NCUA Proposed Rule Summary: Federal Credit Union Bylaws Relating to Expulsion of a Member
Read NASCUS Legislative and Regulatory Affairs Department Summary Here
September 27, 2022
During the September 22, 2022, NCUA Board Meeting, the Board approved for publication and comment a proposed rule providing bylaw amendments that would allow additional authority for FCUs in the expulsion of members for cause. The proposed rule seeks to incorporate legislative changes resulting from the March 15, 2022, effective Credit Union Governance Modernization Act of 2022 (Governance Modernization Act) which ordered NCUA to develop policy by which a FCU member may be expelled by a two-thirds vote of a quorum of the FCU’s board of directors.
The deadline to submit a comment is December 2nd, 2022. The proposed rule may be read in its entirety here.
Notice of Proposed Rulemaking and Request for Comment
NCUA: Subordinated Debt
Read NASCUS Legislative and Regulatory Affairs Department Summary Here
October 5, 2022
At the September 22, 2022, NCUA Board meeting, the Board approved for comment a proposed rule that would amend the Subordinated Debt rule (the Current Rule), which the Board finalized in December 2020 with an effective date of January 1, 2022. The proposal would make two changes related to the maturity of Subordinated Debt Notes and Grandfathered Secondary Capital (GSC).
The proposed rule also includes four other minor modifications to the current subordinated debt rule. The proposed rule in its entirety can be found here. Comments are due December 5, 2022.
Agency Accepting Comments and Budget Briefing Presentation Requests
Sept. 29, 2022 — The National Credit Union Administration’s staff draft budget for 2023–2024 is now available on the agency’s website for review and comment. The staff draft budget has also been submitted for publication in the Federal Register, and the comment period is open until October 28, 2022.
The proposed combined 2023 staff draft budget is $367.0 million, or 8.1 percent higher than the 2022 budget. The proposed operating budget is $350.8 million, which is 9.6 percent higher than in 2022. The proposed 2023 capital budget is $11.2 million, or 14.1 percent lower than in 2022. The proposed Share Insurance Fund administrative budget is $4.9 million, or 21.5 percent lower than in 2022. The proposed budget summary and detailed budget justifications can be found on the Budget and Supplementary Materials page on NCUA.gov.
The agency will hold a public budget briefing at its Central Office on Wednesday, October 19, 2022, beginning at 10 a.m. Eastern. The meeting will be livestreamed on NCUA.gov.
To Comment on the Proposed Budget:
- Submit comments on Docket # NCUA-2022-0145 at the Federal eRulemaking Portal by October 28, 2022.
- Comments should provide specific, actionable recommendations.
To Request an In-Person Presentation at the October 19 Budget Briefing:
- Email your request to [email protected] by October 12, 2022.
- Include the presenter’s name, title, affiliation, mailing address, email address, and telephone number.
- The Board Secretary will notify approved presenters and give them their allotted presentation times.
For those approved to present at the budget briefing, written statements and presentations must be sent to [email protected] by 5 p.m. Eastern on October 14, 2022. In addition to delivering remarks at the budget briefing, registered presenters will have the opportunity to pose questions about the budget to NCUA staff.
The Board will consider a final budget at an open meeting later this year.
Agency Accepting Comments and Budget Briefing Presentation Requests
Sept. 29, 2022 — The National Credit Union Administration’s staff draft budget for 2023–2024 is now available on the agency’s website for review and comment. The staff draft budget has also been submitted for publication in the Federal Register, and the comment period is open until October 28, 2022.
The proposed combined 2023 staff draft budget is $367.0 million, or 8.1 percent higher than the 2022 budget. The proposed operating budget is $350.8 million, which is 9.6 percent higher than in 2022. The proposed 2023 capital budget is $11.2 million, or 14.1 percent lower than in 2022. The proposed Share Insurance Fund administrative budget is $4.9 million, or 21.5 percent lower than in 2022. The proposed budget summary and detailed budget justifications can be found on the Budget and Supplementary Materials page on NCUA.gov.
The agency will hold a public budget briefing at its Central Office on Wednesday, October 19, 2022, beginning at 10 a.m. Eastern. The meeting will be livestreamed on NCUA.gov.
To Comment on the Proposed Budget:
- Submit comments on Docket # NCUA-2022-0145 at the Federal eRulemaking Portal by October 28, 2022.
- Comments should provide specific, actionable recommendations.
To Request an In-Person Presentation at the October 19 Budget Briefing:
- Email your request to [email protected] by October 12, 2022.
- Include the presenter’s name, title, affiliation, mailing address, email address, and telephone number.
- The Board Secretary will notify approved presenters and give them their allotted presentation times.
