Removing Barriers Blog

NCUA Board Approves Loan Proposal & Mid-Session Budget
Posted August 03, 2018 by CUNA Advocacy

The NCUA board issued a lending proposal, finalized a suspensions and debarment rule and extended the federal credit union loan interest rate ceiling, among other items on the agenda at its most recent board meeting. The board also approved a proposed rule to delay NCUA’s risk-based capital rule by one year.

The NCUA board approved an operating fund budget for 2018 at $298.1 million. NCUA staff projects agency obligations for the year will be approximately $8.5 million less than the approved budget, based on current salary and spending projections.

The majority of the underspending is attributable to lower-than-projected staffing levels, which are resulting in lower payroll costs. In addition to lower payroll estimates, NCUA offices lowered spending estimates for non-payroll categories by $980,000, mostly related to travel.

The NCUA board also issued a proposed rule to amend rules relating to loans and lines of credit to members.

The proposal is designed to make those regulations more user-friendly by:

  • Identifying in one section the various maturity limits applicable to federal credit union loans;
  • Clarifying that the maturity for a new loan under generally accepted accounting principles is calculated from the new date of origination;
  • Expressing clearly the limits for loans to a single borrower or group of associated borrowers; and
  • Seeking comment on whether the agency should provide for longer, more flexible maturity limits on certain loans.

The board also approved:

  • Continuation of the federal credit union loan interest rate ceiling. The board is required to approve continuation of a maximum federal credit union loan interest rate over 15%. The board approved an 18% limit, effective through March 10, 2020; and
  • final rule on suspension and debarment procedures designed to ensure the agency does business only with presently responsible contractors.  The NCUA will only solicit offers from, award contracts to, or consent to subcontracts with presently responsible contractors.