November 30, 2006
Share Insurance Appeals and NCUA Enforcement Authority
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.
QUESTIONS REGARDING THE INTERIM FINAL RULE
- 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?
- 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?
- 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.
- Other comments?
Eric Richard EVP &General Counsel (202) 508-6742 erichard@cuna.com
Mary Mitchell Dunn SVP & Deputy General Counsel (202) 508-6736 mdunn@cuna.com
Jeffrey Bloch Senior Assistant General Counsel (202) 508-6732 jbloch@cuna.com
Lilly Thomas Assistant General Counsel (202) 508-6733 lthomas@cuna.com
Catherine Orr Senior Regulatory Counsel (202) 508-6743 corr@cuna.com
|
Copyright © 2009 - Credit Union National Association, Inc.
|