NCUA’s ‘second chance’ proposal would reduce regulatory burden

September 30, 2019

CUNA supports NCUA’s proposed “second chance” interpretive ruling and policy statement because it will effectively reduce regulatory burden. Proposed by Chairman Rodney Hood in July, the IRPS would amend and expand the current de minimis exception to reduce the scope and number of offenses that would require an application to the NCUA Board.

Specifically, the proposal would not require an application for certain insufficient funds checks, small dollar simple theft, false identification, simple drug possession, and isolated minor offenses committed by covered persons as young adults.

“In general, we support the proposed expansion of offenses that qualify for the de minimis exception, thereby eliminating the need to submit an application for certain low-risk, isolated offenses,” the letter reads. “We agree with the Board that this expansion would result in a reduction in regulatory burdens to credit unions, covered individuals, and the agency, while continuing to mitigate the risk to insured credit unions posed by convicted persons.”

While CUNA does have some concern that insurance costs could increase, after discussing the issue with its industry partners, it understands that no immediate premium increases are likely.

“However, there is the possibility that such costs could increase if the expanded de minimis exception included in the IRPS ultimately leads to increased fraud at credit unions,” the letter reads. “If such a result occurs, we urge the NCUA Board to review the IRPS to determine how it can be further modified to eliminate any spike in fraudulent activity (that is tied to changes included within the IRPS).”