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The NCUA issued
a Final Rule on Risk-Based Capital Measures, delegated authority to the Office
of Consumer Protection for approval of Community Charter Requests, issued a Proposed
Rule making technical corrections for permissible Investment Activities, and
received a quarterly report on the (National Credit Union Share Insurance Fund
(NCUSIF). During the closed portion of
the meeting the NCUA considered two Supervisory Actions and one Personnel
matter. These items were closed to the
Final Rule – Part 702, Prompt
Corrective Action and Risk-Based Capital Measures
modernizes NCUAs risk-based capital standards to require credit unions with
assets over ($100 million), which NCUA deems as complex to hold capital
commensurate with their risk. This is an
improvement over the last RBC2 proposal with many of the changes coming as a
result of CUNA, League/Association, and credit union input. The new rule makes the following changes from
the proposed rule:
rule contains revisions to certain definitions to improve clarity and now
contains an appendix describing alternative approaches which can be used to
determine the risk weights assigned to certain assets.
weights appear to be comparable to risk-based capital measures used by the
FDIC, Fed Reserve, and OCC. NCUA states
that after updating the Call Report system, CUs will have the ability to
compare the regulatory risk-weighted capital measurements for complex credit
unions to other federally insured depository institutions.
effective date for the changes go into effect in January 1, 2019.
note that the rule is 424 pages long.
CUNA will continue to analyze the rule and will provide a more thorough
Delegations of Authority, Approval
of Community Charter Requests
It should be noted that the
proposed changes to the delegations specifically limit the authority of the
Director to redelegate. Action on any matter involving a large population
community credit union that currently requires Board approval may not be
redelegated by the OCP Director, but instead must remain at the Director level.
Moreover, all such matters will continue to require review and comment from
E&I before they may be approved. Importantly,
the Board will continue to review all appeals of disapprovals.
Proposed Rule, Part 703.14,
Permissible Investment Activities – Bank Notes
proposed rule amends the maturity requirement for bank notes to be permissible
investments for federal credit union by removing the word “original” from the
current requirement that bank notes have “original weighted average maturities
of less than 5 years.
Provides flexibility to credit unions in purchasing bank notes. The suggestion came from a call to the
investment hotline at NCUA. This change
is largely a technical change.
member McWatters suggested that of all the regulatory review items pending this
was not the highest priority that could be dealt with during the discussion but
did not oppose the substance of the rule.
He did ultimately vote against the rule based on the procedural issues.
briefed the Board on the status of the National Credit Union Share Insurance
Fund (NCUSIF). Staff noted that the
NCUSIF ended the third quarter of this year with an equity ratio of 1.29% and
continued to reflect stable trends in income and operating expenses. Investment and other income was at $56.8
million, and operating expenses were at $49.0 million. The percent of CAMEL Code 4/5 Shares to total
Insured Shares stood at 0.81%. The
number of credit union failures in 2015 sits at a 5 year low of 11.
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© 2017 Credit Union National Association |
ADA Compliance Notice & Legal