Compliance Blog

By Eliott C. Ponte, Law Clerk

Free Consulting from the NCUA

Credit unions that have either (1) total assets of less than $50 million, (2) a new charter (fewer than 10 years), (3) a designation as a Minority Depository Institution, or (4) a designation as a low-income credit union can nominate themselves to receive free consulting services from the National Credit Union Administration’s Office of Small Credit Union Initiatives.  

NCUA’s consulting services are provided by experienced economic development specialists who offer assistance to credit unions in the areas of budgeting, marketing, policy development, strategic planning and operational or regulatory areas.  Selected credit unions receive assistance for a six-month period.  Credit unions must nominate themselves by May 31, 2014.  For additional information, please visit the consulting page for the Office of Small Credit Union Initiatives  or email the Office of Small Credit Union Initiatives at oscuimail@ncua.gov.

 

Second Round for Grants:  $1.2 Million Available

NCUA will accept applications from June 2^nd through June 30^th for grants in various areas.  The guidelines for the Second Round of Grants can be found here.  To qualify for this grant program, federally chartered credit unions must have a current “low-income” designation, and state chartered credit unions must have the equivalent low-designation from their respective state supervisory authority and concurrence from the NCUA. 

The NCUA is offering four separate initiatives during the second round of funding.  Each credit union may apply in any of the four grant initiatives, but the credit union may only receive funding for one initiative.  Below is a list of the four initiatives:

• Community Development Financial Institution Certification.  NCUA anticipates awarding 60 credit unions $2,500 each to cover the cost of applying for Community Development Financial Institution certification.  This certification makes a credit union eligible for funding to help service low-income members and communities that lack adequate access to affordable financial services products.
• New Product and Service Development.  Credit unions that want to offer members new electronic services will be eligible for grants up to a preset amount based on the individual product.  These services include first-time websites, home banking, mobile banking, bill pay, remote deposit capture, online loan and member applications, electronic or digital signatures, and debit, credit or prepaid cards.  Total allocation is $652,000, with a maximum award of $7,500 for each successful applicant.
• Collaboration.  NCUA will award four collaboration grants of up to $50,000 each for a total of $200,000.  Credit unions may use these grants to establish collaborative relationships for cost-saving projects like back-office operations, vendor due diligence and secondary capital investment pools.  A minimum of three credit unions must apply, with the lead credit union having its low-income designation.  Collaborations may include leagues, CUSOs or vendors.
• Training.  Grants of up to $3,000 each will be available to pay for training in compliance, collections and lending, and governance.  The total allocation for training grants is $198,000.

Credit unions can find more information and apply online by clicking here. 

 

NCUA Goes To YouTube to Explain Their Proposed Risk Based Capital Rule; Comment Deadline Approaching; Sign Up to Learn More on RBC at NAFCU’s Annual Conference

Last week, NCUA’s Larry Fazio, Director of Examination and Insurance, JeanMarie Komyathy, Director of Risk Management, and John Worth, Chief Economist, went to YouTube to discuss NCUA’s Proposed Risk Based Capital Rule (RBC Rule).  A link to their video can be found here.

During the video, the three explained that the reason for updating the RBC Rule was to adapt its capital rules with Basel II and III, to follow the FDIC’s amendments to its RBC Rules, and to respond to recommendations made by the Government Accountability Office and the NCUA’s Inspector General. 

In addition, the three stated that they expect about 200 credit unions will be negatively affected by the proposed RBC rule.  Specifically, about 190 credit unions will have their PCA category changed from well-capitalized institution to an adequately capitalized institution, and about 10 credit unions will drop to an undercapitalized institution.

For an in-depth summary of the NCUA’s proposed RBC rule, please read NAFCU’s Risk-Based Capital Rule Regulatory Alert.  Comments on the proposed rule are being accepted by the NCUA until May 28, 2014, and can be submitted by sending an email to regcomments@ncua.gov.  NAFUC has put together speaking points on the RBC Rule and has outline its full position on its Risk Based Capital webpage.  In addition, this Compliance Blog has featured several posts on the RBC Rule.

NAFCU will also be discussing the NCUA’s RBC rule at NAFCU’s Annual Conference.  Register by May 23^rd and save $100!  For more information about NAFCU’s Annual Conference, held at the Venetian Hotel in Las Vegas from July 22^nd to 26^th, click here. 

 

Ten More Days of Comments:  CFPB Budges on Remittance Rule Comment Deadline

Last week, the CFPB announced that it would extend the comment period for the proposed amendments to its international remittance transfer rule by 10 days.  Originally, the CFPB only allowed a 30-day comment period that would have ended on May 27^th; however, NAFCU and other trade organizations urged the CFPB to extend the deadline to allow credit unions more time to prepare comments on the proposed rule. 

Currently, the rule proposes to extend an exception for international remittance transfers disclosures provided to federally insured credit unions and banks on certain international remittance transfers to July 21, 2020 (five more years).  In addition, the rule includes clarifications on a number of issues, including the treatment of U.S. military installations abroad, permissibility of oral disclosures, treatment of transfers from non-consumer accounts, and error resolution procedures and remedies.  A copy of the proposed rule can be found on the federal register, and an in-depth summary of the rule and an analysis of the issues can be found on NAFCU’s website.