's efforts underway withCongress to have Congressional
Review Act challenges to some ofthe work, and then there's also
the agency, under theiradministrative process, has
options for rolling things back.
But all of that takes time, allof it takes effort, all of it
(06:45):
takes time.
All, then, you know, arguablycannot move forward in a
substantially similar way with arulemaking in that area.
We saw that with thearbitration rules, although we
saw this week a proposal thatlooked very much like the
arbitration rule that was struckdown under the congressional
review act.
So, um, also not necessarilyheeding any warnings from that
(07:09):
previous um challenge fromcongress this week, but um,
there's also the litigation that, if you know, some of these
rulemakings, like the, forinstance, both the overdraft
final rule and the medical debtcredit reporting final rule, are
in litigation.
Depending on how that turns out, it could make it very
(07:33):
difficult for the agency to godown that path again.
So you know I personally andI'll give the caveat that my
firm is directly involved in themedical debt credit reporting
litigation so probably have abiased view of this.
But I think some of thedecisions there could show show
(07:57):
some of the sloppiness ofpushing things out too quickly
without doing the data analysisthat should go into such a major
rulemaking and that could comeback to bite.
(08:21):
I think some of the effortsfrom the medical debt credit
reporting issue in the finalrule had a discrepancy of within
the rule the CPB said thatthere would be like a nine
hundred million dollar impact onthe health care industry but
(08:47):
then, within the same rule, alsosaid there would be a 2% impact
on bad debt in the healthcareindustry which just looking at
hospital debt alone is more like$900 billion.
So they made a few billiondollar rounding error in the
analysis that was done.
Rounding error in the analysisthat was done and I think you
(09:07):
know part of that arguably isprobably from you know, rushing
and putting things out asquickly as possible.
So I think there's somecalculated political risk, maybe
some, maybe there there mightbe some benefits to that, but
there might also be some majorchallenges associated with that
as well.
Speaker 2 (09:26):
Okay, so you know, kind of going back to the
medical debt on a credit, andthat most certainly was
something on my list of thingsto talk to you about and and
they kind of summarize that youknow that is, you know, recent.
You know a recent rule put outby the CPB essentially said that
medical debt is no longerrequired to be put or listed on
(09:50):
credit.
In a nutshell, right, andvarious trades have concerns
based off that and the impactfor groups to be able to collect
on that debt because it's notset on credit, as well as how it
may impact the borrowers' trueability to qualify for various
(10:14):
types of loan products.
Am I understanding thatcorrectly?
Speaker 3 (10:19):
Yes, yes, you know, from the lender's side they
essentially cannot receiveinformation about whether
there's medical debt onconsumers credit reports anymore
.
But if a consumer voluntarilyprovides medical information,
they then have to use it andthey have to align with the
(10:43):
CPV's ability to repayrequirements that have been laid
out in other rules, such asRIGS-E, which is really it's
complicated and it's, I think,very problematic.
And Cornerstone Credit UnionLeague is one of the plaintiffs
in some of the litigation onthis and really outlined some of
(11:05):
their concerns with why thiscould be problematic for credit
unions.
At a very basic level, thatjust seems like that's a number
of compliance concerns and youknow legal litigation risks
(11:39):
associated with rules like thatthat have, um, you know, not
necessarily intuitive um ways tocomply with.
Speaker 2 (11:50):
Okay, all right, okay , thank you.
Um, so kind of going back, uh,taking a few steps back and
going back to the agencytransition conversation.
You know, when we look at FHFA,cpb and obviously we know that
Sandra Thompson stepping downSunday the 19th and Chopra is
(12:12):
going to hold out to his thevery last stand and any hints as
to who possibly could be takingthose, those seats?
Speaker 3 (12:23):
yes, so the fhfa director that was announced it's
going to be bill pulte, who issomeone whose family has been in
the home building industry formany decades.
We believe that he's going tobe bringing on some current
(12:47):
staff at FHFA, so people thathave worked at the agency before
on the Republican side andpeople that are probably very
familiar with the work that MarkCalabria did when he was the
FHFA director under the priorTrump administration.
That is all very new.
We're going to see next week,once Director Thompson steps
down, how that all comestogether in terms of staffing
(13:09):
and priorities that are beingrolled out, but I think we can
assume that there will be somemajor shifts in the thinking on
certain things.
There's been a lot ofdiscussion about GSE reform and
that topic, so we can pretty Ithink we can be pretty sure that
(13:31):
that's going to be somethingthat they're thinking about, and
talking about early on isthey're staffing up and figuring
out what their priorities looklike.
They're going to have to workclosely with Treasury on that,
so there's still probably anumber of steps that have to be
taken before that whole processbecomes totally clear.
