ALEXANDRIA, Va.― The National Credit Union Administration has announced the fourth round of proposed regulatory changes associated with its Deregulation Project. The new proposal brings to 16 the number of such changes NCUA has proposed to date.
The project is an ongoing review of NCUA’s regulations to ensure regulations are focused on credit unions’ safety, soundness, and resilience, the agency said. It is now seeking requesting comments on the latest four proposals it said are meant to clarify agency guidance or eliminate unduly burdensome or duplicative requirements in the Code of Federal Regulations.
The first dozen proposals have been compiled by the CU Daily here.
The Four Proposals
Changes for Public Unit and Non-Member Shares – 12 CFR 701.32(b)(2)
“The Board proposes to remove the provision requiring a credit union board to develop a written plan on the intended use of public unit and nonmember shares if those funds, along with any borrowings, would exceed 70% of paid-in unimpaired capital and surplus,” NCUA said.
The Impact: “The change would give federally Insured credit union (FICU) boards the option of developing their own policies for managing public unit and non-member shares within existing aggregate limits, allowing credit union boards to manage their funding sources and reliance on these funds with greater flexibility,” NCUA said.
For info, go here.
Notice of Termination of Excess Insurance Coverage – 12 CFR 741.5
“The Board proposes to eliminate 12 CFR 741.5 which requires a FICU with share insurance coverage that supplements the coverage provided by the National Credit Union Share Insurance fund to give its members a 30-day notification if it plans to end its supplemental coverage,” the agency stated.
The Impact: “This change would only require a credit union to notify its members if it terminates previously held supplemental share insurance coverage,” the agency said. “The specific 30 day time-frame for notification would no longer be required.”
For info, go here.
Maximum Borrowing Authority – 12 CFR 741.2
“The Board proposes to remove the maximum borrowing authority from the NCUA’s regulations that establish the requirements for obtaining and maintaining federal share insurance with the Share Insurance Fund,” NCUA said. “This provision applies to all FICUs.”
The Impact: “This change would eliminate the borrowing limit that currently applies to federally insured state charted credit unions (FISCUs),” according to the agency. “FISCUs would be subject to any applicable state law requirement. The statutory limit on federal credit union (FCU) borrowing would still apply.”
For info, go here.
Disclosure of Share Insurance – 12 CFR 741.10
“The Board proposes to eliminate 12 CFR 741.10,” NCUA said. “Under the current regulation, all FISCUs that are permitted by state law to accept non-member shares or deposits must identify such accounts on all required reports and notify all non-member account holders in writing that their accounts are not insured by the Share Insurance Fund. The Board is proposing to remove this section because duplicative of the disclosures FISCUs are already required to make as part of their agreement for maintaining federal share insurance.”
The Impact: “This proposed removal would eliminate an unnecessary and redundant requirement,” NCUA said.
For info, go here.