For those approved to present at the budget briefing, written statements and presentations must be sent to [email protected] by 5 p.m. Eastern on October 14, 2022. In addition to delivering remarks at the budget briefing, registered presenters will have the opportunity to pose questions about the budget to NCUA staff.
The Board will consider a final budget at an open meeting later this year.
A ransomware attack on your credit union could inflict serious financial damage and pose reputation risk. The National Credit Union Administration is teaming up with the FBI, Treasury Department, and the Wisconsin Department of Financial Institutions to host a webinar to discuss how to protect your credit union and your members.
Registration for this October 13 webinar, “Ransomware in the Financial Sector,” is now open.
The event is scheduled to begin at 2 p.m. Eastern and last approximately two hours. There is no charge. All the presentations will have real-world examples to illustrate the potential impact of ransomware attacks. The webinar will include a question-and-answer period.
Staff from the NCUA’s Office of Credit Union Resources and Expansion and Office of Examination and Insurance will moderate a panel featuring: Ted P. Delacourt, FBI Cyber Division; Thomas Theune: Deputy Director, Office of Credit Unions, Wisconsin Department of Financial Institutions; and Steven Curran, Treasury Department, Office of Cybersecurity and Critical Infrastructure Protection.
Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. They should allow pop-ups from this website. The webinar will be closed captioned and archived on the NCUA’s Learning Management System approximately one week following the live event.
Participants can submit questions during the presentation or in advance by emailing [email protected]. The email’s subject line should read, “Ransomware Webinar.” Please email technical questions about accessing the webinar to either [email protected] or [email protected].
The National Credit Union Administration Office of Examination & Insurance is hosting a webinar on the recently announced Simplified Current Expected Credit Loss (CECL) Tool. The one-hour live webinar will take place on Wednesday, October 12, beginning at 2 p.m. Eastern.
The Simplified CECL Tool uses the Weighted Average Remaining Maturity (WARM) methodology to estimate the allowance for credit loss and is designed for the more than 3,000 credit unions with less than $100 million in assets. Larger credit unions can use the tool based on management and auditor discretion.
NCUA subject matter experts will provide an overview of the Tool, demonstrate the Tool, and answer participants’ questions.
Participants may submit questions in advance by emailing [email protected]. The email’s subject line should read, “CECL Webinar.”
Registration for this webinar is now open. Participants can log into the webinar and view it on computers or mobile devices using the registration link. They should allow pop-ups from this website. The webinar will be closed captioned and archived approximately one week following the live event.
NASCUS is working with state and federal regulatory agencies to explore ways to improve not just the state credit union systems regulatory environment, but its supervisory environment. These meetings are designed to bring state and federal regulators together to tackle issues and share best practices in an open forum.
These meetings help state regulators collaborate and enhance their efficiencies, which benefits the state agencies as well as the credit union regulatory system.
This meeting is by invitation only.
NASCUS Staff Liaisons:
John J. Kolhoff, NASCUS Senior Vice President of Policy and Supervision
Sarah Stevenson, NASCUS of Regulatory Affairs
NASCUS is working with state and federal regulatory agencies to explore ways to improve not just the state credit union systems regulatory environment, but its supervisory environment. These meetings are designed to bring state and federal regulators together to tackle issues and share best practices in an open forum.
These meetings help state regulators collaborate and enhance their efficiencies, which benefits the state agencies as well as the credit union regulatory system.
This meeting is by invitation only.
NASCUS Staff Liaisons:
John J. Kolhoff, NASCUS Senior Vice President of Policy and Supervision
Sarah Stevenson, NASCUS of Regulatory Affairs
MEMBER BENEFIT: Click here to read NASCUS’s summary of the proposed rule.
Proposed Rule: Cyber Incident Notification Requirements for Federally Insured Credit Unions
Due to the increased frequency and severity of cyberattacks on the financial services sector, the NCUA Board is proposing to require a federally insured credit union that experiences a reportable cyber incident to report the incident to the NCUA as soon as possible and no later than 72 hours after the federally insured credit union reasonably believes that it has experienced a reportable cyber incident. This notification requirement provides an early alert to the NCUA and does not require credit unions to provide a detailed incident assessment to the NCUA within the 72-hour time frame.
June 8, 2022 – The U.S. Senate voted to confirm Todd M. Harper’s reappointment to the National Credit Union Administration (NCUA) Board until April 10, 2027.
The U.S. Senate voted to confirm Todd M. Harper’s reappointment to the National Credit Union Administration (NCUA) Board until April 10, 2027.
Before joining the NCUA Board, Mr. Harper served as director of the agency’s Office of Public and Congressional Affairs and chief policy advisor to former Chairmen Debbie Matz and Rick Metsger. He is the first member of the NCUA’s staff to become an NCUA Board Member and Chairman.
