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

Open Banking To Hit $94B By 2029—But U.S. Lags Amid Global Surge

Watch our Video on Understanding Open Banking NEW YORK—By 2029, open banking is projected to surge globally to a staggering $94.14 billion in value. Yet despite its rapid evolution and expanding global footprint, adoption remains uneven—hindered by inconsistent regulatory frameworks across countries. According to GlobalData, this disparity poses a key challenge for the sector’s success, with the U.S. notably trailing behind global peers in embracing open banking. The U.K. pioneered open banking and continues to be one of the leaders globally. The country has seen the number of users increasing, with there being 12.09 million active users of open banking in 2024 and 223.9 million payments made. This is an increase of 72% compared to the year before. “As open banking continues to flourish, it is positive to see that the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) have outlined how open banking can expand further in the U.K., and also be used in variable...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - What is the Declaration of Independence?

What is the Declaration of Independence ? The Declaration of Independence is the founding document that formally announced the American colonies' break from British rule. It laid the philosophical and moral foundation for American democracy, asserting that individuals possess inherent rights and that governments must be accountable to the people ( read summary here ). Although Thomas Jefferson is often remembered as the sole author ( read initial draft ), extensive collaboration shaped the Declaration. Benjamin Franklin and John Adams made small but impactful revisions— including Franklin’s reported suggestion  to change “We hold these truths to be sacred and undeniable” to “self-evident”—before submitting the draft to Congress. On July 4, 1776, the final text was adopted and sent to printer John Dunlap, who produced an estimated 200 broadsides that night—but that wasn’t the actual day of American independence . Congress had voted for independence two days earlier, ...
Post a Comment
Read Complete Article HERE>»

Why Avoiding "I" in Marketing Presentations Matters

  Grant Sheehan, CCUE | CCUP | CEO NCOFCU  You know how things just stick with you? Well, many years ago, my marketing professor started off his class with the following, and it has never left me.  The Power of Perspective: Why Avoiding "I" in Marketing Presentations Matters In the world of marketing, effective communication is paramount. One valuable piece of advice that often comes from experienced instructors and industry veterans is the importance of avoiding the use of the word “I” in presentations and reports. At first glance, this may seem counterintuitive; after all, many individuals feel that personal anecdotes and experiences can enhance a message. However, upon deeper reflection, the reasoning behind this approach reveals itself as essential for achieving impactful communication. Building Objectivity When marketing professionals present their findings or insights, it’s important to establish credibility. Utilizing data, surveys, and feedback from cu...
Post a Comment
Read Complete Article HERE>»

👨‍👩‍👧‍👦 You Need to Prepare Now to Compete for New Fed Gov’t Funded Savings Accounts for Children

WASHINGTON–Credit unions, which often talk about the need for younger members, will now have the opportunity to compete in a new arena for the youngest members of all, as the recently passed reconciliation bill includes language creating and funding for a new savings account for children, with a one-time deposit of $1,000 from the federal government for those born in 2025 through 2028. The new accounts are expected to create a new battleground of competition for credit unions as every provider from banks to fintechs to others seeks to capture the accounts.  The final version of the bill makes the tax-free savings accounts for minors, called Trump accounts, a form of individual retirement account (IRA) under Sec. 408(a), according to the Journal of Accountancy. Under the legislation, the accounts will be IRAs (but not Roth IRAs) for the exclusive benefit of individuals under 18.  About the Contributions “Contributions can only be made in calendar years before the beneficia...
Post a Comment
Read Complete Article HERE>»

Agencies Issue Exemption Order To Customer Identification Program (CIP) Requirements

WASHINGTON--The Federal Deposit Insurance Corporation, the Office of Comptroller of the Currency, and NCUA, with the concurrence of the Financial Crimes Enforcement Network, issued an order Friday granting an exemption from a requirement of the Customer Identification Program (CIP) Rule implementing Section 326 of the USA PATRIOT Act. The CIP Rule requires a bank or credit union to obtain taxpayer identification number (TIN) information from its customer before opening an account, and the exemption permits a bank or credit union to use an alternative collection method to obtain TIN information from a third-party rather than from the customer, the agencies stated in a joint release. The order applies to accounts at all entities supervised by the agencies. "Since the CIP Rule was issued initially in 2003, there has been a significant evolution in the ways consumers access financial services, along with a rise in reported customer reluctance to provide their full TIN due, in part, to...
Post a Comment
Read Complete Article HERE>»