Board Actions May 2012
NCUA FINALIZES TWO REGULATORY
The NCUA Board convened its third open meeting of 2012 at
the agency’s headquarters May 24 and unanimously approved
three items. The Board also received a quarterly update for
the Share Insurance Fund and the Temporary Corporate
Credit Union Stabilization Fund (Stabilization Fund).
TDR Changes Keep Credit Union Members
in Their Homes
The Board adopted a final rule and guidance on troubled debt
restructurings (TDRs) to facilitate loan modifications and help
distressed credit union members remain in their homes. The
changes are designed to ensure that members who can no longer
afford to make full payments on their original mortgages can
keep their homes, if they agree to certain modified terms with
their credit union. For details on the final TDR rule (Part 741)
and loan workout guidance (Part 741, Appendix C), see page 1.
RegFlex Expanded to Cover
All Federal Credit Unions
n Use a six-year time horizon (instead of three years) to partially
occupy unimproved property acquired for future expansion.
n Obtain certain exceptions to constraints on purchasing
whole loans from other federally insured credit unions.
n Enter into borrowing-repurchase transactions in which the
purchased securities have maturities exceeding the
maturity of the borrowing-repurchase agreement, provided
the investment value does not exceed net worth and subject
to other constraints.
n Purchase private-label commercial mortgage-related
securities, subject to certain net worth constraints and
safety and soundness investment criteria.
n Invest in zero-coupon securities, subject to certain net
worth and investment maturity limits.
The NCUA Board adopted a final rule extending existing
Regulatory Flexibility (RegFlex) provisions to all federal
credit unions and eliminating the RegFlex designation
program. Through this action, NCUA is complying with
the intent of President Obama’s Executive Order 13579
which asked independent agencies to modify, streamline,
expand, or repeal regulations to provide relief from
The final rule’s preamble includes a summary table (s ee table
on pages 8 and 9) to assist readers in distinguishing between
the authorities for federal credit unions that meet well-capitalized standards and for federal credit unions that may
not. The table furthers NCUA’s efforts to comply with the
Plain Writing Act.
“NCUA has improved the regulatory environment by
removing barriers to Regulatory Flexibility provisions for
more than 1,700 credit unions,” said Chairman Matz. “By
lifting unnecessary restrictions, granting additional powers,
and increasing management flexibility, this RegFlex relief
expansion advances NCUA’s Regulatory Modernization
Initiative and complements the President’s efforts to ease
regulatory burdens where appropriate.”
When issuing the proposed RegFlex relief rule, NCUA
inadvertently omitted changes removing references to
RegFlex in the fidelity bond rule (Part 713). The Board
therefore issued an interim final rule in conjunction with the
final RegFlex rule changes outlined above. The Board
encourages all interested individuals or groups to submit
comments on the interim final rule before July 30, which is 60
days after publication in the Federal Register so that the
Board can consider any amendments at a later date.
RegFlex Dropped from Supervisory
The final RegFlex relief rule closely mirrors the proposed
rule and has seven components. These RegFlex relief
changes become effective on July 2, which is 30 days after
publication in the Federal Register.
Review Committee Duties
Specifically, the final rule allows all federal credit unions to:
n Make charitable contributions to charities of their choosing.
n Accept non-member deposits, up to the greater of 20
percent of shares or $3 million, from local governmental
entities or other credit unions.
The Board issued an Interpretative Ruling and Policy
Statement to change the Guidelines for the Supervisory
Review Committee and remove RegFlex revocations from the
list of material supervisory determinations federal credit
unions can appeal. Because a RegFlex designation is no
longer required to earn regulatory flexibility, federal credit
unions no longer have a need to appeal. In issuing the policy
statement, the Board provided a 30-day comment period. The
new guidelines become final 90 days following publication in
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