CUNA urges NCUA attention to issues as they arise

August 9, 2016

While CUNA appreciates the spirit of the NCUA’s annual review of its regulations, it should not be used as a reason to delay responses to a known problem with a regulation, CUNA wrote to the agency this week. In commenting on the NCUA’s annual review of one-third of its regulations, CUNA asked the agency to be willing to address issued and problems as they are brought to the NCUA’s attention.

“CUNA continues to hear complaints from credit unions and leagues that have contacted the NCUA staff to inform them that a regulation has become out of date, unnecessary or leading to outcomes for credit unions that may not be intended,” the letter reads. “We often are told that the problematic regulation is not up for review or will be up for review in another year and we should address the issue then.”

CUNA urged the agency to use the annual regulatory review as an opportunity for an overall review of NCUA regulations, and allow matters that require more immediate consideration not be bound by a calendar year.

CUNA also offered specific comments on the areas up for review, including:

  • Member business loans (12 CFR 723): CUNA urged the NCUA to release guidance pertaining to its new member business rule as soon as possible, and to allow credit unions adequate time to update member business lending programs to comply with the guidance;
  • Liquidity facility (12 CFR 725): While CUNA supports the existence and mission of the Central Liquidity Facility, it believes a more robust facility would be positive for credit unions and exert less pressure on the Federal Reserve’s discount window;
  • Advertising (12 CFR 740): CUNA asked the NCUA to consider revising the regulation to permit credit unions to use a further abbreviated advertising statement, as each character in a text message, or via Twitter, must be chosen carefully;
  • Requirements for Insurance (12 CFR 741): CUNA suggested that the NCUA strongly consider the banking model of examination that allows a state regulator to alternate exams with a related federal regulator where the institution is operating in a safe and sound manner;
  • Share insurance (12 CFR 745): CUNA is disappointed that the NCUA did not take advantage of the passage of the Credit Union Share Insurance Fund Parity Act to extend insurance to all prepaid card accounts, which CUNA believes the NCUA has the authority to do;
  • Administrative Actions (Part 747): CUNA urges the NCUA’s Office of General Counsel to work closely with field and examination staff to ensure all administrative actions are handled appropriately. CUNA also remains concerned with the appeals process and urges the agency to put a robust appeals process in place; and
  • Leasing (12 CFR 714): CUNA urges flexibility regarding residual value limits, and believes credit unions should determine for themselves whether obtaining a full assignment is necessary.