Dec. 11, 2015

NCUA budget transparency bill heads to House floor

Legislation that would require annual hearings for the NCUA budget (including the overhead transfer rate) is on its way to the House floor as a result of action this week in the Financial Services Committee. On a vote of 40-16, the committee reported out H.R. 2287 (the NCUA Budget Transparency Act), which mandates that the agency hold hearings (after notice in the Federal Register) and accept comments on its budget. As NASCUS President and CEO Lucy Ito noted in a press statement following Wednesday’s vote, a formal notice and comment requirement for NCUA’s budget, including the overhead transfer rate, provides oversight, accountability and transparency and represents not just sound public policy, but helps to ensure an equitable playing field for state and federally chartered credit unions. NCUA Board Chairman Debbie Matz, however, noted in a letter to committee Chairman Jeb Hensarling (R-Texas) the day before the panel’s vote, of her “grave concerns and opposition” to the measure. “NCUA’s experience is that when regulated entities participate in the development of the operational budget and have access to pre-decisional information, the result is not always in the public interest or good public policy,” she wrote. The next step for the bill will be full House consideration.

… On Senate side, doubts about similar action

Meanwhile, an appropriations bill with provisions related to credit unions and other financials – including a version of the NCUA budget transparency measure – will continue to be considered in the Senate through the weekend and likely through the middle of next week. But the future of the financial institution provisions remaining in the bill is cloudy, as there is sharp disagreement among senators about keeping those provisions in the bill at all. The Senate on Thursday passed a short-term spending bill to keep the funding parts of the bill alive, but no agreement was reached among senators over the financial institutions provisions. Discussions among senators are expected to continue through the weekend and into next week. Aside from the NCUA budget provision, the bill contains another granting credit unions and other lenders a safe harbor until the CFPB can certify its Truth in Lending Act-Real Estate Settlement Procedures Act forms do not conflict with state law.

Board meeting takes up reg review, IOLTA final rule

Another call for comments about regulatory review, and a final rule putting into effect new authority for federally insured credit unions to offer a variety of escrow accounts, is on the agenda for next week’s regular meeting of the NCUA Board. The regulatory review (round four) is part of an Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review. NCUA is not required to participate in the review, but is doing so voluntarily, electing to participate in the process by conducting a review that, the agency states, is “consistent and comparable” to the federal banking agencies’ processes, and that also takes into account the “unique circumstances of federally insured credit unions and their members.” Previous EGRPRA rounds have dealt with share insurance, corporate credit unions, the community development loan program, consultation with state officials, and more. NASCUS, in comments submitted in previous rounds, has repeatedly urged NCUA to ease the regulatory burden on FISCUs by changing the format of its rules to incorporate in one place all if its share insurance rules. The final rule under consideration refers to last year’s Federal Credit Union Act revisions ensuring parity in coverage of Interest on Lawyer Trust Accounts (IOLTA) and “other similar escrow” accounts. Late last year, after the FCU Act revisions were adopted by Congress, NCUA Chairman Debbie Matz announced that the accounts were subsequently insured to the limit allowed by the NCUSIF. This final rule would bring NCUA’s regulation into conformity with her announcement and address the “other similar escrow” accounts provision in the law. The NASCUS comment letter recommended that federal share insurance coverage should be passed-through to certain prepaid card accounts, similar to that coverage provided for IOLTA accounts and similar escrow accounts. The NCUA Board meets at 10 a.m. Thursday, Dec. 17, at agency headquarters in Alexandria, Va.

NASCUS comment letter EGRPRA Round 1 (May, 2014)
NASCUS comment letter EGRPRA Round 2 (Dec., 2014)
NASCUS comment letter EGRPRA Round 3 (July, 2015)
NASCUS comment letter, proposed rule/IOLTAs

Summary outlines proposed FOM rule changes

Sweeping, proposed changes to field of membership (FOM) rules have been partially driven by NCUA’s perception that many state credit union FOMs are more beneficial to state credit unions, a new NASCUS summary of the federal agency’s proposal points out. In addition, the summary notes that NASCUS does not now intend to file a comment letter, as the proposed rule applies only to federal credit unions. Among the changes proposed by NCUA, the summary notes that: FCUs will be able to apply to convert to a community charter or expand an existing community charter without having to serve the core area if electing to serve a portion of a Core Based Statistical Area; the agency’s population limit of 2.5 million people will apply to a Core Based Statistical Area or any well-defined portion thereof; an FCU will be able to apply to serve “Combined” Statistical Areas, as designated by the Office of Management and Budget.

NASCUS summary, NCUA proposed FOM rule changes

1-hour webinar looks at cyber-attack risk readiness

Cyber-attack risks – can you plan for them? The NASCUS webinar on Wednesday, Dec. 16 (from 1-2 p.m.), will clue you in on just how you can. This one-hour basic presentation by an internationally recognized expert in the field of cybersecurity -- from one the nation's largest computer network infrastructure organizations -- will outline the fundamentals of a cyber attack and what credit union organizations can do to mitigate the chances of a successful attack. Led by CISCO Systems’ James Risler (a highly rated speaker at the 2015 NASCUS State System Summit in New Orleans), this program looks at fundamentals of a cyber attack, indicators of a successful attack, how hackers think (and what motivates them), how organizations can mitigate chances of a successful attack, and recommendations for perceiving cyber threats. Fees for this program are $99 for NASCUS members and $129 for non-members.

More info/register for NASCUS Cybersecurity Webinar, Wednesday, Dec. 16 (1-2 p.m.)

BRIEFLY: FHLB access for PICUs becomes law; welcome new benefactor members

President Obama on Dec. 4 signed into law H.R. 22 (the highway and transit funding bill), which includes giving privately insured, state-chartered credit unions access to membership in the Federal Home Loan Bank system. The new law (Public Law No. 114-94) went into effect upon the president’s signature … Welcome to new NASCUS benefactors, the Indiana Credit Union League and the Mississippi Credit Union Association – thank you for your support of the state credit union system!

Text of provision on privately insured CU access to FHLB system (Sec. 82001)


Information Contact:
Patrick Keefe, NASCUS Communications, or (703) 528-5974