Removing Barriers Blog

NCUA Board Lowers Operating Level to 1.38%
Posted December 13, 2018 by CUNA Advocacy

During today’s meeting, the NCUA Board lowered the Share Insurance Fund Normal Operating Level, reviewed a report from the Regulatory Reform Task Force, received a briefing on blockchain and distributed ledger technology, and approved a technical amendments final rule.

Normal Operating Level (NOL): As a late addition to the meeting agenda, the Board approved a reduction of the Share Insurance Fund NOL from 1.39% to 1.38% for 2019. The decrease to the NOL results primarily from a more favorable assessment of the value of the agency’s claims on the corporate asset management estates. The NOL of 1.39% was set in 2017.

CUNA Chief Advocacy Officer Ryan Donovan provided the following regarding the NOL: “We thank NCUA for taking action to phase down the NOL. We strongly supported NCUA issuing share insurance fund distributions with the expectation that a rise in the NOL was temporary. We’re encouraged that NCUA is honoring its commitment to review the NOL each year, and look forward to the possibility of an additional dividend depending on NCUA’s analysis.”

NCUA stated the increase in the NOL was necessary while the Share Insurance Fund holds corporate legacy assets and said that the NOL would be phased down to 1.30% by 2021.

Reg Reform Report: The NCUA Regulatory Reform Task Force, which oversees implementation of the agency’s regulatory reform agenda, published its second and final report. Upon recommendation of the Task Force, NCUA will return to its former practice of conducting three-year rolling reviews of its regulations and will post progress reports on its reform efforts on its website every six months.

We are in the process of reviewing the report and will provide a summary on our Removing Barriers Blog.

Blockchain Briefing: The Board was briefed on blockchain and distributed ledger technology. The briefing was provided as part of the work of the NCUA Blockchain Working Group, which was established in July to bring the agency up to speed in this area. The briefing addresses Bitcoin and other cryptocurrencies; blockchain and distributed ledger technology as a technological innovation; and opportunities and risks of blockchain and distributed ledgers.

Technical Amendment Final Rule: The Board approved a final rule that makes technical amendments to various provisions of NCUA’s regulations. These technical amendments correct minor drafting errors and inaccurate legal citations and remove unnecessary regulatory provisions that no longer apply to FICUs.