Links in “NCUA”

NCUA has issued a legal opinion letter that states that current NCUA regulations require federally insured credit unions to obtain fidelity bond coverage under an individual policy. This means that a credit union may not add one or more CUSOs it owns as additional insureds. [4/16]

Ever wondered about the strategy behind the rulemaking process at NCUA? Haven’t we all! This article takes a behind-the-scenes look at the decisioning process with comments from current and former board members Debbie Matz, Dennis Dollar and David Chatfield. [4/15]

ABA writes NCUA about Quorum FCU's Select Savers Club, an online membership application for the express purpose of qualifying otherwise ineligible individuals. ABA vows to notify NCUA of other credit unions circumventing membership requirements. [4/11]

In an effort to clarify a statement he made during a recent Congressional hearing, NCUA General Counsel, Mike McKenna, has issued a letter to the committee chair that explains that while the proposed RBC rule addresses the use of supplemental capital for low-income credit unions, it does not and cannot address the issue of supplemental capital for other credit unions. McKenna explained that the Federal Credit Union limits the use of supplemental capital or secondary capital to only low-income designated credit unions and that Congress would need to amend the Act to authorize NCUA to expand the use of supplemental capital to all credit unions. McKenna added that NCUA supports a legislative change. [4/10]

NCUA has issued Supervisory Letter No. 14.04 to provide guidance to examiners regarding taxi medallion loans. Credit unions that either extend loans of this type and credit unions that purchase participation interests in taxi medallion loans should review this letter in order to be prepared for the extent of the review your examiners will conduct as a result of heightened concerns regarding the risks they feel these loans may represent. [4/10]

It turned out to be a long day for NCUA General Counsel, Mike McKenna, who was grilled by the members of the House Financial Services Committee over why the agency’s proposed risk-based capital rule’s risk weights are higher than those set by the FDIC when credit unions have lower delinquency rates than banks.  McKenna responded that NCUA believes their proposed risk weightings are equivalent to those used by the FDIC given the unique nature of credit unions and other factors. [4/9]

In testimony before the Financial Services Committee yesterday, NCUA Attorney General, Mike McKenna, stated that majority of the rules adopted by the agency in 2013 provided regulatory relief to credit unions. Both CUNA and NAFCU disagree, stating that it’s not the number of the rules that’s relevant, but the impact of those rules that is the important consideration. [4/9]

NCUA General Counsel McKenna told congress that since January 1, 2013, 70% of new regulations have actually reduced the regulatory burden or provided regulatory clarity for credit unions with no new compliance costs involved. [4/9]

CUNA has asked Congress to conduct a thorough review of NCUA’s proposed Risk Based Capital Rule and to direct the agency to fix what CUNA sees as significant deficiencies in the rule as currently drafted.  Specifically, CUNA notes that:

• The rule is fundamentally flawed due to poorly calibrated risk weightings;
• The rule would significantly adversely affect credit unions’ ability to offer mortgage loans and small business loans; and
• The 18-month implementation period is unreasonably short. [4/7]

NCUA has chartered a new community-based credit union for the residents of Greenville County, SC. Community Works Federal Credit Union will serve a low-income area with a potential of 475,000 members. [4/4]