In this issue:
NCUA Proposes Possible Rule Changes
The National Credit Union Administration (NCUA) seeks comments on a proposed four-year regulatory reform agenda. This regulatory reform agenda, published in the August 22, 2017 Federal Register, reflects a comprehensive look at all of the NCUA’s existing regulations to determine if any might be eliminated, revised, improved, or clarified. The report prioritizes recommended changes into three tiers based on the perceived “degree of impact” and “degree of effort”. It envisions that first-tier recommendations would be accomplished within a two-year time frame and suggests a long list of changes including, among others: (i) clarifying and updating loan maturity limits and compensation in connection with loans; (ii) clarifying lending limits and rules concerning loans to one borrower; (iii) raising appraisal thresholds and relieving some appraisal burdens; (iv) establishing a single, comprehensive set of rules for third-party servicing of indirect vehicle loans; (v) modernizing corporate rules, including changes to standard bylaws provisions; (vi) updating some charter and field of membership rules, particularly for community charters; and (vii) adding flexibility, including in connection with fidelity insurance and supervisory committee requirements. The second-tier recommendations, which are targeted for implementation during the third year of the proposed four-year time frame, include among other changes: (i) removing limits on the aggregate permitted amount of loan participations; (ii) removing, combining, and simplifying the authority to purchase loans and other assets; (iii) addressing some capital requirements; and (iv) easing restrictions on investment activities. Finally, the third-tier recommendations, which are targeted for implementation during the last year in the four-year time frame, include among other changes: (i) implementing comprehensive third-party due diligence rules; (ii) enhancing federal preemption to reduce overlap with state laws and regulatory burdens; (iii) establishing a maximum interest rate based on a variable rate rather than using a fixed, temporary rate; and (iv) conducting a review of regulations pertaining to security programs, suspected crimes and transactions reporting, catastrophic acts, and Bank Secrecy Act compliance. If any of these subjects are of interest to your credit union, consider commenting on the proposals. Comments are due to the NCUA on or before November 20, 2017. If you would like to discuss these proposed rules changes in greater detail, please contact Margie Corwin.