Compliance Blog

Posted by Anthony Demangone

If I could only stress one research tool, it would be the use of Official Staff Interpretations.  The Official Staff Interpretation is an appendix to a regulation that gives you additional information about a regulatory requirement.  You won't find them on every regulation.  They generally are found only in Federal Reserve regulations, but NCUA included an Official Staff Interpretation for its Truth in Savings regulation.

Here's a good example.  In NCUA's Truth in Savings regulation, account is defined as:

(a) Account means a share or deposit account at a credit union held by or offered to a member or potential member. It includes, but is not limited to, accounts such as share, share draft, checking and term share accounts. For purposes of the advertising regulations in §707.8, the term also includes an account at a credit union that is held by or offered by a share or deposit broker.

That seems simple enough, right?  Well, visit the Truth in Savings Official Staff Interpretation appendix to Truth in Savings.  These appendixes are laid out the same as the regulations themselves. So, for example, there's a section that provides additional information about the definition of "accounts." And the Official Staff Interpretation not only gives additional examples of what is an account, but they give a list of things that are not accounts for the purpose of NCUA's Truth in Savings regulation.  Some things on the list may surprise you.

2. Other accounts. Examples of accounts not subject to the regulation are:

i. Mortgage escrow accounts for collecting taxes and property insurance premiums.

ii. Accounts established to make periodic disbursements on construction loans.

iii. Trust accounts opened by a trustee pursuant to a formal written trust agreement (not merely declarations of trust on a signature card such as a “Totten trust,” or an IRA or SEP account).

iv. Accounts opened by an executor in the name of decedent's estate.

v. Accounts of individuals operating businesses as sole proprietors.

vi. Certificates of indebtedness. Some credit unions borrow funds from their members through a certificate of indebtedness that sets forth the terms and conditions of the repayment of the borrowing, such as federal credit unions do through 12 CFR 701.38. Such an account does not represent an account in a credit union and is not covered by part 707.

vii. Unincorporated nonbusiness association accounts.

So, NCUA's staff is telling you that if you have accounts that are on that list, NCUA's Truth in Savings regulation does not apply to those accounts. 

Like I said, nearly all the Federal Reserve regulations have Official Staff Interpretations.  So there are a ton of helpful nuggets for Regulations Z, E, B, CC, D, C...you get the idea.   I would guess that roughly one-quarter of all the answers we give at NAFCU come right out of the Official Staff Interpretation Sections.  Give or take.