Regulation

The Supreme Court ruled the Consumer Financial Protection Bureau's leadership structure is unconstitutional and refused to hear a lawsuit over the NCUA's field of membership rule. Credit unions are watching to see what happens now.

In a split 5-4 decision, the justices gave presidents new power to remove the agency's head at will. The ruling could have far-reaching implications for other regulators with single directors.

While they are not dramatically opposed, Jelena McWilliams and Brian Brooks have articulated their own ideas on postal banking and the use of artificial intelligence in lending.

Some observers said the central bank should have suspended dividends entirely in response to an unprecedented economic emergency caused by the pandemic. Others said its more cautious moves were appropriate because big banks' capital is strong and the economy could bounce back.

The Fed stopped short of banning payouts entirely following bank stress tests; banks get greater freedom to invest in venture capital funds and reduced collateral on swap trades.

Nearly 900 institutions are set to receive a payout related to the demise of Southwest Corporate FCU, but the agency could ultimately return as much as $2.5 billion tied to the corporate credit union failures of 2009 and 2010.

In the most sweeping capital distribution order since the financial crisis, the Federal Reserve says it will prohibit big banks from buying back their stock in the third quarter and limit dividend payments to second-quarter levels.

Five financial regulatory agencies clarified the meaning of "covered funds" under the Volcker Rule. Meanwhile, the FDIC gave certain banks more flexibility in interaffiliate exchanges of swaps and adopted a workaround of a court decision governing interest rates on loans sold across state lines.

With just 13 decisions remaining on the docket this session, the high court's highly anticipated ruling in a case challenging the agency's leadership structure could come as early as next Monday.

Borrower relief is necessary in a national emergency, but if the exclusion of the deferred loans from troubled-debt restructurings is extended past the end of the year, safety and soundness could be compromised.