Skip to main content

NCUA July Board Meeting; NCUA Letters to Federal Credit Unions

Written By Michael Coleman, Regulatory Compliance Counsel
NCUA Board Meeting. The NCUA Board Meeting on Tuesday July 24, 2012, had a very busy agenda, and the Board unanimously approved 5 items:
  • Setting the 2012 Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) assessment at 9.5 basis points of insured shares as of June 30.
  • Reprogramming NCUA’s 2012 operating budget to produce a $2 million savings to credit unions that will offset the 2013 operating budget.
  • Renewing the current 18 percent interest rate cap for most loans, and 28 percent for short-term small loans, at federally chartered credit unions through March 10, 2014.
  • Releasing a proposed rule—with a three-tiered approach targeted by asset size—for federally insured credit unions to plan for or maintain access to emergency liquidity.
  • Issuing a proposed rule to permit NCUA to declare a federally insured, state-chartered credit union (FISCU) in “troubled condition” based on NCUA’s CAMEL code 4 or 5 composite rating.
NCUA released the Board Meeting results in a Board Action Bulletin.  It provides a good summary of these recent actions, including a summary of the Board’s decision to set the 2012 Stabilization Fund assessment at 9.5 basis points. NCUA had previously estimated that the 2012 Stabilization Fund assessment would be between 8-11 basis points.  The Bulletin also provides summaries of the proposed rule on emergency liquidity and the proposed rule to permit NCUA to declare a FISCU in “troubled condition,” it is worth a read.
The Board’s extension of the 18 percent interest rate cap based on current market conditions is surely of interest to many credit unions. NCUA reported in the Bulletin that approximately 61 percent of federal credit unions made some loans at rates above 15 percent (which is the Federal Credit Union Act mandated interest rate cap) in the first quarter of 2012. The NCUA Board has the authority to set the interest rate higher than the FCUA statutory usury ceiling pursuant to FCU Act § 1757(5)(vi)(I), and pursuant to NCUA Regulation § 701.21(c)(7)(ii) the NCUA Board must make this determination every 18 months.
NAFCU Today has more details on the Stabilization Fund assessment here, and more details on the 18 percent interest rate cap and NCUA budget adjustment here.
****
NCUA Letters to Federal Credit Unions. Last week NCUA released two Letters to Federal Credit Unions that are worthy of note. NCUA released NCUA Letter to Federal Credit Unions 12-FCU-02 concerning Multi-Featured Open-End Lending (MFOEL) which supersedes and replaces NCUA Letter to Federal Credit Unions 10-FCU-02, which contained NCUA’s previous guidance on the subject. The new guidance contained in 12-FCU-02 is worth a read. NCUA also released NCUA Letter to Federal Credit Unions 12-FCU-03 which highlights changes in the examination procedures of small credit unions. 12-FCU-03 states that NCUA is implementing a Small Credit Union Examination Program (SCUEP) in order to streamline the examination process for small credit unions. Regarding eligibility, 12-FCU-03 states: “The SCUEP is targeted to FCUs with total assets less than $10 million and a CAMEL rating of 1, 2 or 3.” If your credit union might be eligible, it is worth a look.
NCUA July Board Meeting; NCUA Letters to Federal Credit Unions:  

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

The Skills Board Chairs Need Now: Leading Through Complexity, Not Control

NCOFCU Podcast   Grant Sheehan CCUE | CCUP | CEO-NCOFCU The role of the board chair has quietly—but fundamentally—changed. A decade ago, success was defined by experience, authority, and strategic judgment. Today, those traits are still relevant—but no longer sufficient. The modern board chair operates in a world shaped by competing stakeholder demands, technological disruption, geopolitical uncertainty, and increasing scrutiny. What emerges is a role that is less about control—and more about navigating complexity. Below are the core capabilities that now define effective board leadership. 1. From Authority to Orchestration The most important shift is conceptual. Board chairs are no longer expected to be the smartest voice in the room. Instead, they are expected to make the room smarter . This requires the ability to: Synthesize large volumes of information Reconcile conflicting perspectives Facilitate high-quality dialogue Traditional strengths like executive experience matter les...
Post a Comment
Read Complete Article HERE>»

It All Starts in the Boardroom

It all starts in the boardroom—but the consequences are felt far beyond it. When Governance Breaks Down, Members Pay the Price Credit unions are built on a simple but powerful idea: they are owned by their members. Unlike traditional banks, where shareholders drive decisions, credit unions are meant to operate democratically—guided by a volunteer board elected by the very people they serve. But that model only works when participation exists. A governance breakdown happens when the people elected to oversee an institution stop truly representing the people who own it. In credit unions, this breakdown doesn’t usually come from scandal or sudden failure. It happens quietly, over time—through disengagement. The Root of the Problem: Low Engagement Most credit union members don’t vote. Board election turnout is typically in the low single digits. In some cases, it’s barely measurable. That means a very small percentage of the membership is effectively deciding who governs an institution th...
Post a Comment
Read Complete Article HERE>»

On Stablecoins, NCUA Has Opportunity to Strike Right Balance and Get it Right

By Grant Sheehan As digital payments continue to evolve, the National Credit Union Administration’s (NCUA) efforts to establish a regulatory framework for stablecoins mark an important step forward. For credit unions, especially those serving mission-driven communities like firefighters and first responders, access to emerging financial technologies is not just an opportunity but a necessity to remain competitive and relevant. The  National Council of Firefighter Credit Unions  (NCOFCU) appreciates the  thoughtful input  provided by both America’s Credit Unions and the Defense Credit Union Council (DCUC) on the NCUA’s proposed stablecoin framework. We find strong merit in the recommendations of both organizations and believe their combined perspectives offer a constructive roadmap for getting this right. Important First Phase, But… At its core, the proposal represents an important first phase in implementing the stablecoin provisions of the GENIUS Act. Establishing a...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - Why the IRS is necessary

