At today's Board meeting, NCUA received a report of the National Credit
Union Share Insurance Fund Quarterly Report, authorized for publication a
Proposed Interagency Rule, Parts 741 and 751, Incentive Based Executive
Compensation, and a Proposed Rule, Parts 701 and 721, Federal Credit Union
Occupancy, Planning, and Disposal of Acquired and Abandoned Premises,
Incidental Powers.
National
Credit Union Share Insurance Fund Quarterly Report.
Rendell L. Jones, chief Financial
Officer presented the Quarterly Report of the National Credit Union Share
Insurance Fund. Jones reported Total
Income of $57.3 million and a net income of $24.0 million. The Ending Reserve Balance was reported at
$152.2 million. The number of problem
credit unions (CAMEL Code 4/5) ending 1st quarter was at 218, down 2
from the previous quarter, with the percent of CAMEL code 4/5 to shares at a
0.78% ratio. The number of CAMEL Code 3
credit unions fell to 1,212 from a previous number of 1,261. The number of credit union failures for 2016
was 6.
Proposed
Interagency Rule, Parts 741 and 751, Incentive Based Executive Compensation.
This is a joint rule by all the
prudential banking regulators and the SEC to implement provisions of the Dodd-Frank
Act. Dodd-Frank requires regulations or
guidelines to prohibit incentive-based payment arrangements in financial
institutions that the Agencies determine encourage inappropriate risks by
providing excessive compensation or that could lead to material financial
loss. The act also requires regulations
or guidelines that require financial institutions to disclose information about
the structure of their incentive-based compensation arrangements in sufficient
detail to allow regulators to determine whether the arrangements provide
excessive compensation or could lead to material financial loss.
This proposed rule applies to credit
unions with assets of $1 billion or more divided into three levels: 1.
Level 1 - $250 billion and above; 2. Level 2 - $50 billion - $250 billion;
and 3. Level 3 - $1 billion - $50 billion.
The rule addresses requirements for the structure of compensation for
senior executive officers and significant risk takers at Level 1 and Level 2
institutions. Additionally, all covered
institutions must annually create and retain for 7 years records documenting
the structure of incentive-based compensation arrangements and receive
appropriate oversight from the credit union’s board. All covered institutions are subject to the
general prohibition on compensation arrangements that encourage inappropriate
risks.
Proposed Rule, Parts 701 and 721, Federal Credit Union
Occupancy, Planning, and Disposal of Acquired and Abandoned Premises,
Incidental Powers.
This proposed rule amends the regulations governing a
Federal Credit Union’s occupancy, planning, and disposal of acquired and
abandoned premises, and its regulation regarding incidental powers. It eliminates a requirement that an FCU must
plan for, and eventually achieve full occupation of acquired premises. It does retain the requirement that a credit
union “partially occupy” a premises defined as use on a full-time basis of at
least 50% of the premises, or by a combination of the credit union and a CUSO
controlled by the credit union. It
further amends the excess capacity provision to clarify that an FCU may lease
or sell excess capacity in its facilities, but it does not need to anticipate
that the capacity will ultimately be occupied by the FCU in the future.