(13:51):
It's also very likely that we'vebeen seeing a deluge of
regulations coming out of FHFA,many not necessarily directly
relevant to the original missionof the agency.
You know, things likeregulations about tenant
protections that many peoplemight argue really belong in
(14:15):
somewhere like HUD that is morefocused on should arguably be
more focused on some of thosehousing issues and consumer
housing issues.
So I think we will seepotentially some efforts to
narrow the scope of what theagency has been working on
compared to over the last twoyears where they've really
(14:37):
opened a can of worms on a wholehost of things.
They've done the 100-yearreview of the home loan bank
system.
That I still think will berelevant and something to be
discussed but is probably notgoing to be anywhere near as
broad as the many RFIs that cameout on that.
So we will have a betterindication by the next time we
(15:03):
talk.
But you know initially thoseare a few of the areas that
they're going to have to take alook at the work that was done
over the past two years anddecide how they want to move
forward.
Speaker 2 (15:13):
Okay, what about CFPB ?
Speaker 3 (15:19):
how they want to move forward.
Okay, what about cfb?
Next director?
Cfb um we are hearing there'sactually not an nominee, has not
been announced as of this date.
They we expect that they arelikely going to have an acting
(15:40):
director.
Take um director.
We expect that Donald Trump nextweek is going to issue a
regulatory freeze and you know,arguably some might say that
only applies to the executiveagencies, but typically the
independent agencies also followthat as well.
There may even be some languagein the executive orders telling
(16:04):
the independent agencies tocomply as well.
So I think the acting directorwill be tasked with putting in
place that freeze and reviewingeverything that is in motion,
everything that's being sent tothe federal register, everything
that's being sent to OMB anddetermining where those things
stand.
So that can be expected.
(16:25):
We're also expecting anywherebetween 100 and 300 executive
orders next week.
So there's going to be a lot totake a look at there and track.
So it's going to probably it'sreally going to take a few weeks
to shake out.
(16:46):
I know a lot of my clients arevery eager to meet with the new
staff at the CPP right away andtalk about things like this
medical debt rule and theoverdraft rule and you know this
Fair Credit Reporting Actproposed rule and explain some
of the concerns and thetimelines there.
(17:08):
I do think it will take a fewweeks to shake out, to determine
exactly who's making some ofthose decisions and who's going
to be taking a look with maybe afresh set of eyes on some of
those issues.
But that will be happening andit will be an important time for
(17:30):
the credit union industry tojust keep following along about
what's happening.
Following along about what'shappening.
There may be some regulationsthat are not going to go in
place or or, you know, beingpulled back, and it's just.
It will be a busy time to justmake sure everyone's
understanding what theirexpectations are and what might
(17:51):
be, you know, changes goingforward into the spring.
Speaker 2 (17:54):
Okay, you know, I think, you know.
I think you know, as youmentioned, you know it's
important for the credit unionindustry to pay close attention
on you know, during thistransition period.
You know one of the things thatwe really haven't talked about
much.
I mean, we've talked about alittle bit but any, any possible
changes that ncaa.
Speaker 3 (18:17):
Well, yes, so we.
It's NCUA is a little bitdifferent than other agencies in
that it's going to probablyremain two Democrats and one
Republican for several monthsstill.
It's not that immediate flipthat you get at some of the
(18:37):
other agencies, flip that youget at some of the other
agencies.
Chairman Huffman will be takingover and you know he, as the
Republican, will now be leadingthe NCUA.
So that will be different thanyou know what's going on now.
But he won't necessarilyimmediately have the votes to
(18:58):
make sweeping changes on the,you know, to align with exactly
what he's thinking.
You know NCUA in general tendsto be a little bit less
political than the averageagency.
I think you could argue theyare a little bit more
successfully independent thansome of the other independent
agencies.
I know there's many caveats tothat, but, um, they are, I would
(19:23):
say, out of those three,probably the least impacted by
the election, although certainlyvery much impacted okay, okay,
and you, you hinted at it.
Speaker 2 (19:34):
So you know, just for the sake of time, let's, let's
move on the fcra ruling.
What's happening with that?
Speaker 3 (19:42):
Yes, so there was a sweeping proposal that came out
a few weeks ago related to howyou use data and you know a
whole host of other issues underthe Fair Credit Reporting Act
that would certainly impactACUMA members.
Essentially, a whole anothergroup of use of the credit data
(20:10):
system would be considered CRAsand there would be new
compliance burdens that would betriggered once they are
considered CRAs.
Speaker 2 (20:22):
And when you say CRAs , you're referring to credit
reporting agencies.
