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The NCUA Board Thursday issued a final rule amending the definition of service facilities for multiple common bond (MCB) federal credit unions (FCUs) in the chartering and Field of Membership Manual. Of note, the definition provides that any shared location is considered a service facility, regardless of ownership in the shared branching network, one of the changes NAFCU supported in the past. However, the Board did not expand the definition to include ATMs for the purpose of underserved area expansion and refused to consider including online and mobile banking platforms in the definition at this time.

“NAFCU is disappointed in the NCUA’s decision to exclude ATMs under the definition of a service facility in its rule,” said NAFCU Vice President of Regulatory Affairs Ann Kossachev in response to the rule. “This final rule falls short in helping credit unions, especially smaller institutions, to provide products and services to their communities, including disadvantaged populations that are often left behind by big banks.

“We also believe that it is critical for online and mobile banking platforms to be recognized as service facilities as technologies continue to evolve and consumer needs and demands change,” added Kossachev. “A legislative change may be necessary to achieve this, and we look forward to working with Congress to help credit unions better serve their communities and stay competitive.”

In addition, the Board unanimously approved the NCUA’s Draft Strategic Plan for 2022-2026, which includes the agency’s strategic goals. Comments on the NCUA’s plan are due within a 60-day period. 

The Board also received several briefings:

• The NCUA’s modernized examination tools: NCUA staff highlighted the agency’s modernized examination tools, including the data exchange application (DEXA), a new, required loan and share mapping tool targeted at helping data visualizations for examiners. NAFCU has asked the NCUA to provide greater transparency on exam modernization efforts, seeking feedback from credit unions to provide clearer guidance on expectations from their examiners.
• The NCUA’s response to the COVID-19 crisis: The NCUA board received updates on the recent extension to virtual annual meeting flexibilities through 2022, of which NAFCU has been supportive. NCUA staff also detailed expiring flexibilities regarding the Central Liquidity Facility (CLF), prompt corrective action (PCA) relief, and loan participation and eligible obligation relief. NAFCU has urged the NCUA to increase or make permanent the loan participation cap.
• Share Insurance Fund (SIF) Quarterly Report: quarterly report SIF had net income of $58.6 million and $20.9 billion in assets in the third quarter. The report also revealed six credit union failures caused $4.8 million in losses to the SIF. The equity ratio is 1.23 percent, and is projected to be 1.28 percent at the end of the year. The Board did not vote to assess a premium at this time. NAFCU has continuously encouraged the NCUA against a premium assessment in 2021 due to the unprecedented share growth and hardships because of the pandemic, instead asking the NCUA to grant additional investment authority to federal credit unions. 

Stay tuned to NAFCU Today for the latest on the NCUA.