Removing Barriers Blog

NCUA Receives Briefings on Minority DI Report and NGNs, and Requests Input on Future Examinations

Today, the NCUA Board received briefings on the Minority Depository Institutions Annual Report and on the NCUA Guaranteed Notes Oversight Program. The Board also issued an RFI on Strategies for Future Examination and Supervision Utilizing Digital Technology. In addition, the Board adopted a final rule that makes a number of technical amendments to the NCUA’s regulations, including changes to correct minor errors and inaccurate citations.

Chairman Hood announced that prior to the start of today’s meeting, the Board agreed to remove from the agenda discussion of a proposed rule on Risk-Based Net Worth. In addition, Chairman Hood noted that the agency will not be resuming normal operations beginning on July 6, as previously planned.

Board Briefing – Minority Depository Institutions Annual Report

The Board was briefed on the MDI Annual Report. A federally insured credit union can qualify as an MDI if 50% or more of its board members, current members, and eligible potential members combined with current members are minorities.

Here are a few highlights from the report:

  • In 2019, there were 514 MDI credit unions with total assets of $40.5 billion and more than 3.9 million members.
  • In 2018, there were 529 MDI credit unions with total assets of $38.5 billion and nearly 3.9 million members.
  • In 2019, NCUA chartered one new MDI federal credit union (Otoe-Missouria FCU in Red Rock, OK).
  • In 2019, 58 MDI credit unions were awarded $738,000 in technical assistance grants; three MDIs received $75,000 as part of the MDI Mentoring Pilot Initiative.

Board Briefing – NCUA Guaranteed Notes Oversight Program

The Board received a comprehensive briefing on the NGN program. Staff announced a distribution to Southwest Corporate certificate holders equal to roughly 42% of $403.5 million of membership capital. Affected credit unions will be notified of the amount and other payment details; the payout is planned for July.

In addition, staff mentioned that US Central, Members United, and Constitution certificate holders may also receive distributions, but such distributions would not occur until sometime in 2021.

More information on the corporate system resolution can be found here.

Request for Information – Strategies for Future Examination and Supervision Utilizing Digital Technology

The Board issued an RFI to solicit feedback on alternative procedures to modernize the agency’s examination program, including aspects related to virtual examinations. The RFI also seeks input on any unnecessary hurdles or burdens credit unions face with respect to their ability to leverage various technological advances.

Through modernization, the NCUA intends to:

  • Reduce burden on credit unions and increase agency efficiency by reducing onsite examination time;
  • Improve offsite supervision capabilities;
  • Provide more consistency and standardization for the examination and supervision process;
  • Improve communication between examiners, credit unions, and state supervisory authorities; and
  • Explore and evaluate technology utilization and appetite for adoption.

The NCUA will accept comments on the RFI for 60 days following publication in the Federal Register.