Speaker 3 (20:24):
Credit reporting agencies yeah, sorry about that,
too many acronyms in thispodcast but just the use of
public data under this proposalwould be vastly different if it
went into effect.
And it's sweeping, sweeping andit's something that many
industries during thissub-briefer process provided
(20:46):
comments on and presented somereally serious concerns about.
The CFPB decided to put it outbefore the inauguration, even
though it's unlikely that thecomment period is due in March.
So it's probably unlikely to befinalized.
But it's something that I thinkindustry should take a look at
(21:09):
because you know one to yourfirst point on the podcast some
of these ideas may come backagain four years from now or
eight years from now at thefederal level and they'll
certainly come back even soonerthan that at the state level.
The CFPB just yesterdayreleased this whole packet of
(21:34):
information that they basicallysent to the states telling them
to go forth with the mission ofthe Biden administration CFPB,
and we certainly think that anumber of blue states are going
to be doing that.
So it's even some of theseproposals and final rules that
may, at the federal level, getput on pause.
(21:57):
They may very well pop up atthe state level or, you know,
become finalized at the statelevel very quickly.
So I would encourage peoplethat not to put these things
aside and not think about them,because some of them could have
a massive impact on the creditcredit union industry and maybe
(22:19):
back sooner or later.
Speaker 2 (22:21):
Okay, and just for the sake of clarity, the FCRA
rule you're really referring tothe data broker rule, right Data
?
Broker yes, Okay, okay, youknow it's interesting, right.
So, if I understood itcorrectly, it's the collection
of certain data points withinthe credit report and whether or
(22:43):
not we end up, or certain datapoints and whether or not we end
up becoming, as a credit union,credit reporting agencies.
Is that right?
Speaker 3 (22:54):
It could be in certain circumstances.
Speaker 2 (22:57):
That's interesting, that's absolutely crazy.
Speaker 3 (23:00):
It's insane.
Speaker 2 (23:04):
That's OK, it's insane.
That's okay, that's fascinating.
I I can see why there's so muchpushback from that.
Okay, um, before we we kind oftransition to the end any final
thoughts, anything else?
Speaker 3 (23:16):
um, I don't think so.
I mean, I think we we're goingto have a lot to talk about at
the next few ACUME meetings.
There's going to be a lot oftransition, I think, going into
next week.
I know some people aredisappointed about the election
results and you know we all haveour chance every two years and
(23:38):
I think we we should, just as amovement, um, we do a great job
of being bipartisan and thinkingabout the opportunities for
credit unions and no matter whatthe election outcome is and I
think, um, no matter what yourfeelings on the election itself
are, um, there are some reallygood opportunities for the
(23:59):
credit union system to roll backsome regulations that are
probably making it harder foryou to lend and harder for you
to have members, and there aresome good opportunities to get
some fresh set of eyes on thingsthat may have been problematic.
There's also, maybe, somechallenges in Congress there's I
(24:21):
know Zach previously talkedabout the concerns about the tax
exemption and how that could beat risk.
We actually saw today the Waysand Means Committee put out a
very, I would say, rough list ofideas of potential pay-fors for
(24:42):
the tax bill, and the creditunion tax status was on that
list.
That I'm not saying this is byany means a final list.
That is definitely going to bein the bill, but it is at this.
You know, seeing that listtoday, I know we all thought it
might be on the potential menuor on the table.
All thought it might be on thepotential menu or on the table.
(25:04):
It is officially on the menuand on the table, so there could
be some challenges associatedwith that on the Hill as well.
So a lot to do and a lot tofollow and just looking forward
to continuing to talk with youguys about it and hope everyone
stays warm over this very coldweekend and if you choose not to
watch inauguration?
(25:25):
um, find some good tv under ablanket with some hot chocolate
and watch something else.
And if you want to watchinauguration, um, hope everyone
enjoys I know, seriously, I meanhey, there's always football,
exactly yeah, always footballthere's always football, exactly
.
Speaker 2 (25:39):
Always football, there's always football.
The Ohio State.
I did that for Justin, allright.
Well, leah, as always, thankyou very much for your time.
Truly do appreciate it.
I guess we'll just close out.
Well, leah, as always, thankyou very much, and to all of you
, we know your time is valuable.
Thank you for tuning in to thelatest episode of Acuma's On
(26:00):
Point Podcast.
We hope you enjoyed it.
Speaker 1 (26:05):
Until next time be well, my friends.
Thanks for listening.
We'll see you next time at theAcuma On Point Podcast.
If not already, be sure tosubscribe and give us a
five-star rating.
For more great episodes andinformation.
Be sure to visit us online atacumaorg and to get the latest
updates, head over to ourLinkedIn page.
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