NCUA should only promulgate rules with ‘a compelling need’

August 20, 2020

NCUA should promulgate new rules or expand existing ones only if they are clearly warranted based on a compelling need, CUNA wrote to the agency Thursday. CUNA sent its comments in response to NCUA’s annual review of one-third of its regulations.

The letter also adds that CUNA continues to believe the process to seeking comments on regulations included in NCUA’s regulatory review could be improved’

“For example, some of the rules included for review may already be the subject of proposed changes or recent modifications. In such instances, it is unclear the extent to which further amendments to those regulations will be contemplated by the agency,” the letter reads. ‘’In addition, since the notice of the regulatory review is not required to comply with the Administrative Procedure Act (APA), and is therefore not published in the Federal Register, potential commenters may be unaware of its issuance. To ensure adequate input is received, we ask the NCUA to consider ways to better highlight its request for comments on the regulatory review.”

Regulations included in the review (and CUNA’s comments) include:

Credit union service organizations (CUSOs)

  • CUNA supports NCUA’s proposed revision to permit a corporate credit union to make a minimal investment in a CUSO without the CUSO being classified as a corporate CUSO and being subject of heightened NCUA oversight;
  • CUNA understands that there may be instances where the NCUA’s involvement is warranted for supervising critical CUSOs and vendors that present material risks to the credit union system but opposes the NCUA having unlimited authority to supervise all CUSOs and vendors.

Supervisory Committee audits and verifications

  • CUNA appreciated NCUA’s recent change to these regulations, but urges NCUA to issue reference material on how to conduct procedures that meet the minimum requirements of Appendix A.


  • CUNA supports recent changes to real estate appraisals, including the interim final rule adopted in April to defer the requirement to obtain an appraisal for up to 120 days following the closing of a transaction for certain transactions.

Central Liquidity Facility (CLF)

  • CUNA supports recent amendments to CLF regulations, particularly the elimination of the six-month waiting period for a new member to receive a loan and easing of collateral requirements. CUNA also supports the temporary changes to reduce the member waiting period for a credit union to terminate its CLF membership and permitting an agent member to borrow for its own liquidity needs.
  • CUNA has also called on Congress to extend expanded borrowing authority through at least the end of 2021, make permanent the ability of corporate credit unions to act as agents and authorize NCUA to expand borrowing authority from 16 to 25 times the paid in capital.

Requirements for insurance

  • CUNA looks forward to a phase-down of the Normal Operating Level to 1.3% by 2021. CUNA also urges the agency to extend the credit union asset threshold for an 18-month examination cycle from $1 billion to $3 billion.
  • CUNA also called for NCUA to allow interest to be capitalized on consumer mortgage loans, in connection with a loan made during the time of the pandemic.

Appeals procedures

  • CUNA appreciates the thorough legal review conducted by the NCUA to streamline and improve the appellate review process. However, we continue to believe that the agency should provide a mechanism for collection of examination feedback on the performance of individual examiners.