CUNA Regulatory Comment Call

November 30, 2006

EXECUTIVE SUMMARY

• The NCUA Board has published an interim final rule to implement three amendments to the Federal Credit Union Act made by the Reg Relief Act:
  
  (1) Appeal from an NCUA Board decision relating to any claim for insurance coverage
  
  NCUA’s regulations currently provide that an appeal from a final NCUA Board determination regarding share insurance coverage are to be reviewed by the U.S. Court of Appeals for the District of Columbia or the court of appeals for the federal circuit where the credit union’s principal place of business is located. The interim final rule revises the regulation to state that the appropriate venue for seeking such judicial review is the U.S. district court for the federal judicial district where the principal place of business of the credit union is located.
  
  (2) Expansion of enforcement authority
  
  Under the interim final rule, the NCUA Board may terminate the insured status of any insured credit union for violation of any condition imposed by the Board in connection with any action on any application, notice, or other request by the credit union or an institution-affiliated party. In addition, such violations can serve as the basis for cease and desist orders, removal and prohibition orders, and civil monetary penalties. Previously, such actions could only be taken upon a violation of conditions imposed in “the granting of any application or other request by the credit union”.
  
  (3) Clarification of suspension, prohibition and removal authority
  
  The interim final rule clarifies the NCUA Board’s authority to issue Orders of Suspension, Prohibition and Removal against institution-affiliated parties regardless of whether: (a) the subject of the Order remains affiliated with any credit union at the time the Order is considered or issued or (b) the credit union at which the individual was an institution-affiliated party at the time of the offense remains in existence at the time the Order is considered or issued.
• Although the interim final regulation is effective November 22, 2006, NCUA is accepting comments on the regulation. Comments are due to NCUA by January 22, 2007. Please send your comments to CUNA by January 5, 2007. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Deputy General Counsel Mary Dunn at mdunn@cuna.com or to Senior Regulatory Counsel Catherine Orr at corr@cuna.com; or mail them to Mary or Catherine in c/o CUNA's Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, 6th Floor - South Building, Washington, DC 20004. You may also contact us at 800-356-9655 ext. 6743 if you would like a copy of the interim final rule, or you may access it here.

1. Do you agree that the proper judicial venue for appeals from a final Board decision regarding share insurance coverage should be the appropriate U.S. District Court (a lower court than the appropriate U.S. Court of Appeals)? Yes No
   
   If no, why not?
   
   

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2. Do you have any concerns with respect to broadening the NCUA Board’s authority to take enforcement actions – including termination of insured status -- for violation of any condition imposed in any action on any application, notice, or other request by an institution-affiliated party? Yes No
   
   If yes, what are those concerns?
   
   

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3. Do you agree with the new modified provision clarifying that the NCUA Board has the authority to issue Orders against an individual who is an institution-affiliated party even if the individual is no longer affiliated with any credit union at the time the Board considers or issues the Order? Yes No
   
   Please explain.
   
   

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4. Other comments?
   
   

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