As part of its overall efforts to reform the corporate credit union system, the National Credit Union Administration (NCUA) has issued a proposed Interpretive Ruling and Policy Statement (IRPS) to provide guidance on the requirements and process for chartering federal corporate credit unions.
The proposed IRPS describes the standards the agency would use and the timeline it would follow for evaluating applications.
Under the proposal, charter applications would need to include substantial information, including a detailed business plan and various NCUA forms.
NCUA’s objectives in proposing the guidance are to:
A corporate charter application would need to be submitted by a group of at least seven people that represent natural person credit unions.
Before chartering a corporate, NCUA must be satisfied that the institution will be viable and that it will provide needed services to its members.
The NCUA Office of Corporate Credit Unions will conduct an independent investigation of the corporate credit union’s charter application to assess the economic and long-term viability of the proposed corporate.
Any applications submitted to NCUA prior to the final IRPS must be in compliance with the terms of this proposal.
NCUA is accepting public comments until Nov. 1. CUNA asks credit unions to submit comments on the proposed IRPS to Mary Dunn, CUNA’s senior vice president/deputy general counsel, or Luke Martone by Oct. 26.
Credit unions can contact CUNA at 800-356-9655, ext. 6743, with questions.
5 Questions to Consider Regarding the Proposed IRPS
1. There’s currently no guidance for the chartering of federal corporate credit unions. Is there a need for guidance in this area?
2. Do you believe the proposed collection of information would be necessary for NCUA to properly perform its functions as the regulator of corporate credit unions? Would this information have a practical use?
3. NCUA estimates the burden on each charter applicant at approximately 330 hours—primarily related to the proposed business plan requirement. Do you agree with the accuracy of this estimate? Assuming 330 hours is accurate, is it reasonable to expect such a time commitment for corporate charter applicants?
4. Under the proposal, corporate charter applications received by NCUA before the final IRPS is adopted must be in compliance with the proposal. Do you agree that such treatment is appropriate?
5. The proposed IRPS describes in detail the timeline of the charter application review process. Is the proposed timeline reasonable? Do you know of any reason why NCUA should not offer a timeline of the process?