“On behalf of the National Association of State Credit Union Supervisors (NASCUS) and its stakeholders, I would like to congratulate Chairman Todd Harper on his full-term confirmation on the NCUA Board,” commented NASCUS President & CEO Brian Knight. “We look forward to furthering our productive discussions on the many issues facing the credit union system with Chairman Harper, Vice-Chair Hauptman, and Board Member Hood. We appreciate their continued positive dialogue with state regulators to find solutions that benefit both state and federal charters.”
As NCUA Board Chairman, Mr. Harper serves as a voting member of the Financial Stability Oversight Council and represents the NCUA on the Federal Financial Institutions Examination Council and the Financial and Banking Information Infrastructure Committee.
“In the years ahead, my focus will remain on credit union members, the system’s resiliency and strength, and the NCUA’s readiness to respond to an evolving economic environment, credit union system, and financial services marketplace. Consistent with the law, I will also continue prioritizing capital and liquidity, cybersecurity, consumer financial protection, and diversity, equity, and inclusion,” stated Harper.
During his tenure as staff and legislative director with the U.S. House of Representatives, he contributed to impactful financial services reforms, from the enactment of the Gramm-Leach-Bliley Financial Services Modernization Act in 1999 through the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010.
“It is an honor to continue working with my fellow NCUA Board members — Kyle Hauptman and Rodney Hood — and the dedicated team of professionals at the NCUA,” added Chairman Harper.
NASCUS has issued two summaries this week based on NCUA activities.
Summaries require member log-in to review.
The OCC, Board, FDIC, FCA, and NCUA (collectively, the Agencies) are reorganizing, revising, and expanding the Interagency Questions and Answers Regarding Flood Insurance. This revised guidance will assist lenders in meeting their responsibilities under Federal flood insurance law and increase public understanding of the Agencies’ respective flood insurance regulations. Significant topics addressed by the revisions include guidance related to major amendments to the flood insurance laws with regard to the escrow of flood insurance premiums, the detached structure exemption, force placement procedures, and the acceptance of flood insurance policies issued by private insurers. With this issuance, the Agencies are consolidating the Questions and Answers proposed by the Agencies in July 2020 and the Questions and Answers proposed by the Agencies in March 2021 into one set of Interagency Questions and Answers Regarding Flood Insurance.
Read the NASCUS Summary Here
The newly consolidated guidance consists of 144 Questions and Answers (including 24 private flood insurance questions and answers). The full Q&A begins on page 153 covering a broad range of topics. Some key topics addressed by the revisions include guidance related to amendments to the flood insurance laws as they apply to the escrow of flood insurance premiums, certain exemptions for detached structures, procedures for the force placement of insurance, and the acceptance of flood insurance policies issued by private insurers.
NCUA has issued LTCU 22-CU-07 to address the increased use of financial technology by credit unions in their operations and clarify its expectations for credit unions contemplating the use of new or emerging distributed ledger technologies (DLT). This is NCUA’s second LTCU on this issue, as LTCU 21-CU-16 was issued December 2021.
The LTCU identifies the agency’s expectations related to DLTs and explains that credit unions may appropriately use DLT as an underlying technology. The following areas are considerations and NCUA’s expectations for FICUs, however, the NCUA notes this list should not be construed as all inclusive. Federally insured state-chartered credit unions should also look to their own state laws for permissibility prior to adopting DLT for existing operations.
Letter to Credit Unions 22-CU-06: NCUA to Begin Phase 2 of Resuming Onsite Operations
April 2022
Based on new guidance from the Centers for Disease Control and Prevention (CDC) and the Safer Federal Workforce Task Force, the NCUA will enter the second phase (Phase 2) of resuming its onsite operations on April 11, 2022.
Letter to Credit Unions 22-FCU-02: Final Rule on Definition of Service Facility
March 2022
The final rule amending the definition of “service facility” for multiple common-bond FCUs became effective December 27, 2021. The final rule provides that shared locations are service facilities for purposes of multiple common-bond FCU additions of groups and/or underserved areas, regardless of whether the FCU has an ownership interest in the shared branching network providing the locations. Qualifying shared locations include electronic facilities offering required services such as video teller machines.
NCUA Risk Alert: 22-RISK-01 Heightened Risk of Social Engineering and Phishing Attack
March 2022
The on-going conflict in Ukraine has raised concerns about potential cyberattacks in the U.S., including those against the financial services sector. All credit unions and vendors, regardless of size, are potential targets for cyberattacks, like social engineering and phishing attacks, and must remain vigilant. Credit unions should report any cyber incidents to the NCUA, your local FBI field office or the Internet Crime Complaint Center, and the Cybersecurity and Infrastructure Security Agency (CISA).