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NCUA’s Top 10!

With so much attention on the CFPB these days, I thought I would take this opportunity to update you on what I think is NCUA’s top 10 list (at least for the moment).

10.  Interest Rate Risk Final Rule – This was effective September 30, 2012.  This new rule revises NCUA rules and regulations section 741.3(b) and institutes a written interest rate risk (IRR) policy and an interest rate risk management program as a requirement for insurance.   The requirements for this rule are based on your assets and your balance sheet structure.

9. Letter to Credit Unions 12-CU-11 – If you are still wondering about the new Interest Rate Risk rule above then look no further than the Letter to Credit Unions 12-CU-11 issued in August 2012.   This letter is a must read if you are still trying to fully understand the rule and the expectations of the regulator.

8.  Loan Workouts and Nonaccrual Policy and Regulatory Reporting of Troubled Debt Restructured Loans Final Rule – This was effective October 1, 2012.  The intent of this rule is to allow federally insured credit unions (FISCU’s) to better serve their members experiencing financial difficulties while reducing the reporting burdens.  Credit Unions must adopt and implement a written loan workout and a written non-accrual policy.  NCUA hosted a free webinar, “Loan Workouts, Loan Nonaccrual and Regulatory Reporting of Troubled Debt Restructuring” in September.  The archived version is available on NCUA’s website under News.

7. Regulatory Flexibility (RegFlex) Program Final Rule – Back in 2001, NCUA implemented RegFlex to relieve federal credit unions who demonstrated strong net worth and CAMEL performance from certain regulatory restrictions.  In the spirit of reducing regulatory burdens, NCUA eliminated RegFlex effective July 2, 2012. The result is regulatory relief to most Federal Credit Unions not just those with a RegFlex designation.

6. Maintaining Access to Emergency Liquidity Proposed Rule – This proposed rule was released in July and amends NCUA rules and regulations section 741 relating to Contingency Funding Plan.  This proposal is in response to the recent financial crisis in the Corporate Credit Union system and the announced closure of U.S. Central Bridge Corporate Federal Credit Union.   NCUA is proposing a tiered structure based on a credit union’s asset size for Contingency Funding Plan (CFP) policies, strategies and emergency liquidity access.

5. Letter to Credit Unions 12-CU-10 & Central Liquidity Facility (CLF) webinar – If you want to learn more about the proposed emergency liquidity rule above, NCUA also issued Letter 12-CU-10.   The letter includes a great FAQ on understanding NCUA’s Central Liquidity Facility (CLF), which provides emergency liquidity services to its member credit unions.  NCUA also hosted a free webinar, “CLF and your Credit Unions Contingent Liquidity” in August.  The archived version is available on NCUA’s website under News.

4. Loan Participation Proposed Rule – Back in December 2011, NCUA issued a proposed rule to amend its loan participation regulation.  The amendments apply to all FISCU’s.  NCUA Chairman, Debbie Matz went on record in June 2012 that final action on this rule is postponed several months. She noted a concern for protecting credit union safety and soundness while imposing the least burden possible.

3. CUSO Proposed Rule – In July 2011 NCUA issued a proposal to amend its CUSO rules, expanding the requirements to cover FISCU’s as well as incorporate new requirements for CUSO’s to file financial reports directly with the NCUA and State Supervisory Authorities.  This proposed rule received a lot of attention and concern over NCUA’s statutory authority. The NCUA Board was scheduled to take action on this rule in June but the proposal was pulled and the Board meeting cancelled.  NCUA Chairman, Debbie Matz has stated that just like the Participation Rule, the CUSO rule is postponed for several months.

2. 2012 Corporate Stabilization Fund Assessment – On July 24, 2012, the NCUA Board approved the Temporary Corporate Credit Union Stabilization Fund assessment of .0095 percent.  This is based on your credit unions insured shares as of June 30, 2012.  The assessment is due today, October 9, 2012.

1. Letters to Federal Credit Unions 12-FCU-02 MFOEL letter – If you are a federal credit union using multi-featured open-end lending plans then you definitely should read this letter that was released in July.  It supersedes and replaces NCUA’s previous guidance on MFOEL issued in 2010 and addresses the hybrid products, known as Multi-Featured Lending plans.  If you utilize a hybrid product then NCUA’s Legal Opinion Letter, 11-0620 published in August is also a must read.

Now that you have a high level of what’s going on at NCUA you might want to get back to the CFPB, I hear they have a top 100.

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