Compliance Blog

Written by JiJi Bahhur, Director of Regulatory Compliance

It would be nearly impossible to cover every piece of news that drops in any single month, but we try our best to cover as many notable items that may impact credit unions here on NAFCU’s Compliance Blog.  Today, I’d like to point to a few items that we did not have a chance to mention during the busy month of October.

NCUA Guidance on DORs and Exam Findings.  NCUA issued Letter to Credit Unions 13-CU-09 to streamline the examination report and clarify for federally insured credit unions the difference between a document of resolution and examiner findings.  New processes related to issuing and following up on the examination report are also being implemented by the agency.  Under the new process, examiners are now required to follow up with credit union officials on outstanding DOR items within 120 days after the timeframe for completion has passed.  The changes to the examination report and the new processes are contained in the agency’s revised National Supervision Program Manual.  The agency stated that full implementation will begin with examinations that start after January 1, 2014.

Electronic Filings.  NCUA issued a final rule, effective January 1, 2014, that requires all federally insured credit unions to file quarterly call reports and profile data electronically using NCUA’s information management system or other electronic means specified by the agency.  Manual filing of this information is no longer an option for federally insured credit unions. NCUA guidance and the extended call report deadlines for 2014 are available in Letter to Credit Unions 13-CU-11.

No Share Insurance Premium for 2013. Announced during the October NCUA Board meeting, insured credit unions will not be assessed a share insurance premium for 2013.  The NCUSIF ended September at a ratio equal to 1.31 percent of insured shares, above the statutory minimum of 1.2 percent. If the fund ends the year above that level, any excess would be transferred to the Temporary Corporate Credit Union Stabilization Fund. The NCUSIF's year-to-date net income was $110.3 million; a negative $25 million was budgeted this year.

Flood Hazard Interagency Proposal.  The NCUA Board issued an interagency proposed rule regarding loans in areas having special flood hazards.  The proposal amends the agency’s regulations on federal flood insurance to implement provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters).  It establishes: 1) that regulated lending institutions must accept “private flood insurance,” as defined in Biggert-Waters, as satisfaction of the flood insurance requirement;  2) an expansion of the escrow requirement for flood insurance payments to all residential loans secured by residential real estate; and 3) a clarification of the provisions relating to force placement of flood insurance.  A Regulatory Alert with an analysis of the proposal will be provided to NAFCU members.  Currently, existing guidance that NCUA has issued still applies to credit unions.

 ***

 Have a great weekend!