Proposed Regulations

Recently, NCUA published proposed rules regarding share insurance, which are intended to simplify and clarify current regulations and provide parity with the deposit insurance rules of the Federal Deposit Insurance Corporation.

The Internal Revenue Service (IRS) has issued a notice of proposed rulemaking containing proposed amendments to income tax regulations promulgated under section 403(b) of the Internal Revenue Code (IRC) and related sections 402(b), 402(g), 414(c), and 3121(a)(5)(D). The proposed regulations provide updated guidance on section 403(b) contracts of public schools and organizations exempt from tax under 501(c)(3).

Recently, the National Credit Union Administration (NCUA) published a proposed rule to part 708a regarding the conversion of insured credit unions to mutual savings banks. The proposed amendments stem from NCUA's concern that many credit union members do not appreciate the effect a conversion may have on their ownership interests in the credit union and voting power in the mutual savings bank.

Section 318(a) of the Fair and Accurate Credit Transactions Act (FACT Act) requires the Federal Trade Commission (Commission) to conduct a study on the effects of requiring a creditor or a credit bureau to provide a consumer who has experienced an adverse action based on a credit report with a copy of the same credit report that was relied on in taking the adverse action.

Recently, the National Credit Union Administration (NCUA) issued a proposed rule to implement Section 411 of the Fair and Accurate Credit Transactions Act (FACT Act). Pub. L. 108-159, 117 Stat. 152.

NAFCU submitted comments in regard to the guidance. In October 2005, the IRS issued proposed regulations based on the comments it received. In December 2005, the IRS issued some corrections regarding the proposed rules.

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.