Removing Barriers Blog

Comment Call: NCUA’s Incentive Based Compensation Arrangements Proposed Rule
Posted May 11, 2016 by Meghan M

We have posted a summary of NCUA’s proposed incentive-based compensation arrangements proposed rule to our website and PowerComment. We would like your comments by June 8; comments are due to NCUA by July 22, 2016.

The proposed rule has not yet been published in the Federal Register. It’s likely that the process of approval from all of the banking agencies is slowing down the process of Federal Register publication. However, we do have a draft of the rule available on the comment call page.

The Dodd-Frank Act required all of the federal banking agencies, along with the Federal Housing Finance Agency (FHFA), U.S. Securities and Exchange Commission (SEC), and NCUA to issue a joint rule on incentive based compensation. 

The proposed rule would:

(1) prohibit incentive-based payment arrangements that the Agencies determine encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss; and

(2) require those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.   These requirements only apply to credit unions with assets of $1 billion or more.