WASHINGTON (9/23/15)--Corporate credit unions, reimbursement of credit union officials and employees, and Bank Secrecy Act (BSA) regulations are the subject of a new CUNA letter to the National Credit Union Administration. The agency accepted comments on these regulatory provisions as part of its annual Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review.
The NCUA made substantial changes to its corporate credit union regulations in 2010 and 2011, mostly in response to the financial crisis. Now that five years have passed, CUNA believes the NCUA should revisit these provisions.
“In particular, the requirement imposed in §704.13, which requires the recordation of votes, should be re-evaluated,” CUNA’s letter reads. “CUNA strongly believes that these matters are better left to bylaws as opposed to regulation.”
CUNA also suggested the NCUA revisit the additional audit and reporting requirements imposed in 2011, many of which mirrored those put in place by the Federal Deposit Insurance Corp. Those additions should be revisited and modified accordingly to reduce regulatory burden on corporate credit unions, CUNA believes.
The NCUA also amended provisions concerning natural person credit unions’ reimbursement, insurance and indemnification of officials and employees; fidelity bond and insurance coverage; and golden parachutes and indemnification payments as a result of the financial crisis. These provisions mirrored similar changes for corporate credit unions.
CUNA believes applying those provisions to natural person credit unions was too far-reaching and continues to have a chilling effect on credit unions’ ability to attract management personnel and board members, and therefore should be revisited by the NCUA.
“These are volunteer board members being asked to assume a role to which the NCUA appears to attach greater liability. The process that was set in place in the 2011 rule for indemnification is too cumbersome and the standards for assessments are too vague, leaving the agency considerable latitude to second guess the credit union’s decision.”
When it comes to BSA compliance, CUNA also recommended that the NCUA work closely with the Federal Financial Institutions Examination Council, U.S. Treasury, Financial Crimes Enforcement Network and Office of Foreign Assets Control.
In conjunction with those agencies, CUNA said the NCUA should: