National Credit Union Administration – Federal Register Recent Federal Regulation Documents

NCUA is amending the definition of ``low-income members'' to clarify that, in determining if a credit union qualifies for a low- income designation, the comparison of credit union data, whether individual or family income data, must be with statistical data for the same category. The amendment will clarify the intention of the original regulatory text so it is consistent with the geo-coding software the agency uses to make the low-income credit union (LICU) designation.

On July 22, 2009, NCUA published a final rule amending part 707, which implements the Truth in Savings Act, and the official staff

The OCC, Board, FDIC, OTS, FCA, and NCUA (collectively, the Agencies) are adopting final rules to implement the Secure and Fair Enforcement for Mortgage Licensing Act (the S.A.F.E. Act). The S.A.F.E. Act requires an employee of a bank, savings association, credit union or Farm Credit System (FCS) institution and certain of their subsidiaries that are regulated by a Federal banking agency or the FCA (collectively, Agency-regulated institutions) who acts as a residential mortgage loan originator to register with the Nationwide Mortgage Licensing System and Registry, obtain a unique identifier, and maintain this registration. The final rule further provides that Agency- regulated institutions must: require their employees who act as residential mortgage loan originators to comply with the S.A.F.E. Act's requirements to register and obtain a unique identifier, and adopt and follow written policies and procedures designed to assure compliance with these requirements.

Pursuant to the Privacy Act of 1974, notice is given that the National Credit Union Administration (NCUA) is revising its Privacy Act Systems of Records (SOR) Notice. As part of its periodic review of agency systems of records, NCUA proposes to update and revise its SOR Notice. The review identified several changes requiring revision to the SOR Notice including: Changes in recordkeeping practices, agency organizational changes, a system name change, and minor changes to routine uses. No new exemptions from provisions of the Privacy Act of 1974 were required. The revisions reflect the changes, clarify, and update the SOR Notice.

NCUA is amending its chartering and field of membership manual to update its community chartering policies. These amendments include using objective and quantifiable criteria to determine the existence of a local community and defining the term ``rural district.'' The amendments clarify NCUA's marketing plan requirements for credit unions converting to or expanding their community charters and define the term ``in danger of insolvency'' for emergency merger purposes.

NCUA is amending a number of its regulations to make minor technical corrections. The amendments update the regulations and make other grammatically necessary corrections. The amendments are intended to provide helpful changes to NCUA's regulations.

The National Credit Union Administration (NCUA) will accept applications for participation in the Community Development Revolving Loan Fund's [Fund's] Loan Program beginning in June 2010, subject to availability of funds. The Fund's total appropriation for loans is $13.4 million.

NCUA proposes to amend its general lending rule to enable federal credit unions (FCUs) to offer short-term, small amount loans (STS loans) as a viable alternative to predatory payday loans. The proposed amendment would permit FCUs to charge a higher interest rate for an STS loan than is permitted under the general lending rule, but the proposal will impose limitations on the permissible term, amount, and fees associated with an STS loan. The STS loan alternative will assist FCUs in meeting their mission to promote thrift and meet their members' credit needs, particularly the provident needs of members of modest means. Permitting a higher interest rate for STS loans will permit FCUs to make loans cost effective while the limitations on the term, amount, and fees will appropriately limit the product to meeting its purpose as an alternative to predatory credit products. This rule also identifies ``best practices'' FCUs should incorporate into their individual STS programs.

Pursuant to its ongoing policy of reviewing regulations, NCUA is publishing a list of current and projected rulemakings, reviews of existing regulations, and completed actions as of February 24, 2010, to be included in the Unified Agenda of Federal Regulatory and Deregulatory Actions.

The National Credit Union Administration (NCUA) is issuing a proposed rulemaking covering several related subjects. The proposal documents and clarifies the fiduciary duties and responsibilities of Federal credit union directors. The proposal adds new provisions establishing the procedures for insured credit unions merging into banks. The proposal also amends some of the existing regulatory procedures applicable to insured credit union mergers with other credit unions and conversions to banks.

