Proposed Regulations

On September 24, 2003, NCUA issued a proposed rule updating its rule regarding the conversion of insured credit unions to mutual savings banks. The proposed rule seeks to increase disclosure requirements to ensure that the credit union's notice of conversion to its members provides full disclosure and transparency

On March 27, 2003, the National Credit Union Administration published proposed revisions to the member business loan regulation and related provisions in the prompt corrective action, corporate credit union, and credit union service organization rules.

As required by the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), the proposed regulation improves the notice that informs consumers of their right to opt-out of prescreened solicitations for credit or insurance. The proposed rule: 1) establishes certain baseline requirements for language and syntax that effectively convey the intended message to the reader, and 2) establishes guidelines for presentation and format that call attention to the notice and enhance its readability.

The proposed amendments are meant to clarify the relationship between the prior notice provision and the commencement of service provision, so as to eliminate potential confusion. Additionally, the amendments attempt to reorganize the requirements in the current rule making it easier to understand.

Recently, the Federal Reserve Board (Board) issued a notice of study and request for information regarding disclosure practices with regard to debit card purchases. Specifically, the Board is concerned about fees imposed in point-of-sale (POS) debit transactions when customers provide their personal identification number (PIN). The current rules governing fee disclosure are the Electronic Fund Transfers Act (EFTA), and Regulation E.

The proposed rule will authorize all federal credit unions and corporate credit unions to invest in exchangeable collateralized mortgage obligations representing interests in one or more stripped mortgage backed securities, subject to safety and soundness concerns. Additionally, the proposed rule contains miscellaneous technical revisions and clarifications to Part 703 and Part 704.

Recently, the National Credit Union Administration(NCUA) proposed to add a new part 796 to NCUA rules and regulations that implements new, post-employment restrictions for certain senior NCUA examiners. The proposed rules prohibit senior NCUA examiners from employment with a credit union for one year if the examiner had continuing, broad responsibility for examination of that credit union for two or more months during the examiner's last twelve months of employment.

Recently, the National Credit Union Administration (NCUA) proposed to amend its rule on fidelity bonds. The proposed amendment would increase the maximum allowable deductible, currently $200,000, and alter the minimum required coverage; NCUA also proposes to discontinue the practice of posting approved bonds in the rule, but to continue listing and updating them on its website.

Recently, the National Credit Union Administration (NCUA) published a request for comments and suggestions on ways it can identify and reduce regulatory burden with respect to safety and soundness and anti-money laundering regulations that may be outdated, unnecessary, or unduly burdensome. This notice is a part of the regulatory review required by section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). In fulfilling the requirements of the EGRPRA, NCUA desires to reduce regulatory burden while ensuring the continued safety and soundness of federally insured credit unions and appropriate consumer protections.

On July 20, 2006, NCUA published a proposed rule to amend its rules and regulations regarding federal credit union (FCU) investments in mortgage note repurchase transactions. Current regulations prohibit FCUs from investing in first-lien mortgages other than to complete a pool of loans to be sold on the secondary market. The proposed amendment would expand FCU permissible investments to include repurchase transactions in which the instrument consists of first-lien mortgage notes, if certain conditions are met.

Recently, the National Credit Union Administration (NCUA) issued an advance notice of proposed rulemaking requesting comments on whether and how to modify its rules regarding Supervisory Committee audit rules.

Recently, the Small Business Administration (SBA) issued a proposed rule to incorporate its risk-based lender oversight program into SBA regulations in order to provide for a more coordinated and effective oversight of financial institutions originating and managing SBA guaranteed loans.

Recently, the National Credit Union Administration (NCUA) issued for public comment proposed amendments to §701.23 of its rules and regulations. Specifically, the proposal would add a conflict of interest provision in order to help ensure that decisions regarding the purchase, sale, and pledge of eligible obligations are made in the best interest of the credit union.

Today, the Department of Defense (DoD) published in the Federal Register a proposed rule to implement the consumer protections included in Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Defense Act), Public Law 109-364; 10 U.S.C. § 987. The proposed rule is intended to regulate the terms of consumer credit extended by creditors to active duty service members and their dependents.

On January 8, 2006, the Department of Housing and Urban Development (HUD) issued a proposed rule regarding home equity conversion mortgage (HECM) counseling. The proposed rule would establish testing standards to qualify individuals as HECM counselors, establish a roster of eligible HECM counselors, and provide for their removal for cause.

The proposed IRPS provides guidance to FICUs regarding the actions prohibited by the statute, and also contains procedures for applying for consent by the NCUA Board.

The proposed rule would prohibit seven credit card practices: (1) Unfair time constraints for consumers to make payments; (2) Unfair allocation of payments among balances with different interest rates; (3) Unfair application of increased APR to outstanding balances; (4) Unfair fees for exceeding the credit limit solely because of a hold placed on an account; (5) Unfair balance computation method; (6) Unfair financing of security deposits and fees for issuance or availability of credit; and (7) Deceptive firm offers of credit.

The proposal would amend the definition of “unauthorized entry” to clarify that a purported authorization that is unclear or deceptive is not a valid authorization.

In September 2005, the eRulemaking program launched the Federal Docket Management System (FDMS), greatly expanding public access to information and improving agency management of the rulemaking process. FDMS serves as an electronic document repository, enabling departments and agencies to post all rulemaking and non-rulemaking documents for public access and comment.

The proposed rule will exclude investments made under the Credit Union System Investment Program (CU SIP) and the Credit Union Homeowners Affordability Relief Program (CU HARP) from the calculation for total assets.

Recently, the National Credit Union Administration (NCUA) issued an interim final rule providing an exception to the 20-year maturity limit on second mortgages for federal credit unions that participate in the U.S. Department of Treasury's Making Home Affordable Program.