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NCUA: Board Meeting and Establishment of Two Working Groups
Friday, December 12, 2014 6:30 AM

Yesterday, National Credit Union Administration Chair Debbie Matz announced the formation of two new working groups—one to explore issues associated with credit union field-of membership rules and the other to tackle the subject of supplemental capital.

Credit Union National Association was informed that CUNA representatives would be involved with the working groups.

CUNA President/CEO Jim Nussle called the announcement "a significant and welcome development" in these key areas. "There is much work to do here, and CUNA is ready to roll up sleeves and help move regulatory improvements forward."

CUNA advocates for supplemental sources of capital for credit unions and has urged federal regulators to consider adding a supplemental capital provision as part of its revised risk-based capital regulation expected to be unveiled Jan. 15.  Board member J. Mark McWatters Wednesday confirmed to CUNA that he supports that objective.

CUNA also has explored field-of-membership issues with the agency, including recommendations to facilitate greater service to rural districts and other communities in the near future.

During yesterday's NCUA board meeting, the board adopted a final rule on appraisals, approved a request for comments related to a review of NCUA’s regulations, and approved the 2015 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) Oversight Budget of $4,121,519, which is an 8.9 percent decrease from the 2014 TCCUSF budget.

Also during the board meeting, directors addressed the Appraisals final rule under Parts 701 and 722, which makes several changes, which are not substantive. CUNA supported the proposal and encouraged the board to adopt it.

Specifically, the final rule, which will become effective 30 days after publication in the Federal Register, will:

  1. Eliminate the duplicative requirement that federal credit unions make available a copy of the appraisal used in connection with that member’s application for a loan secured by a first lien on a dwelling. (This requirement is included in the CFPB’s recently amended Regulation B.)
  2. Expand the current exemption for certain transactions involving an existing extension of credit. Specifically, this change allows credit unions to refinance or modify a real estate-related loan without having to obtain another appraisal, if there is no advancement of new monies.
  3. Make a minor technical amendment to the definition of the term “application.”

Although NCUA has a formal policy to review each of its regulations every three years, the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) additionally calls for the Federal bank regulatory agencies and the Federal Financial Institutions Examination Council to conduct a decennial review of their regulations to eliminate unnecessary regulatory burden. While not technically included within EGRPRA’s definition of an “appropriate Federal banking agency,” NCUA has elected to participate in EGRPRA.

Finally, NCUA approved the publication of a notice seeking comments on three categories of rules: Agency Programs, Capital, and Consumer Protection.