May 27, 2016
Comment letters about the overhead transfer rate (OTR) methodology show two consistent messages – that change is needed, and that thanks to NCUA are in order, NASCUS President and CEO Lucy Ito wrote in an op-ed appearing this week in Credit Union Times. Ito pointed out that the comment letters filed voice a consistent message from the credit unions, trade groups and other stakeholders that change in how the OTR is determined and managed is in order. “With little or no exception, these letters urge the agency to make changes to the current system – and ensure a fair allocation of costs to both state and federally chartered credit unions,” Ito writes.
The NASCUS leader also pointed out that the letters consistently praise NCUA for bringing the issue up for comment. “The second consistent message contained in nearly every comment letter we saw (including ours): Sincere thanks and gratitude to the NCUA board for bringing up this issue for public comment. This was a big step for the agency, especially in terms of transparency -- and it is appreciated.”
Ito urged the NCUA board to take action soon on the issue. “Further, like many in the credit union system, we hope that this issue may be settled, once and for all, to the satisfaction of both state and federal credit unions, state regulators and the NCUA – and that the NCUA board takes action, soon.”
The overhead transfer rate is also on the radar screen of NCUA Board Chairman Rick Metsger as he indicated in a trade press interview published this week. On the website CUToday.info, Metsger stated that the agency’s “responsibility is to make sure (the transfer) is properly allocated.” He said that he would be talking about that “more over the next month.” However, the NCUA chairman also noted that “from the agency standpoint it’s a no-win situation.” In a separate interview, published by Credit Union Times, Metsger indicated that supplemental capital may also be receiving more scrutiny soon. According to the publication, he said the subject may be the subject “as early as July” for one of his recently initiated “staff briefings” for the NCUA Board. (NCUA Board Member Mark McWatters has also spoken out about the need to address supplemental capital, urging that an “advisory committee” of stakeholders be set up on the issue to consult with the agency as it proceeds with any rulemaking.)
Extended call report deadlines for the second and third quarters of the year will give credit unions three additional calendar days to file the reports, NCUA announced this week. Second-quarter reports are now due by 11:59:59 p.m. ET Monday, July 25 (extended from Friday, July 22); third-quarter reports will now be due by 11:59:59 p.m. ET Monday, Oct. 24 (extended from Friday, Oct. 21). In a release, NCUA Board Chairman Rick Metsger stated that moving the deadlines is the first step in the agency’s effort to improve data collection. He said the agency is working on a study about a future deadline closer to that for commercial banks, but which “preserves the key role NCUA’s examiners fill in the validation process.” Last week, the agency announced it will conduct a comprehensive review and modernization of call report and Credit Union Profile content, gathering information through a 60-day public comment-period and creating an internal working group that will consult with stakeholders. Meanwhile, some credit unions and trade groups are saying the time extension is not long enough, and the agency should consider giving credit unions up to the end of each month to file.
On top of the call report deadline changes, Metsger announced Thursday he is seeking input from stakeholders on the exam process, looking forward to a “thoughtful dialog.” Dubbing his effort the “Exam Flexibility Initiative,” Metsger, in a release, stated the agency seeks input on five broad questions:
• How can NCUA conduct future examinations in ways that minimize their impact on credit unions’ operations?
• What concerns do credit unions have about the current examination and supervision program?
• What steps should NCUA take to improve the efficiency of its examination program while ensuring it remains effective?
• How can NCUA better use technology in examinations?
• What metrics should NCUA consider to determine a credit union’s eligibility for an extended examination cycle?
Metsger said the agency has set up an email box (ExamFlexibility@ncua.gov) for stakeholders to provide comments, as well as a website for more information about the initiative. NASCUS’ Lucy Ito urged state regulators and credit unions to offer their comments (and to share them with NASCUS).
If cybersecurity is on your list of “must address” for 2016, take heart – the NASCUS/CUNA Cybersecurity Symposium, Aug. 1-2 in Chicago, is fast approaching. The two-day event, held at the Westin Chicago River North Hotel, picks up where the first two popular annual programs (in 2014 and 2015) left off, with an emphasis on cutting-edge techniques, best practices and procedures that protect credit union organizations from the latest threats. The 2016 program includes more than 13 hours of educational presentations, discussions, demonstrations and panel/group discussions led by cybersecurity experts from across the nation. Among the topics to be addressed: Understanding the laws protecting members’ information; choosing the right cybersecurity risk assessment tool; cybersecurity, anti-money laundering, and identity theft red flags; rightsizing the cybersecurity budget; Is it safe? Using the cloud – and much more. Leading the program again this year is Tom Schauer of CliftonLarsonAllen in Seattle (formerly CEO of TrustCC).Registration – which is open now for the two-day program -- is $895 for NASCUS- and CUNA-member organizations; registration for non-NASCUS/CUNA members is $1,095.
Five NASCUS Directors’ Colleges – in five locations around the country -- are now on the association’s education agenda, giving credit union directors and senior staff multiple opportunities to hear first-hand from state regulators and learn of their expectations of credit union directors, and the issues that directors will confront. Typically, each College is a day long, and features discussion on such issues as Bank Security Act (BSA) requirements, cyber security, succession planning, interest rate risk, national issues and more. In addition to hearing from regulators and in-depth briefings about issues, the Colleges have become a unique opportunity for credit union directors to network and share board experiences. Directors’ Colleges scheduled include: July 14 (for MA, NH and RI); July 21 (for WI); Sept. 27 (for CO), Nov. 10 (for TX) and Dec. 1 (for KY). See the link below for registration and more details.
NCUA issued a revised board schedule for 2016, with open meetings set for the following dates: June 16, July 21, Sept. 15, Oct. 27, Nov. 17 and Dec. 15. The board does not meet in August. All meetings are scheduled for 10 a.m. Eastern … The agency has named Kelly Lay its new business innovations director, responsible for management of the Enterprise Solutions Modernization program aimed at upgrading NCUA’s information technology capacity, policies and practices. Formerly Region II associate regional director of programs, she starts her new job Tuesday (May 31) …. Here’s to a restful, safe and memorable Memorial Day weekend to everyone!
Patrick Keefe, NASCUS Communications, email@example.com or (703) 528-5974