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NAFCU writes to NCUA on simplification of share insurance rules
NAFCU Senior Regulatory Affairs Counsel James Akin wrote to the NCUA Tuesday regarding the agency’s proposed amendments for regulations governing share insurance coverage. In the letter, Akin expressed support for proposed amendments simplifying share insurance rules but urged the agency to implement a phased approach and provide support for credit unions.
Akin noted NAFCU’s support for creating a "trust accounts" category for both revocable and irrevocable trusts. He also thanked the agency for aligning its proposal with the FDIC’s regulations, creating parity for insurance systems. However, Akin explained that “NAFCU believes that there may be instances where accountholders lack the necessary information to calculate share insurance coverage under the new rule.”
Regarding the proposed amendments to regulations regarding mortgage servicing accounts (MSAs), Akin highlighted NAFCU’s support for consistent share insurance treatment of MSAs. Additionally, he noted that the amendment “simplifies the insurance coverage determination for MSAs, making it easier for credit unions to understand and apply the rules. The inclusion of funds paid by mortgagors for taxes and insurance premiums in the insurance coverage further clarifies the extent of protection available under these accounts.” He urged the NCUA to provide additional clarity, “enabling credit unions to manage MSAs more efficiently and with greater confidence in their compliance efforts.”
Akin concluded the letter by cautioning the NCUA to provide sufficient time when from adopting the FDIC’s record keeping rules but noted NAFCU’s appreciation for the proposal’s improvements in recordkeeping requirements, especially for agents, fiduciaries, and third parties. He also called attention to the potential uneven impact on smaller credit unions and suggested a phased approach.