Compliance Blog

Posted by Anthony Demangone

Here are some items of interest.

Economy.  NCUA indicates that the first quarter financials show few positive signs for credit unions.  Of note is the following quote from NCUA Chairman Debbie Matz:

“As long as serious economic issues persist, credit unions will be challenged. NCUA is taking administrative actions wherever necessary to uphold safety and soundness standards. We are working diligently to ensure that credit unions maintain strong balance sheets so that they can continue to serve members well through the economic recovery and beyond.” (Emphasis added.)

Reg Reform.  I've read a number of articles that estimate that perhaps more than 200 rulemakings will be needed to implement whatever regulatory reform becomes law.  Yes, perhaps more than 200.  And some of the rules must be written by an agency that has yet to be created.  Here's my view of the crystal ball: 2011 will see a slowdown in new rules from regulators.  There are a few remaining proposal and final rules of note, but after January 1, 2011, there likely will be a lull.  But when the new agency kicks into gear and regulators start writing regs to implement the reg reform law, be prepared to be busy.  I'm thinking late 2011/early 2012 will see the beginning of the avalanche.  Many of the rules will affect credit unions, but we'll have to read each one to know for sure.

Flood.  We're in a NFIP lapse again.  As noted before, regulators have issued guidance to help us understand how to proceed during a lapse.

TCCUSGP Extended.  NCUA extended the expiration date of NCUA’s Temporary Corporate Credit Union Share Guarantee Program (TCCUSGP) from June 30, 2012, to September 30, 2012. With this extension, new investments with maturities of two years or less in participating corporate credit unions made before September 30, 2012, will be fully covered by the guarantee program. This is in addition to the existing deposits already covered.

Risk Management.  NCUA recently issued Letter to Credit Union 10-CU-06,which focuses on interest rate risk.  This is simply a regurgitation of guidance the regulators issued back in January of 2010.  With the importance of risk management, though, I thought I'd give it a shout out.  Also, on page 10 of the guidance is a list of NCUA guidance documents that touch upon interest risk management.  You might want to forward this guidance and that list of other guidance documents to your CFO.  If you are the CFO, feel free to send yourself an email.