Today,
the NCUA Board issued a proposal on real estate appraisals, adopted a final
“Second Chance IRPS,” and received a briefing on the status of the Share
Insurance Fund.
Proposed Rule
– Real Estate Appraisals (Part 722)
The
Board issued a proposed rule to increase the threshold
below which appraisals would not be required for residential real
estate-related transactions from $250,000 to $400,000. Transactions that fall
below the threshold would require a written estimate of market value of the
real estate collateral that is consistent with safe and sound banking
practices.
Though
ultimately voting in favor of the proposal, Board Member Harper expressed
significant concerns regarding potential risk associated with the change,
particularly in the face of a future economic downturn.
CUNA
appreciates NCUA listening to our concerns on this issue. CUNA sent a letter early last month
specifically seeking this change.
NCUA
will accept public comments on the proposal for 60 days following publication
in the Federal Register.
Final IRPS – “Second Chance IRPS” (IRPS 19-1)
The
Board adopted a final “Second Chance IRPS” that expands the list of criminal
offenses by a prospective credit union employee that do not require approval by
the NCUA Board. Specifically, the IRPS does not require an application for
certain insufficient funds checks, small dollar simple theft, false
identification, simple drug possession, and isolated minor offenses committed
by covered persons as young adults.
CUNA
supported the proposed IRPS, as we believe
this expansion will result in a reduction in regulatory burdens to credit
unions, covered individuals, and the agency, while continuing to mitigate the
risk to credit unions posed by convicted persons.
While
the IRPS was adopted largely as proposed, to further streamline the application
process, the final IRPS delegates authority from the Board to program offices
to process, review, and act upon credit union-sponsored consent applications.
However, the Board will retain authority to decide on individual applications,
which tend to be more complex and fact-specific.
The
final IRPS will be effective 30 days after publication in the Federal Register.
Quarterly Report – Share Insurance Fund
Today’s report on the Share Insurance Fund indicated total
income of $80.1 million and net loss of $24 million for the quarter ending 9/30/2019.
The balance sheet showed total liabilities and net position of $16.716 billion,
a decrease of roughly $618 million from 6/30/2019. The Fund’s equity ratio
stands at 1.33% as of the end of the last quarter. The number of CAMEL Code 4/5
credit unions decreased slightly from the preceding quarter to 200; CAMEL Code
3 credit unions decreased to 861. So far in 2019 there have been two credit
union failures