NCUA Approves Annual Plan, Final Overdraft Fee Rules and Centralizes Policies for NCUA Supervisory Review Committee Processes

Jan. 13, 2011 — The National Credit Union Administration (NCUA) Board met January 13 for its first meeting of 2011. The Board addressed several issues, in addition to its regular insurance fund report.

JFinal Rule - Truth in Savings (Part 707)
First, the NCUA Board approved Final Rule Part 707, Truth in Savings. This rule is substantively identical to the Federal Reserve's final rule clarifying provisions addressing electronic disclosures of overdraft fees, overdraft fee terminology and retail sweep accounts. This rule was previously issued as an interim final rule which became fully effective Oct. 1, 2010. The final rule addresses credit union practices related to overdraft services, including balances disclosed to members through automated systems. It requires the terminology "total overdraft fees" in member statements both in the statement period and calendar year-to-date. Credit unions should already be in compliance with this amendment to TIS. You can view the final rule approved by the NCUA at this link.

JNCUA Annual Performance Budget 2011
The NCUA is required by the Office of Management and Budget (OMB) to develop and implement Annual Performance Budgets (annual plans) as a part of the performance management process. This annual plan is a supplement to NCUA's annual strategic plan. It provides near-term, agency wide direction for regional and office specific goals. The NCUA approved its annual plan with a focus on more than 10 objectives and priorities including monitoring credit union risk, improving the stability of the corporate system, increased communication to credit unions and enhanced training for examiners. You can view the approved annual plan at this link.

JInterim Final IRPS 11-1 - Supervisory Committee
The NCUA Board approved an interim final Internal Ruling and Policy Statement (IRPS) with a 30 day comment period that combines IRPS 95-1 and IRPS 02-1 and adds a new section regarding technical assistance grant reimbursements. The combining of the two IRPS clarifies the process for credit unions to appeal to NCUA's Supervisory Committee on material regulatory determinations. The new section of the IRPS details the process for appealing the denial of a reimbursement under the Technical Assistance Grants from the Community Development Revolving Loan Fund for Credit Unions. To see the IRPS, click here.

JInsurance Fund Report
Each month, the NCUA Chief Financial Officer Mary Ann Woodson provides a report on the National Credit Union Share Insurance Fund (NCUSIF). At the January meeting, estimates were provided for December 31, 2010, as the books on 2010 are not yet closed. The equity ratio for Dec. 31, 2010 is estimated to be 1.28 percent after the one percent in insured shares is collected from credit unions.

Woodson reported that 28 credit unions failed in 2010, the same number of failures as 2009. However, the 2010 failures cost the insured fund less than in 2009. Credit unions with a CAMEL rating of 4/5 totaled 368 at 2010 year end, up from 351 at year end 2009. CAMEL 4/5 credit unions represent 5.08 percent in insured shares. CAMEL 3 credit unions represent 18.10% in insured shares from 1,827 credit unions as of Dec. 31, 2010, as compared to 1,668 at the end of 2009. To view the insurance fund statistics, follow this link to NCUA's website.