Compliance Blog

Written by Steve Van Beek

Editorial Note:  The rumors on the mortgage final rules were true.  We'll have more on that in a blog post this afternoon.  For now, you can find the three new final rules here (under the 2013 section).  

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NCUA Board Meeting.  Yesterday was NCUA's January Board Meeting.  You can find NCUA's Board Action Bulletin here.  Below are a few tidbits about NCUA's actions.

Small Credit Unions.  NCUA finalized their small credit union rule and raised the threshold to $50 million in assets.  The short summary of the rule is here.  The full final rule is available here.  The $50 million threshold will be reviewed in two years initially and then every three years after that.

It should be noted that this change will impact the thresholds for risk-based net worth and interest rate risk requirements.  However, it will not impact NCUA's recent decision to streamline exams for CUs under $10 million in assets.  The threshold for those exams will remain at $10 million.  

Low-Income Designation.  NCUA also finalized a rule that will extend the acceptance period for the low-income designation from 30 days to 90 days.  The summary is here and the final rule here.    

Troubled Condition Definition.  NCUA also finalized their rule on troubled condition.  The summary is here and the final rule is here.  

Be sure to check out NCUA's Board Action Bulletin for additiona details (and longer summaries and explanations).  

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NCUA Budget Webpage.  NCUA recently created a new 2013 Budget webpage which seeks to consolidate information from NCUA regarding its 2013 Budget.  Included are Q&As from NCUA on the 2013 Budget.

NAFCU also recently sent a letter to NCUA regarding the 2013 Budget.  Here is a portion of the letter:

“While we appreciate the agency’s increased attempts at cost saving measures, we have significant concerns regarding NCUA’s overall increases in its operating budget for 2013 following significant increases in 2012. This represents a $14.5 million or 6.1% increase over the prior year and an increase of more than 58% over the past 5 years. More specifically, NAFCU is very concerned about the $12.8 million increase to the pay and benefits section of the budget.

Our review of the questions and answers recently provided by the agency to the industry indicates that 5.4% of the rise in pay and benefits represents the budget increase to cover a “contingent” pay adjustment that is indexed to the General Schedule pay scale for federal employees.  On December 27, 2012, President Obama issued an Executive Order that would lift the current pay freeze on federal employees and implement a 0.5% across-the-board increase for federal employees, but The American Taxpayer Relief Act of 2012 (H.R. 8) which was signed into law on January 2, 2013, extended that pay freeze through March 27, 2013. We strongly urge the NCUA to honor the federal government employee pay freeze and keep salaries at the current levels. Without a federal pay raise, NCUA pay and benefits would still increase by more than $3.7 million due to fully funded positions approved in 2012 and net adjustments.  Should NCUA honor the freeze, we would ask that you adjust any operating assessments on credit unions accordingly, instituting such adjustment before the 2013 assessment on federal credit unions.

Recently, the Federal Deposit Insurance Corporation (FDIC) reported that it had chosen to reduce its 2013 operating budget by more than 18% from 2012 while reducing its authorized staff by 7.9%. With more failures and fewer staff in proportion to the number of institutions it oversees as compared with the FDIC, we continue to seriously question why the NCUA sees fit to increase its budget year after year.”

You can find the full letter here.