NASCUS Files Comments On Round Two of EGRPRA

March 23, 2015 – NASCUS filed comments with NCUA in response to the agency’s second round of requests for comments under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA).

In this round of EGRPRA notice and comment, NCUA sought comments on the Community Development Loan Programs, the Central Liquidity Facility, and the designation of low-income. NCUA also sought comments on Prompt Corrective Action and several consumer protection regulations, including Truth in Savings, Share Insurance and Advertising, among others.

NASCUS commended NCUA for participating in the EGRPRA review, and submitted numerous recommendations to improve the federal regulatory framework for credit unions. In particular, NASCUS sought to streamline the process by which federally insured state-chartered credit unions (FISCUs) applied for and obtained low income designation and loans pursuant to the Community Development Loan Program. NASCUS made several additional recommendations for improving the process related to a low-income credit union’s retention of its designation, and encouraged NCUA to expand the possible instruments that might be unutilized as secondary capital.

Noting that it would be filing extensive comments in response to NCUA’s separate comment notices for Risk Based Capital and Capital Planning and Stress Testing, NASCUS urged NCUA to seek the statutory changes that would make secondary capital an option for all natural person credit unions. NASCUS also urged NCUA to redefine “complex” as at least $500 million in assets if the agency insisted on retaining a mere asset threshold test.

NASCUS also recommended NCUA reorganize its rules to reduce regulatory burden for FISCUs. NASCUS noted that FISCUs must currently search through all of NCUA’s rules in determining what insurance rules apply, and noted that NCUA’s incorporated references in Part 741 are often ambiguous. To provide meaningful regulatory modernization, NASCUS urged NCUA to consolidate rules applicable to FISCUs.

The EGRPRA requires the federal banking agencies, Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) to review their regulations to identify outdated, unnecessary, or unduly burdensome requirements imposed on insured depository institutions. The review takes place once every 10 years.

While NCUA is not required to participate in the EGRPRA review, the agency is voluntarily participating with the federal banking agencies.

For more information on NASCUS’ comments, or the EGRPRA, please contact Elizabeth Kirkland, at elizabeth@nascus.org.

 

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