May Meeting of the NCUA Board
Friday, June 1, 2018 9:40 AM

During the NCUSIF update there was discussion on the actual timing of the share insurance dividend that is expected in the 3rd quarter.  Well, credit unions should anticipate the payment early in the third quarter, likely July but possibly August.  Keep in mind the timing is subject to change but it looks like the dividend payment will paid sooner rather than later!   

Involuntary liquidations final rule was on the agenda and the Board adopted the proposed amendments without change.  The rule is effective 30 days from publication in the Federal Register.  Once effective, permissible severance claims in an involuntary liquidation will include vacation, sick, and severance pay if the payment is supported by an employee handbook or other type written credit union document and such payment is objectively applied (the same formula is applied for all employees). 

The last item on the agenda was a proposal on payday alternative loans.  The proposal doesn’t make changes to NCUA’s current PALs program but instead creates an alternative option (PALs II) which would not be subject to the safe harbor in CFPBs payday loan rule.  While not subject to the safe harbor, NCUA’s PALs II would likely qualify for alternative loans exemption in the CFPBs rule under particular conditions.  NCUA's proposal also suggests the possibility of creating a third option (PALs III) which would incorporate different fee structures, loan features, maturities, and loan amounts.  The comment period is open for 60 days.

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Source:  CUNA Compliance Blog