NCUA Approves New Corporate Regulations Without Two Controversial Provisions
April 21, 2011 The National Credit Union Administration (NCUA) Board approved a set of changes to Part 704, Corporate Credit Unions, absent the proposed provisions to limit natural person credit unions to one corporate and the sharing of corporate stabilization expenses among all members of corporates.
The final rule includes five new requirements for all corporate credit unions.
- Require corporates to conduct all board of director votes as recorded votes and include the votes of individual directors in the meeting minutes;
- Require certain audit, reporting, and audit committee practices from the Federal Deposit Insurance Act (FDI Act), Part 363 of the Federal Deposit Insurance Corporation (FDIC) Regulations, and the Sarbanes-Oxley Act of 2002;
- Require corporates to establish enterprise-wide risk management committees staffed with at least one independent risk management expert;
- Allow corporates to charge their members reasonable one-time or periodic membership fees; and
- Require the disclosure of compensation received from a corporate CUSO by certain highly compensated corporate credit union executives.
The above provisions were approved with few changes from the proposal. Regarding the enterprise risk management provisions, NCUA delayed the effective date for 24 months to give corporates time to enact the new requirements. In the area of board votes, the final rule requires recorded “no” or “abstain” votes and not all votes, as long as all meeting attendees are recorded in the minutes.
NASCUS and state regulators continue to work closely with NCUA throughout the corporate stabilization process and accompanying rulemaking. NASCUS filed a detailed comment letter on this proposal that can be read here. The final rule can be downloaded here from NCUA’s website.