The NCUA Board issued a proposed rule and an interim final rule during its Thursday board meeting, conducted via live audio stream. The board also heard a quarterly update on the National Credit Union Share Insurance Fund.
NCUA Chairman Rodney Hood announced at the start of the meeting that NCUA would be “following the spirit” of the White House Executive Order issued this week calling on federal agencies to identify regulations that can be rescinded or temporarily waived to promote job creation and economic growth.
The board approved an interim final rule on prompt corrective action (PCA). The rule:
The rule will be effective immediately upon publication in the Federal Register, and the temporary modifications will be in place until Dec. 31.
CUNA has requested PCA flexibility due to the pandemic in multiple communications with NCUA in recent weeks.
“We thank NCUA for reviewing its PCA regulations with an eye on additional flexibility for credit unions that may see a temporary dip in their net worth leverage ratio due to the effects of COVID-19,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer. “CUNA supports giving credit unions flexibility to help them aid in COVID-19 recovery efforts while helping ensure they remain operational and liquid throughout the crisis.”
Comments on the PCA final rule can be submitted to NCUA within 30 days of its publication in the Federal Register.
The proposed rule on joint ownership accounts would provide an alternative method to satisfy the membership card or account signature card requirement (signature card requirement).
The signature card requirement could be satisfied by information contained in the account records of the insured credit union establishing co-ownership of the share account, such as evidence that the credit union has issued a mechanism for accessing the account to each co-owner or evidence of usage of the share account by each co-owner.
Comments on the proposal will be due within 30 days after its publication in the Federal Register.
The board also discussed an interim final rule on overdraft, but the rule was tabled when board members J. Mark McWatters and Todd Harper indicated their opposition.
The rule would have removed the 45-day limit and replaced it with a requirement that the written policy must establish a specific time limit for a member either to deposit funds or obtain an approved loan from the credit union to cover each overdraft.