Compliance Blog

Written by Bernadette Clair, Senior Regulatory Compliance Counsel

NCUA Board Meeting. Last week, the NCUA Board held its February open meeting. The following two agenda items were approved 3-0:

1. ​Proposed IRPS 15-1 and Proposed Rule, Part 791.8(a) of NCUA’s Rules and Regulations, Regulatory Flexibility Act Definition of Small Entity for Consideration of Regulatory Relief.
2. Taunton Federal Credit Union (Taunton, MA), Request to Expand Community Charter.

With regard to the first item, The NCUA Board approved a proposed rule that would revise the “small entity” designation under the Regulatory Flexibility Act by increasing the defining threshold to include federally insured credit unions with less than $100 million in assets. The current rule imposes a $50 million threshold. Comments on NCUA’s proposed rule and IRPS 15-1 will be due to the agency 60 days after publication in the Federal Register. NAFCU is preparing a Regulatory Alert for members, which will be available here.

The NCUA Board was also briefed on the agency’s ongoing field-of-membership working group. NCUA staff advised that the working group, which is comprised of internal NCUA staff, has inventoried the issues that need to be addressed as: (1) procedural; (2) regulatory; and (3) legislative. The procedural and regulatory issues will be presented to the NCUA Board for its action. NCUA staff also explained that the working group will begin reaching out to credit union stakeholders next month for their input. NAFCU has been working closely with the agency to include our members on the working group.

Finally, the NCUA Board was briefed about the state of the National Credit Union Share Insurance Fund (NCUSIF).

NCUA’s Board Action Bulletin is available here.

***

NCUA-SBA Partnership. Earlier this month, NCUA announced a partnership with the Small Business Administration (SBA) for a series of educational initiatives during the next three years aimed at helping small businesses connect with their local credit unions for better access to capital.

The first initiative of the new partnership will be a joint webinar entitled “Balancing Member Business Loan Portfolios with SBA Guarantees,” on March 4, 2015, at 2 p.m. Eastern.  Registration is available here.  Participants can submit questions in advance via email at WebinarQuestions@ncua.gov, and should include the subject line “SBA Guarantees Webinar.”

Last week, NCUA also announced a new “Small Business Lending Resource Center” webpage designed to provide information about NCUA’s member business lending rules, supervisory guidance, links to the SBA’s loan programs, and other resources.

***

February NCUA Report. NCUA also recently released its February 2014 Report. One article in particular caught my eye – the Region V Report: Consider an Asset-Liability Management Committee to Help with Interest Rate Risk. The article discusses some of the reasons NCUA thinks credit unions should consider using an Asset Liability Management (ALM) Committee to review interest rate exposure. From the article:

“While not required in NCUA’s regulations, our experience has shown that a committee like this can be a useful best practice for credit unions with a concentration of mortgage-related investments and loans.

An Asset-Liability Management Committee oversees the board-approved asset and liability management policy for the credit union. These committees are staffed by members of the credit union’s board and staff from across a credit union’s business lines. The committee evaluates and monitors all of the variables that could affect a credit union’s interest rate risk position, such as its internal controls, cash flows, maturity schedules, and how it implements its risk-management policies.”

The article includes links to various guidance documents on managing interest rate risk (IRR), and is available in its entirety here.  Speaking of IRR, my colleague JiJi recently blogged about NCUA’s IRR rule, currently available guidance, and what may be coming down the pike.

***

NAFCU Webcast. Regulation Z: Five Challenges and Their Solutions – The Truth in Lending Act (TILA), as implemented by Regulation Z, is the oldest federal consumer credit law. While it's important to stay up-to-date on the latest changes, it's just as important not to overlook some of its fundamental principles.  Register here for this NAFCU webcast for a refresher on five core issues that arise across product types and how to address them. You'll gain a greater understanding of: what is and is not a finance charge, Regulation Z's rules for calculating annual percentage rates, how to satisfy Regulation Z's advertising requirements, the difficulties that can arise when disclosing variable rates, and how to meet the operational challenge of ensuring that Regulation Z disclosures are correctly completed.