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CUNA staff attended yesterday's NCUA October Board Meeting. During the meeting, the NCUA adopted final rules for two rules impacting appeals procedures and appeal and composition of the supervisory review committee. The NCUA Board also approved a proposed stress testing rule that would reduce the burden on credit unions subject to the current requirements. Lastly, the Board approved a request for information (RFI) for updates to data collection practices for loan, deposit and investment information.
The next Board Meeting is scheduled for 10:00 AM on November 16th at the NCUA's headquarters in Alexandria, VA.
Share Insurance Fund Quarterly Report. The Board received its quarterly briefing on the condition of the NCUSIF as of September 30. The NCUSIF’s ending reserve balance stands at $208.2 million and its equity ratio is now 1.25%. The number of CAMEL Code 4 or 5 credit unions is currently 204, a decrease of 6 from last quarter. CAMEL Code 3 credit unions decreased slightly to 1,086 at quarter’s end. The number of credit union failures so far this year is 4.
Request for Information, Electronic Loan, Deposit, and Investment Data Collection. The NCUA Board approval to publish in the Federal Register a Request for Information (RFI) on standardizing the loan, deposit, and investment information collected electronically during examinations. NCUA is seeking input on plans to adopt a new standardized data format for loan, deposit, and investment data. The overarching goal of the comprehensive review is to modernize, formalize, and standardize data formats collected during examinations from the core data processing and offline systems used by credit unions. The agency states that this should make examinations more efficient for credit unions and the agency. The RFI seeks input on new data fields for credit cards, mortgages, and student loans as well.
Proposed Rule, Part 702, Capital Planning and Supervisory Stress Testing. The NCUA is proposing to make changes to their capital planning and stress testing requirements. The goal is to make the process more efficient for covered credit unions and the NCUA by, among other things, authorizing credit unions to conduct their own stress tests in accordance with the NCUA’s requirements and allowing those credit unions to incorporate the stress test results into their capital plan submissions. Among other changes, the rule would establish “tiers” of requirements with the full stress testing only being required for credit unions (in Tier 3) with $20 billion or more in assets. The agency is open to suggestion whether $20 billion is the proper threshold for the future of the credit union industry. Further, the proposal seeks input not only from higher-asset threshold credit unions that might be subject to the stress testing requirements, but also all credit unions, as any capitalization failures would directly impair their SIF positions.
Final Rule, Part 746 Subpart B, Appeals Procedures. This final rule established procedures to govern appeals to the Board and will apply to agency regulations that currently have their own embedded appeals provisions. The final rule will replace those provisions with a uniform, comprehensive set of procedures that will apply in cases, wherein a party is a creditor of the SIF, rather than a credit union, in which a decision rendered by a regional director or other program office director is subject to appeal to the Board. The procedures are intended to result in greater efficiency, consistency, and better understanding of the way in which matters under the covered regulations may be appealed to the Board.
Final Rule, Part 746 Subpart A, Supervisory Review Committee. The final rule adds part 746, Subpart A that amends and codifies NCUA procedures for appealing material supervisory determinations to the NCUA Supervisory Review Committee to enhance due process and to be more consistent with the practices of the federal banking agencies. The final rule also expands the number of supervisory determinations appealable to the SRC and provides credit unions with the opportunity for additional review by the Director of the Office of Examination and Insurance. The rule would also provide for a direct oral appeal option to the NCUA Board.
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