NASCUS Summary: NCUA Board Meeting (Feb. 2023)
On February 26, the NCUA Board held its second open meeting of 2023. The Board unanimously approved two items. The items approved included a long-awaited final rule on cyber incident reporting requirements and a notice of proposed rulemaking to amend the NCUA’s federal credit union chartering and field-of-membership rules.
Final Rule, Part 748, Cyber-Incident Notification Requirements for Federally Insured Credit Unions
The final rule on cyber incident reporting remains largely unchanged from that of the proposed rule. Under the final rule, federally insured credit unions (FICUs) will be required to report a cyber incident that leads to a “substantial loss of confidentiality, integrity, or availability of a network or member information system as a result of the exposure of sensitive data, disruption of vital member services, or that has a serious impact on the safety and resiliency of operational systems and processes.” Such cyber attacks must be reported to NCUA within 72 hours upon a credit union forming a reasonable belief that it has experienced a cyberattack.
The effective date of the final rule is September 1, 2023. NCUA will issue resources for credit unions in advance of the effective date.
Proposed Rule, Part 701, Chartering and Field of Membership
In an effort to provide greater opportunities for expanding fields of membership for Federal credit unions, the Board unanimously approved a proposed rule that would amend the chartering and field of membership rules with nine changes. The changes are intended to enhance consumer access to safe, fair, and affordable financial services, especially in underserved communities.
The proposed changes include:
- Four changes to the rules for underserved areas that multiple common-bond federal credit unions may seek to add to their field of membership. The changes would streamline the current application requirements and clarify the role of data and criteria that other federal agencies provide relating to underserved areas, specifically the U.S. Treasury’s CDFI criteria.
- Elimination of the business and marketing plan requirement for certain Federally Insured State Chartered credit unions that are seeking to convert to a federal charter while serving the same community field of membership.
- Expanding the definition of community-based field of membership affinities – recognizing the growth of telecommuting and remote work for companies headquartered in a community.
- A provision to allow all federal credit unions to better capture the ongoing bond between individuals within a field of membership and their immediate family members following the death of a member.
- A technical clarification on the process by which NCUA reviews and approves the character and fitness of a prospective federal credit union’s management and officials.
Comments will be due 90 days following publication in the Federal Register. NASCUS will provide a summary of the proposed rule in the coming weeks.
Share Insurance Fund Equity Ratio Briefing
The Board was also briefed on the performance of the Share Insurance Fund and the status of the fund’s equity ratio. The fund ratio remained at 1.30 percent as of December 31, 2022. This was an increase from 1.26 percent at the end of June 30, 2022. The board once again discussed credit union failures and their impact on the equity ratio. In the 4th quarter of 2022, there were a total of six credit union failures. Five of the six failures were due to fraud. The complete presentation of the board’s share insurance fund briefing can be found here.
Read the press release from the NCUA following the board meeting here.