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NCUA Board to discuss public unit and nonmember shares, FOM
The NCUA Board next week is set to issue a final rule on public unit and nonmember shares, and a notice of public rulemaking on chartering and field of membership (FOM). The board will also receive a briefing on cybersecurity; October is National Cybersecurity Awareness Month and the agency provided credit unions with resources to stay vigilant.
Public unit and nonmember shares
NAFCU is generally supportive of the NCUA's proposal to allow federal credit unions (FCUs) to receive public unit and nonmember shares up to 50 percent of paid-in and unimpaired capital and surplus less than any public unit and nonmember shares.
While the proposed rule would eliminate the waiver option in exchange for a higher general limit and modify the method by which the limit is measured, NAFCU recommended that the NCUA retain the alternative dollar limit and consider increasing it to at least $5 million to ensure that smaller credit unions that rely on a large volume of nonmember shares obtain relief.
The proposal was included in a list of priority recommendations offered by the NCUA's Regulatory Reform Task Force, many of which NAFCU discussed with NCUA Board Chairman Rodney Hood in May.
Chartering and field of membership
Earlier this month, the American Bankers Association filed a petition with the U.S. Court of Appeals for the D.C. Circuit for an en banc rehearing of its lawsuit challenging the NCUA's 2016 FOM rule. The appeals court had previously issued a decision largely in favor of the NCUA on key issues in the lawsuit - including, the agency's authority to issue the rule - via a three-judge panel in August. NAFCU will continue to support the agency in the lawsuit.
In addition, the agency last year finalized a rule that further reformed FOM rules. Details of the notice of public rulemaking will be released at the start of the NCUA Board meeting Thursday.
NAFCU has urged the NCUA to modernize FOM rules and continues to defend the credit union industry and its growth. The association acknowledges that legislation is necessary to relax aspects of the Federal Credit Union Act's limitations on chartering, but believes that the agency can enact constructive regulatory relief by streamlining its chartering and FOM procedures, as well as by removing all non-statutory constraints on FOM chartering and expansion.
NAFCU will attend next week's meeting and update credit unions via NAFCU Today.