NCUA Issues Final Appraisal Rule and EGRPRA Comment Notice at December Board Meeting
December 11, 2014 – The National Credit Union Administration (NCUA) Board held its final open meeting of 2014 on Thursday. During the meeting, the Board approved a final appraisal rule, published a Notice and Request for Comment under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), and approved the 2015 budget for the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund). NCUA Board Chairman Debbie Matz also announced that NCUA will establish two working groups on issues relating to field of membership and “secondary capital.”
The final appraisal rule makes three changes to NCUA’s regulations regarding appraisals. Two of the changes, a change to the definition of “application” in Part 701.31(a)(1) and the elimination of the now duplicative requirement that federal credit unions make available a copy of the appraisal used in loan secured by a first lien on a dwelling in Part 701.31(c)(5), apply only to federal credit unions. The provision became duplicative when the Consumer Financial Protection Bureau promulgated a similar rule. However, the third appraisal related change does apply to federally insured state chartered credit unions (FISCUs). NCUA is also amending Part 722.3(a)(5) by expanding the rule’s current exemptions from the appraisal requirements to allow a federally insured credit union to modify or refinance a real estate loan without a new appraisal if no new monies are being advanced or with new monies being advanced with adequate collateral protection. This rule applies to FISCUs by reference in Part 741.203(b).
Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA)
The Board approved publication of a Notice and Request for Comment for a second round of EGRPRA comments, covering 17 rules related to agency programs, capital and consumer protection. Among the notable rules covered in this round of comments are Prompt Corrective Action, LICU provisions, uninsured shares, corporate credit unions, golden parachutes, BSA, lending, Supervisory committee audits, and all of Sub-Part B of Part 741.
NASCUS filed comments on the first round of EGRPRA comments and will be submitting comments during this phase of the review as well. NCUA stated that there would be two additional rounds of comments in 2015. Comments will be due to NCUA 90 days after the proposal is published in the Federal Register.
2015 Stabilization Fund Budget
he Board approved a proposed $4,121,519 budget for the Temporary Corporate Credit Union Stabilization Fund for 2015. The 2015 budget represents an 8.9% reduction from the 2014 budget. NCUA credited increased expertise on staff, leading to a reduction in the need for outside contractors to manage the program, for the reduction.
NCUA Working Groups
Matz announced that NCUA will be forming two working groups comprised of NCUA staff and credit union system representatives to work on two initiatives. NCUA’s Office of Consumer Protection will lead a field-of-membership working group that will consider suggestions for enhancing the federal charter. The Office of Small Credit Union Initiatives will lead the “secondary capital” working group that will consider ideas for raising the value of “secondary capital” for low-income credit unions. NASCUS has been a long-time proponent of supplemental capital and capital reform for credit unions and will seek to work with NCUA on this initiative.