A Year in WBA Comment Letters

The WBA Legal Team was particularly busy this fiscal year. Attorneys Heather MacKinnon, Scott Birrenkott, and President/CEO Rose Oswald Poels wrote 27 comment letters in response to federal agencies’ requests for comment on rulemaking affecting the banking industry, significantly more than last year’s 16 letters. 

The Process

Congress delegates authority to federal agencies to develop regulations (or rules). Part of the rulemaking process within the Administrative Procedure Act requires that the public receive opportunity to comment on proposed rules for a prescribed period (minimally 30 days). Agencies then use those comments to determine how, or whether, to proceed.

WBA monitors rulemaking developments at the federal level and compiles that information in the monthly WBA Compliance Journal. You will find descriptions of proposed rules, public comment deadlines, and key information to track the rule in the Federal Register (https://www.federalregister.gov).

The WBA Legal Team is always on the lookout for issues that merit comment and, because it’s important that the agencies hear directly from the industry, encourages members to compose a letter of their own, or use a template created by WBA when available. Filing the letter is a simple process outlined in a tip sheet which can be found here.

To find detailed FAQs on the process, visit https://www.regulations.gov/faq.

Why Comment Letters Matter and Where to Find Them

Comment letters are an excellent opportunity for the banking industry to inform the federal agencies about the impact of rulemaking, and provide examples.

It is crucial that WBA represent the best interests of members at the federal level, whether that means pointing out potentially onerous, unfair, or burdensome rules, suggesting tweaks or improvements, or expressing satisfaction when positive changes are implemented. The goal is to advocate on behalf of members by conveying information in an impactful, yet concise manner.

Information about comment letters is typically shared in the Wisconsin Banker Daily soon after filing, with a brief summary, including a link to the letter. Reading the letters, or the synopses, can help you stay abreast of important issues and engage in WBA’s advocacy efforts on the always evolving regulations your bank faces.

Below, you will find some of the topics addressed in comment letters filed between June 2020 – May 2021.

7 Comment Letters Filed With CFPB

Over the past year, WBA filed seven comments with the Consumer Financial Protection Bureau (CFPB). CFPB was active in a variety of areas including COVID-19 matters and adjusting certain Regulation Z provisions to prepare for the LIBOR transition. CFPB also undertook a series to rules related to its Ability to Repay and Qualified Mortgage (ATR/QM) rules. CFPB took actions to extend the temporary QM category, revise the General QM definition, and create an entirely new category of QM known as a seasoned QM. WBA commented on all aspects of this process, providing valuable industry perspectives shared by the membership.

5 Comment Letters Filed With FRB

One of WBA’s five comment letters to the Board of Governors of the Federal Reserve System (FRB) supported the deletion of the six-transfer limit from the definition of “savings deposit.” The deletion reflected a shift in FRB’s monetary policy, and eases outdated consumer burden while permitting flexibility for banks to administer accounts as appropriate.

3 Comment Letters Filed With OCC

WBA filed three letters with the Office of the Comptroller of the Currency (OCC), one of which related to a proposal regarding the new CRA performance standards. The letter recognized Wisconsin banks’ commitment to meeting the needs of LMI communities, but highlighted some of the burdens presented by implementation costs with the new CRA rules. WBA also urged all three banking agencies (OCC, FDIC, and FRB) to develop a CRA rule on an interagency basis.

3 Comment Letters Filed With FDIC

In one of three letters filed with the Federal Deposit Insurance (FDIC), WBA commented on the agency’s proposal to modernize its brokered deposit rules. WBA recognized the effort as a step in the right direction, but joined the other trades in pointing out that broad definitions of “facilitation” and “deposit broker” would improperly increase the scope of deposits classified as brokered. WBA supplied more precise definitions and urged FDIC to provide examples of persons not considered deposit brokers.

2 Comment Letters Filed With FinCen

WBA wrote two letters to the Financial Crimes Enforcement Network (FinCEN), one of which addressed an advanced notice of proposed rulemaking to existing customer due diligence (CDD) requirements. The letter identified various aspects of the CDD rule which remain unclear, and recommendations for clarifications.

3 Comment Letters Filed With NCUA

WBA vigilantly monitored proposals from the National Credit Union Administration (NCUA) and filed three letters. In early 2021, WBA opposed a proposed rule that sought to expand the field of membership for multiple common bond credit unions. Recently, WBA also commented that NCUA should withdraw its proposal to allow credit union service organizations to engage in broader lending and investments.

4 Comment Letters Filed With Interagency

Some rulemakings are issued on an interagency basis. In one example, the FRB, FDIC, and OCC proposed to allow deferral of obtaining appraisals, to which WBA expressed appreciation of the agencies’ proactive efforts, but cautioned against too narrowly defining certain terms. WBA filed four interagency letters total.

As discussed above, industry comment is a critical aspect to the rulemaking process. It is an opportunity for the industry’s voice to be heard, and it is important that the agencies hear from banks about how rulemaking affects you. WBA welcomes your feedback on comment letters because it is key that we, and the agencies, hear directly from members. For more information on the rulemaking process, comments, and upcoming rules, contact the WBA Legal Department at wbalegal@ wisbank.com. For a full list of the comment letters filed during the 2020-21 fiscal year, visit www.wisbank.com/commentlibrary.

By, Alex Paniagua