ALEXANDRIA, Va.–Today is the deadline to comment on three proposals that are part of NCUA’s Deregulation Project, including a plan that makes it easier to convert a credit union into a bank.
The proposals with comment deadlines today include:
Conversion of Insured Credit Unions to Mutual Savings Banks
NPRM Summary: NCUA said the board is proposing to amend its regulations governing the conversion of insured credit unions into banks. The NCUA Board proposes to eliminate certain prescriptive procedural, disclosure, and communication requirements. This action reduces unnecessary regulatory burdens and provides credit union boards of directors with greater flexibility to exercise their business judgment. The intended effect of these changes is to simplify compliance for credit unions, reduce administrative costs, and modernize the conversion process, while ensuring members receive clear and effective disclosures, the agency said.
Simplified Summary: “The Board proposes to amend its regulations related to conversion of insured credit unions into mutual savings banks. This proposal would eliminate certain prescriptive procedural, disclosure, and communication requirements,” NCUA said. “At present, the regulations governing the conversion process are outdated and overly burdensome. Additionally, the regulations currently include items that are guidance, which may be confusing. NCUA is proposing to simplify compliance and clarify guidance by removing these provisions and relocating guidance to elsewhere on NCUA.gov.”
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Organization and Operation of Federal Credit Unions
NPRM Summary: The NCUA Board proposes to rescind its Interpretative Ruling and Policy Statement 06-1 (IRPS 06-1). Rescinding IRPS 06-1 would ease the compliance burden on Federal credit unions (FCUs) by limiting the number of sources that FCUs must check to ensure compliance with applicable chartering and field of membership (FOM) requirements.
Simplified Summary: “The NCUA Board proposes to rescind its Interpretative Ruling and Policy Statement 06-1 (IRPS 06-1) to limit the number of sources an FCUs must check to ensure compliance with applicable chartering and field of membership (FOM) requirements,” the agency said. “IRPS 06-1 shares similar information about FOM policies and procedures as the Chartering Manual. By rescinding IRPS 06-1, NCUA is eliminating duplicative information that may be confusing or increase compliance burden.”
Mergers of Insured Credit Unions into Other Credit Unions; Voluntary Termination or Conversion of Insured Status
NPRM Summary: The NCUA Board proposes to amend its regulations governing the voluntary termination of federal share insurance to streamline member communication requirements. “This action is necessary to reduce regulatory burden by eliminating overly prescriptive formatting rules for the mandatory disclosure statement that credit unions must provide to members,” NCUA stated. “The intended effect is to simplify compliance and provide credit unions with greater flexibility in designing effective communications, while still ensuring that members receive clear and prominent notice of a proposed termination of federal insurance.”
Simplified Summary: “The NCUA Board proposes to amend its regulations to streamline member communication requirements with regards to proposed mergers or voluntary termination of federal share insurance,” according to the agency. “Currently, credit unions must notify members about an upcoming vote on a proposed merger or a credit union’s intentions to terminate its federal share insurance. This proposal would retain the requirement to notify members about the loss of federal insurance coverage for deposits but would remove overly prescriptive formatting requirements for how that notification is conducted. The proposal would also eliminate the requirement for NCUA to post member comments regarding proposed mergers.”