  'Taxman'   Why the IRS is necessary The Internal Revenue Service, or IRS, is a division of the US Treasury Department created in 1862   that enforces the Internal Revenue Code —Title 26 of the US Code, a compilation of federal statutes—and, effectively, oversees tax collection. In 2024, the IRS's roughly 75,000 employees collected roughly $5T in tax revenue.   Given its role in diverting household income streams, it also has a bad reputation. Half of Americans had an "unfavorable view" of the IRS as of 2024 ( see data ). In a ranking of 16 well-known federal agencies by popularity that year, t...
Post a Comment
Read Complete Article HERE>»

It's Financial Literacy Month

April is Financial Literacy Month—a time dedicated to empowering individuals and families with the knowledge and tools needed to make informed financial decisions. Whether you're budgeting, saving, managing debt, or planning for the future, improving your financial literacy can have a lasting impact on your well-being. We invite you to explore our Consumer Education website, where you'll find helpful resources, tips, and guidance to support your financial journey. If you find it valuable, please share it with your family and friends—because financial knowledge is even more powerful when it’s shared. https://www.ncofcu.org/financial-literacy  ================================================= Remember, you're not alone with  NCOFCU.org Join/Upgrade Check out some of NCOFCU's additional features: Annual Conference First Responder Credit Union Academy Financial Literacy Podcasts YouTube Mini's Advocacy  
Post a Comment
Read Complete Article HERE>»

Growing Use of Stablecoins Could Reshape How FIs Manage Liquidity, Allocate Assets, NY Fed Report Suggests

NEW YORK — The growing use of stablecoins tied to the U.S. dollar could reshape how banks manage liquidity and allocate assets, potentially leading institutions that support the digital tokens to hold more reserves and make fewer loans, according to a new study from the  Federal Reserve Bank of New York . The paper, titled “ Stablecoin Disintermediation ,” was authored by economists Michael Junho Lee and Donny Tou and examines how stablecoin activity affects the balance sheets and liquidity management of banks that partner with stablecoin issuers. The researchers found that while stablecoins rely on traditional banks to function, the relationships can alter the liquidity demands placed on those institutions. Banks serving stablecoin issuers tend to hold larger reserve balances and reduce the share of assets devoted to lending, shifting toward a more reserve-heavy banking model. Focus of Study The study focused on developments following the March 2023 collapse of...
Post a Comment
Read Complete Article HERE>»

The Federal Open Market Committee Up's Rates

WASHINGTON–As expected the Federal Open Market Committee at its meeting today moved to increase rates by a quarter-point to a range of 1.25% to 1.50%. In a statement accompanying the announcement, the Federal Reserve said data from November indicate the labor market has continued to strengthen and that economic activity has been rising at a solid rate. “Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further,” the Fed said. “Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2%. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.” The Committee said it continues to expect that, with gradual...
Post a Comment
Read Complete Article HERE>»

Why is NCUA Overlooking the Biggest Fee of All?

By Frank J. Diekmann NCUA has made a priority out of the F word in 2024—fees--announcing a special focus on NSF and OD fees this year.  And yet the agency seems to have little interest in the biggest and most egregious fee of all—the “merger” fee that comes when net worth isn’t returned to the people whose money it is in the first place, and it instead goes to insiders—often in amounts a multitude larger than any bounced check fee. It's sadly ironic that NCUA seems bothered by fees members opt into, but not by a merger fee they don’t seem able to opt out of. The merger fee is a hidden-in-plain-sight cost to members that is so brazen and increasingly occurring it has entered that dangerous territory of almost being taken for granted, wi...
Post a Comment
Read Complete Article HERE>»

Preparing Credit Unions for a Transformative Decade Ahead

CUs must meet their current members' needs, anticipate their future needs and seek out a new generation. By Pam Cohen | June 03, 2024 at 09:00 AM Credit/AdobeStock As we navigate through an era of rapid change and economic uncertainty, credit unions stand at a critical juncture. The future beckons with both challenges and unprecedented opportunities, but by embracing innovation and focusing on member-focused services, credit unions can remain relevant and impactful in a space where consumers are quick to embrace brands with the most marketing dollars. As an industry we need to take a look at our current members, meet their needs, anticipate their future needs and seek out a new generation of members. As we look to the needs of members in the next decade, the success of credit unions hinges on the ability to merge technological advancements with personalized service. You don't need me to tell you that members want ...
Post a Comment
Read Complete Article HERE>»

Where are your children banking?

  Grant Sheehan CCUE | CCUP | CEO, NCOFCU The B reach  Between Purpose and Experience Just recently, I came across a story that has stayed with me. It wasn’t dramatic in the traditional sense. There was no scandal, no crisis, no headline-grabbing failure. In fact, it was something much quieter than that. It was simply the story of an eighteen-year-old leaving his credit union. On the surface, that might not sound remarkable. Young people move their money frequently. They open new accounts, experiment with apps, follow trends, and often make financial decisions influenced by the digital tools at their disposal. But this story was different. This young man had been a credit union member since he was a few weeks old, as many credit unions do. His mother has spent her career working inside the credit union movement as an executive. For eighteen years, his financial life was connected to a credit union. If anyone might be expected to remain a lifelong member, it wou...
Post a Comment
Read Complete Article HERE>»