NCUA has instructed examiners to begin sharing CAMEL ratings with federally-insured, state-chartered credit unions during all on-site insurance reviews and supervision contacts.1 (Visit ncua.gov and search for NCUA Letter to Credit Unions No. 11-CU-12.)
NCUA examiners will disclose their CAMEL component and composite ratings using guidance published in Letter to Credit Unions No. 07-CU-12 from December 2007, along with sufficient information supporting the basis for the assignment of individual component and composite ratings.
When NCUA examiners are performing joint contacts with state examiners, they’ll discuss differences in CAMEL conclusions with the state supervisory staff. If differences can’t be resolved, NCUA examiners will pro-ceed to disclose NCUA’s CAMEL simultaneously and on schedule with the state examiner—but in no case later than the final meeting with credit union management and officials. If the state examiner doesn’t disclose a CAMEL rating either on-site or in time for
the final meeting, NCUA still will disclose its rating no later than the final meeting.
Even though NCUA is now communicating its CAMEL ratings to all federally-insured, state-chartered credit unions and state supervisory authorities, this information remains sensitive and confidential. NCUA’s CAMEL ratings still remain the property of NCUA and shouldn’t be shared with third parties other than the examined credit union and the appropriate state supervisory authority. Direct any questions to the NCUA regional office, district examiner, or state supervisory authority.
Garnishment Rule Guidance
NCUA issued guidance to help credit unions comply with the interim final rule on the garnishment of accounts containing federal benefit payments (“Garnishment rules and protections,” 5/11). The rule went into effect on May 1, 2011, and established procedures credit unions must follow when they receive a garnishment order against an account-holder who receives certain federal benefit payments by direct deposit (e.g., Social Security, veterans’ benefits, etc.).
NCUA’s guidance points out that the rule doesn’t specifically address a federal credit union’s right to set off obligations of an account-holder against member shares. Section 107(11) of the Federal Credit Union Act grants a federal credit union the right to enforce a lien against a member’s shares if the member is delinquent on a credit union loan. This provision requires compliance with Section 701.39 of the NCUA Rules and Regulations. The garnishment rule doesn’t limit a federal credit union’s right to exercise its statutory lien authority against the protected amount in an account. Additionally, the rule doesn’t invalidate an account agreement or pre-empt state law that’s consistent with the rule.
NCUA also stated that credit unions must maintain records of account activity and actions taken in handling garnishment orders sufficient to demonstrate compliance with the rule for at least two years from the date it re-ceives a garnishment order.
Visit ncua.gov and search for NCUA’s Regulatory Alert (11-RA-04): “Garnishment of Accounts Containing Federal Benefit Payments.”
FTC Issues FCRA Report
The Federal Trade Commission (FTC) issued a staff report that compiles and updates the agency’s guidance on the Fair Credit Reporting Act (FCRA). It’s titled “Forty Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report and Summary of Interpretations.”
FTC also has withdrawn the agency’s 1990 commentary on the FCRA, which has become partially obsolete since it was issued 21 years ago. FCRA has been updated several times since 1990, most significantly by the Consumer Credit Reporting Reform Act of 1996 and the Fair and Accurate Credit Transactions (FACT) Act of 2003. More recently, the Dodd-Frank Act transferred the authority to issue interpretive guidance under the FCRA to the Consumer Fi-nancial Protection Bureau.
The staff report deletes several FTC interpretations in the 1990 commentary that were repealed, amended, or outdated, and it modifies others. The report also adds several interpretations reflecting changes Congress has made to the FCRA; rules FTC and other agencies issued under the FACT Act; statements in numerous staff opinion let-ters; and the staff’s experience from significant enforcement actions.
The report is available under “Fair Credit Reporting Act” in CUNA’s e-Guide to Federal Laws and Regulations at cuna.org.
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