The OCC, FRB, FDIC, OTS, and NCUA (the agencies) in conjunction with the Conference of State Bank Supervisors (CSBS), are adopting this policy statement. The policy statement summarizes the principles of sound liquidity risk management that the agencies have issued in the past and, when appropriate, supplements them with the ``Principles for Sound Liquidity Risk Management and Supervision'' issued by the Basel Committee on Banking Supervision (BCBS) in September 2008.\1\ This policy statement emphasizes supervisory expectations for all depository institutions including banks, thrifts, and credit unions.

NCUA is amending its rules governing secondary capital accounts to permit low-income designated credit unions to redeem all or part of secondary capital accepted from the United States Government or any of its subdivisions at any time after the secondary capital has been on deposit for two years. The amendments will also allow early redemption, under the same terms and conditions, of secondary capital accepted as a match to the government-funded secondary capital. Finally, the amendments change the loss distribution provision that applies to secondary capital accounts so that secondary capital accepted under the 2010 Community Development Capital Program is senior to any required matching secondary capital accepted from an alternative source. Early redemption will continue to require approval of the appropriate Regional Director. The amended rule will accomplish the following: bring NCUA regulations into compliance with the Community Development Capital Program; and allow qualifying low-income designated credit unions that accept secondary capital pursuant to the Troubled Asset Relief Program through the Community Development Capital Program to avoid an accelerated interest rate on the secondary capital over the last five years to maturation.

On January 29, 2009, jointly with the Federal Reserve System Board of Governors (FRB) and the Office of Thrift Supervision (OTS), the NCUA Board (Board) published a final rule and staff commentary amending its credit practices regulations (UDAP Rule). The UDAP Rule also included technical clarifications and was scheduled to become effective on July 1, 2010. The Board is now revising the UDAP Rule because its stipulations became unnecessary due to the enactment of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (Credit CARD Act) on May 22, 2009, and amendments to Regulation Z implementing the Credit CARD Act that will become effective on February 22, 2010. For procedural reasons, the substantive requirements of the UDAP Rule will be removed effective July 1, 2010, but it is the Board's intent that only the technical clarifications become effective and that the substantive requirements will not take effect. This final rule applies only to the NCUA Board's regulations and does not affect the rules issued by the OTS and FRB.

On June 24, 2009, the NCUA published an interim final rule amending its lending rules to create a limited exception to the 20-year maturity limit on second mortgage loans. The amendment will permit Federal credit unions participating in the Department of the Treasury's Making Home Affordable Program to modify a second mortgage loan, beyond 20 years, to match the term of a modified first mortgage loan. This rule confirms those amendments as final without change.

NCUA is issuing proposed amendments to its rule governing corporate credit unions contained in part 704. The major revisions involve corporate credit union capital, investments, asset-liability management, governance, and credit union service organization (CUSO) activities. The amendments would establish a new capital scheme, including risk-based capital requirements; impose new prompt corrective action requirements; place various new limits on corporate investments; impose new asset-liability management controls; amend some corporate governance provisions; and limit a corporate CUSO to categories of services preapproved by NCUA. In addition, this proposal contains conforming amendments to part 702, Prompt Corrective Action (for natural person credit unions); part 703, Investments and Deposit Activities (for federal credit unions); part 747, Administrative Actions, Adjudicative Hearings, Rules of Practice and Procedure, and Investigations; and part 709, Involuntary Liquidation of Federal Credit Unions and Adjudication of Creditor Claims Involving Federally Insured Credit Unions. These amendments will strengthen individual corporates and the corporate credit union system as a whole.

Section 741.4 of NCUA's rules describes the procedures for the capitalization and maintenance of the National Credit Union Share Insurance

Section 741.4 of NCUA's rules describes the procedures for the capitalization and maintenance of the National Credit Union Share Insurance Fund (NCUSIF). The current rule, however, does not adequately

NCUA is amending its Truth in Savings rule and official staff interpretation to remove the provisions regarding the electronic delivery of disclosures. The official staff interpretations are amended to include guidance on electronic disclosures. Additionally, NCUA is amending the rule to require all credit unions to disclose aggregate overdraft fees on periodic statements regardless of whether they