Removing Barriers Blog

NCUA Board Meeting Summary
Posted October 28, 2016 by CUNA Advocacy

The NCUA adopted a Final Rule on the Statutory Inflation of Civil Monetary Penalties, proposed an Interagency Rule on Loans in Areas having Special Flood Hazards, adopted a Final Rule on a Name Change for the Office of Consumer Protection, adopted a Final Rule on Chartering and Fields of Membership, proposed a Rule on Chartering and Fields of Membership, and received a Board Briefing on Supplemental Capital.  Following the open board meeting the Board held a Board Briefing on NCUA’s 2017-2018 Budget wherein they received public testimony. 

  1. Final Rule, Part 747, Statutory Inflation Adjustment of Civil Money Penalties 
    This rule adjusts the maximum Civil Monetary Penalties to account for inflation. This action is required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 
  2. Proposed Interagency Rule, Part 760, Loans in Areas Having Special Flood Hazards. 

    The NCUA, Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and the Farm Credit Administration are adopting rules to amend their regulations regarding loans in areas having special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act). Specifically, the proposed rule requires regulated lending institutions to accept policies that meet the statutory definition of private flood insurance in the Biggert-Waters Act and permit regulated lending institutions to accept private flood insurance policies that do not meet the statutory definition of “private flood insurance” on a discretionary basis, subject to certain restrictions. 

  3. Final Rule, Parts 708a, 708b and 790, Name Change for Office of Consumer Protection  

    This rule changes the name of the Office of Consumer Protection to the Office of Consumer Financial Protection and Access. Adding the word “financial” to the title of the office clarifies that its focus is on consumer financial protection, rather than other types of consumer protection issues. Adding the term “access” to the office’s title better reflects the office’s mission and duties related to chartering and field of membership requirements. 

  4. Final Rule, Part 701 and Appendix B, Chartering and Fields of Membership 

    In November 2015, the NCUA Board issued a proposal to comprehensively amend NCUA’s chartering and field of membership policies and procedures. This Final Rule and the amendments made within will implement changes in policy affecting:  

    • The definition of a local community, a rural district, and an underserved area; 
    • The expansion of options for a multiple common bond credit union to add potential members;  
    • The expansion of options available to single common bond credit unions based on a trade, industry or profession; and  
    • The process for applying to expand membership in a federal credit union.  
    The rule also implements technical changes to reflect the name change of the Office of Consumer Protection to the Office of Consumer Financial Protection and Access, and changes to its chartering and field of membership responsibilities to more comprehensively addresses the due process associated with the agency’s decisions on charter amendment requests. This updated framework will make NCUA’s rules more efficient and maximize access to federal credit union services to the extent permitted under the Federal Credit Union Act. 
    A more detailed summary comparing the existing FOM rules vs. the 2016 Final Rule can be found here
  1. Proposed Rule, Part 701 and Appendix B, Chartering and Fields of Membership 

    This proposed rule provides generally for three changes to the Fields of Membership Rules as a corollary to the amendments adopted at this board meeting.  The three areas addressed are as follows: 

    • Provide applicants seeking approval to initially form, expand, or to convert to, a community charter the option, in lieu of relying on a “presumptive community,” to submit a narrative to establish common interests and interaction among residents of the area it proposes to serve, thus qualifying the area as a well-defined local community;
    • Increase to 10 million the population limit on a well-defined local community other than a Single Political Jurisdiction; and  
    • Permit a credit union to designate an individual portion of a Core-Based Statistical Area as its community without regard to metropolitan division boundaries within the area, if any. 
  1. Board Briefing, Supplemental Capital 

    The Board received a Board Briefing on Supplemental Capital which discussed the history of Alternative Capital, Securities regulations issues, Regulatory Issues, experiences/issues from the banking industry, and other issues.  The presentation can be viewed here.  

    The meeting noted that the NCUA intends to issue an Advance Notice of Proposed Rulemaking (ANPR), which would be a preliminary step to issuing a Proposed Rule.  The ANPR will allow the NCUA to more clearly focus a proposed rule and determine whether such a rule would be feasible and worthwhile for credit unions.  It will further allow for stakeholder input prior to moving to a final rule.   

  1. Board Briefing, NCUA’s 2017 – 2018 Budget 

    The Board received a Briefing on NCUA’s 2017 – 2018 Budget which included a presentation from NCUA staff.  The presentation can be viewed here.   

    Mike Schenk, CUNA vice president of economics and statistics, and 4 members of CUNA’s examination and supervision subcommittee including Sean Gaven, senior vice president and chief financial officer of American Airlines FCU; Paul Gentile, president/CEO at the Cooperative Credit Union Association and chairman of the subcommittee; Bill Raker, president/CEO of Firefly CU; and Gordon Sam, chairman of the board of directors of Pearl Hawaii FCU. presented testimony on budget and transparency issues. Additionally, Lucy Ito from NASCUS and Dan Berger of NAFCU provided testimony.  

    This was the first such briefing conducted by the agency since 2008. CUNA and its examination and supervision subcommittee have long reviewed and commented on the NCUA budget in letters and meetings with the agency.   

Comments on the budget can be submitted to the NCUA until 5 p.m. (ET) on Nov. 4. The board will vote on a 2-year budget at its Nov. 17 meeting.