COMMENTS ON TODAY’S NCUA BOARD MEETING BY NASCUS’ LUCY ITO (Oct. 15)

OCT. 15

COMMENTS ON TODAY’S (Oct. 15) NCUA BOARD MEETING BY NASCUS’ LUCY ITO

Corporate rule changes praised; look to states for insights on derivative regulation

NASCUS President and CEO Lucy commented on two actions taken today at the NCUA Board meeting: on the board’s approving a final rule on corporate credit unions, and issuing a proposal to revise provisions of the agency’s rule on derivatives.

ON THE CORPORATE CREDIT UNION FINAL RULE

“Broadening eligibility of natural person credit union senior staff to serve as board members should expand access to highly relevant expertise among the nation’s corporate credit unions – six of which — out of a total of 11 – are state-chartered. The state system strongly supported this change.”

“Enabling corporate CUs to make minimal investments in a CUSO without triggering a ‘corporate CUSO’ classification should enable the credit union system to stay abreast of broader fintech developments.”

“The state credit union system looks forward to discussion with the agency about corporate credit union participation in subordinated debt as the agency moves toward a final rule on the subject.”

ON THE PROPOSED REVISIONS TO THE DERIVATIVES RULE

“State credit union derivative authority properly rests with state supervisors, who have extensive experience with derivatives and interest rate swaps both in state-chartered credit unions and community banks.”

“The state system looks forward to assisting NCUA in raising awareness of derivative oversight in the broader credit union system by bringing state regulator credit union experience and lessons to the learning table.”

“NCUA’s move to streamline its regulation in the area is pro-active in anticipation of increased interest rate risk given current low-rate environment and likely long-term rate increases.”