|
 |
|
|
|
|
|
| Breakdown of newly finalized NCUA Rules |
|
In the latest action of the NCUA’s Deregulation Project, the agency has finalized 11 rules. Many of the rules make changes by removing outdated requirements or giving credit unions flexibility.
Suretyship and Guaranty; Segregated Deposit and Collateral – 12 CFR 701.20(c)(3) and 701.20(d): This final rule updates the regulation so credit unions no longer need to set aside funds or collateral from the member to cover the risk when they guarantee a member’s obligation.
• America’s Credit Unions supported the initial proposal and asked the NCUA to remove prescriptive requirements that required credit unions to maintain collateral thresholds of 100% or 110% of obligations. The final rule removes the requirement that a federal credit union obtains a segregated deposit sufficient to cover its potential liability and removes provisions that specify collateral requirements when federally insured credit unions act as surety and guarantor in order to provide those credit unions with more flexibility to serve member needs.
Limits on Loans to Other Credit Unions – 12 CFR 701.25(b): This final rule removes the requirement for a federal credit union board of directors to approve loans to other credit unions.
• America’s Credit Unions supported the proposed rule, maintaining that it will help reduce regulatory burden by eliminating an unnecessary requirement.
Notice of Termination of Excess Insurance Coverage – 12 CFR 741.5: This final rule removes the 30-day notice requirement prior to a credit union’s termination of excess share insurance coverage and instead requires federally insured credit unions to notify members some time before the excess of coverage.
• America’s Credit Unions supported the proposed amendment because it reduces regulatory and administrative burdens on federally insured credit unions, promotes flexibility so they can best serve their members, helps in meeting contractual obligations with private insurers, and promotes state-law compliance.
Requirements for Insurance – 12 CFR 741.10: This final rule was finalized as proposed and eliminates a notification requirement that federally-insured credit unions were already required to make as part of their agreement for maintaining federal share insurance.
• America’s Credit Unions supported the proposed rule, arguing it will help reduce regulatory burden for credit unions by eliminating an unnecessary regulation.
Purchase, Sale, and Pledge of Eligible Obligations – 12 CFR 701.23: This final rule amends the NCUA regulations to remove the prescriptive list of items that must be included in federal credit union written policies around the purchase, sale, and pledge of eligible obligations. The final rule also strikes the provision regarding conflicts of interest and compensation, which are also covered in credit union bylaws and other NCUA rules.
• America’s Credit Unions supported the amendment to remove prescriptive requirements, providing greater flexibility for federal credit unions to engage in an efficient and principles-based approach around eligible obligations without increasing safety and soundness risks.
Credit Union Service Contracts – 12 CFR 701.26: This final rule removes section 701.26 and amends section 721.3 to formally clarify that credit unions may serve as representatives in shared operational arrangements with other credit unions or organizations, minimizing compliance complexity by removing extraneous requirements.
• America’s Credit Unions supported the proposal and agreed that it was unnecessary for the agency to restate that federal credit unions have the power to enter contractual agreements to perform or engage in activities that are expressly authorized by the Federal Credit Union Act or are incidental in regulatory text.
Third-Party Servicing of Indirect Vehicle Loans – 12 CFR 701.21(h): This final rule removes two sections of regulations that limited a federally insured credit union’s purchases of indirect auto loans serviced by a third party to 50% of its net worth.
• America’s Credit Unions supported the proposed rule, noting that it will assist credit unions by reducing regulatory burden and empowering them to tailor their own policies to proactively respond to changes in the market.
Four of the rules—Chartering and Field of Membership for FCUs IRPS 08-2, Chartering and Field of Membership for FCUs IRPS 10-1, Chartering and Field of Membership for FCUs – IRPS 06-1, and Corporate Credit Unions—were finalized as proposed and rescind various regulations, all of which are already included in the Chartering and Field of Membership Manual. America’s Credit Unions supported these rules, agreeing that removing the redundant guidance would reduce confusion and allow credit unions to rely on one source for current chartering and field of membership requirements.
Copyright © 2024-2026 America's Credit Unions. (link) |
|
|
|
|
|
|
