Credit Union Service Organizations
NCUA is issuing a final rule amending its credit union service organization (CUSO) regulation. The amendment adds two new categories of permissible CUSO activities: Credit card loan origination and payroll processing services. The amendment also adds new examples of permissible CUSO activities within existing categories and expands the permissible scope of certain services to include persons eligible for credit union membership. The amendment imposes new regulatory limits on the ability of credit unions to recapitalize their CUSOs in certain circumstances. Although the CUSO rule generally only applies to federal credit unions (FCUs), the amendment revises and extends to all federally insured credit unions the provisions ensuring that credit union regulators have access to books and records and that CUSOs are operated as separate legal entities; however, the rule also contains a procedure through which state regulators may seek an exemption from the access to records provisions for credit unions in their state. The amendment clarifies that CUSOs may buy and sell participations in loans they are authorized to originate. Finally, the amendment deletes as unnecessary the section in the current rule concerning amendment requests. These amendments clarify the rule, enhance CUSO operations, and address safety and soundness concerns.
Community Development Revolving Loan Fund for Credit Unions
The National Credit Union Administration (NCUA) will accept applications for participation in the Community Development Revolving Loan Fund's [Fund] Loan Program in the last quarter of 2009, subject to availability of funds. The Fund's total appropriation is $13.4 million. Because the CDRLF will be fully loaned in early 2009, new loans will be awarded from loan repayments made throughout the year in 2009. Based on the CDRLF's aggregate loan amortization schedule, approximately $3.1 million will be repaid and available for loans in late 2009. Therefore, the loan application period will open in the last quarter of 2009. Application procedures for the 2009 Fund Loan Program will be posted to the NCUA Web site.
Agency Information Collection Activities: Submission to OMB for Revision to a Currently Approved Information Collection; Comment Request
The NCUA intends to submit the following information collection to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). This information collection is published to obtain comments from the public.
Organization and Operations of Federal Credit Unions; Underserved Areas (IRPS 08-2)
NCUA is adopting a final rule implementing four modifications to its Chartering and Field of Membership Manual to update and clarify the process of approving credit union service to ``underserved areas.'' First, the rule clarifies the procedure for establishing that an ``underserved area'' qualifies as a local community. Second, it makes explicit the process for applying the economic distress criteria that determine whether an area combining multiple geographic units is sufficiently ``distressed'' to qualify as ``underserved.'' Third, it updates the documentation and clarifies the scope requirements for demonstrating that a proposed area has ``significant unmet needs'' for loans and financial services. Finally, the rule utilizes data provided by NCUA on the location of depository institution facilities to determine whether an area is ``underserved by other depository institutions'' according to the presence of their facilities within the area.
Prompt Corrective Action; Amended Definition of Post-Merger Net Worth
NCUA is adopting a final rule implementing a statutory amendment that expands the definition of ``net worth'' that applies to natural person credit unions under regulatory capital standards known as ``prompt corrective action.'' The expanded definition allows the acquiring credit union, in a merger of natural person credit unions, to combine the merging credit union's retained earnings with its own to determine the acquirer's post-merger ``net worth.'' For a merger in which the acquirer is a corporate credit union, the proposed rule similarly redefines corporate credit union capital to allow the acquirer to combine with its capital the retained earnings of the merging credit union to determine the acquirer's post-merger capital.