Oct. 30, 2015 NASCUS Report | NASCUS


Oct. 30, 2015

NOTE: This report contains updated information from the Oct. 30 “open forum” held by the NCUA, and is thus updated from the report distributed Friday morning via email.

Forum touches on OTR, alternating exams, 18-mo. cycle
A 70-minute “open forum” hosted by NCUA Board Chairman Debbie Matz Friday touched on the overhead transfer rate, an 18-month exam cycle, alternating exams with state authorities, the agency’s budget and other issues brought by credit union, vendor and trade association representatives attending the session.

At the opening of the session, Matz told the participants that beginning this year NCUA would be moving to a two-year budget cycle, which, she noted, is something the agency practiced before the onset of the financial crisis. With regard to the upcoming year's budget, Matz said she is "hopeful" to eliminate some “full-time equivalent” (FTE) positions at the agency.
Among issues discussed at open forum:

  • Overhead transfer rate: When asked if the agency had a “goal of reducing the OTR to 50%,” the NCUA Chairman responded the agency has “no goal” on the number for the OTR.“We’re really just plugging in the numbers,” she added. “We’re indifferent.” NCUA Director of Examination and Insurance Larry Fazio added that they agency is not “shooting for just a number, but a fair method” for determining the OTR. Matz also reiterated that the board will be voting in January on publishing – for public comment – the OTR methodology in the Federal Register.
  • 18-month exam cycle: Matz told the group that it was her preference to give the regulatory relief initiatives of the agency more time to take effect before commiting to a longer exam cycle. “I’m not saying no, just that this is not the right time,” she said.
  • Alternating exams with state authorities: NCUA Director of Examination and Insurance Larry Fazio said the agency would “take that idea back to state regulators” at the next venue. (NASCUS and NCUA’s next interagency dialogue session is set for March in Chicago.)
  • Member business lending rule: After credit union representatives expressed concern that the new, proposed rule should be accompanied sufficient training and guidelines for examiners, Matz noted that the agency intended to provide “intensive training” for the examiner corps. “There’s been quite a bit of angst among the examiners,” she said, noting that the “principle-based” approach of the rule is something new for most of them. Fazio also noted that the agency intends to provide extensive supervisory guidance, which would include what he termed as “guideposts” for examiners as they review credit union commercial lending programs.
  • FOM modernization: Matz confirmed that a proposed rule modernizing the agency’s field of membership rules should be out by January –also noting that the proposal “should be interesting.”

The event, scheduled for two hours, lasted just over an hour; about 10 questions in total were posed to Matz and NCUA officials from the in-person audience.

New regulator named in CO
Patricia Salazar is the new Colorado commissioner of financial services and director of the division of financial services, bringing with her some solid background in credit unions and their issues. She takes the position Nov. 12, replacing Mark Valente, who had been serving as acting commissioner since June, when incumbent Chris Mykelbust as named State Bank Commissioner. Valente will resume his previous position as deputy commissioner Nov. 12. Salazar was most recently deputy commissioner of the California Department of Business Oversight. Before that, she served as the state legislative and regulatory lobbyist for the California and Nevada Credit Union Leagues and, prior to that, served as a consultant to the leagues on public affairs and strategies related to federal and state legislation affecting the credit union industry. As NASCUS President and CEO Lucy Ito noted, she has a terrific background in credit unions and their issues, and her feet are firmly in place with regard to public policy committed to credit union safety and soundness.

Results of elections to NASCUS Board, CU Council announced
Two have been elected to seats on the NASCUS board, and another appointed, as the result of recent elections. Elections and appointments have also been made to the NASCUS Credit Union Advisory Council. Mary Ellen O’Neill and John Kolhoff were both elected to three-year terms on the NASCUS Board. O’Neill – who was re-elected to a seat on the board (and is also the chairman-elect of the association) – is the director of the financial institution division of the Connecticut Department of Banking. Kolhoff is the director, office of credit unions, for the Michigan Department of Insurance and Financial Services. Additionally, Tamilee Smull, manager of the credit union division of the Arizona Department of Financial Institutions, has been appointed by NASCUS Chairman Steve Pleger to a one-year term on the NASCUS Board, as provided by the association’s bylaws (one seat on the board is appointed by the chairman). Meanwhile, the NASCUS Credit Union Advisory Council (which is made up of representatives of credit unions that are members of the association, re-elected four members. They are: Patty Idol, Mountain CU, Sylva, N.C. (currently Chairman-Elect); Cathie Tierney, Community First CU, Appleton, Wis.; Ron McDaniel, California CU, Glendale, Calif.; Mike Williams, Colorado CU, Littleton, Colo.

NASCUS press release on 2015 elections

Ito touches on wide array of topics in interview, op-eds
The relationships between regulators and the regulated, the overhead transfer rate, supplemental capital and the recently approved risk-based capital rule are all issues NASCUS President and CEO Lucy Ito addressed in an interview published this week in Credit Union Times newspaper. The interview marked Ito’s first anniversary as president and CEO of NASCUS. Last week, op-eds by Ito appeared in both Credit Union Journal and CUToday.info, focusing on the association’s 50th anniversary and key issues being pursued by NASCUS, respectively.

Lucy Ito interview in Oct. 28 Credit Union Times
Op-ed, Credit Union Journal: NASCUS marks 50 years of commitment
Op-ed, CUToday.info: The top 5 issues on NASCUS’ agenda

Five schools/conferences ahead; date/place for Cybersecurity symposium set
Five schools and conferences are on the NASCUS education agenda for the remainder of this year, and for the first month of 2016, and a date and location have been set for the third annual NASCUS/CUNA Cybersecurity Symposium in 2016. The five schools and conferences are: “Michigan Industry Day,” co-sponsored by the Michigan Office of Financial and Insurance Regulation (OFIR), is set for Tuesday (Nov. 3) in Grand Rapids; the NASCUS/CUNA Bank Secrecy Act Conference, set for Nov. 15-18 in Fort Lauderdale, Fla.; the Texas Directors’ College, Nov. 17 in San Antonio; Idaho Credit Union Outreach, Jan. 14 (2016) in Boise, and; Florida Directors’ College, Jan. 28 in Orlando. See the link below for details on each of the events. Meanwhile: Aug. 1-2 are the dates for the third annual NASCUS/CUNA Cybersecurity Conference, to be held in Chicago (at the Westin North Shore Hotel) – which is also the headquarters for the 2016 NASCUS State System Summit, Oct. 5-7.

NASCUS educational offerings, 2015-16

BRIEFLY: Auto lending webinar scheduled
NCUA staff and others will offer their insights to credit unions looking to expand automobile lending during a webinar scheduled for Nov. 18. Registration for the free event is now open. Certificates of attendance will be offered to those attending the webcast for 45 minutes, answering three out of four poll questions and passing the quiz at the end of the session.

Register for NCUA auto lending webinar


Information Contact:
Patrick Keefe, NASCUS Communications, pkeefe@nascus.org or (703) 528-5974