Three NCUA Rules CUs Should Comment On This Month

Logo for the National Credit Union Administration

There are currently three important proposals issued by the National Credit Union Administration (NCUA) that credit unions should comment on according to Sharon Lindeman, vice president of regulatory advocacy for the California and Nevada Credit Union Leagues.

These rules and requests for information include:

  • 1) The NCUA’s proposed amendments to the Overhead Transfer Rate (OTR) methodology.
  • 2) The agency’s proposed plan to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) and set the National Credit Union Share Insurance Fund’s (NCUSIF) normal operating level to 1.39 percent.
  • 3) The agency’s proposal to amend the share insurance rules regarding the calculation for NCUSIF equity distributions for both regular distributions and a temporary method for distributions resulting from the Corporate System Resolution Program.

OTR Methodology and TCCUSF Closure
For a brief summary of the first two rules—the OTR methodology, and the plans to close the TCCUSF and set the Share Insurance Fund’s normal operating level to 1.39 percent—click here.

NCUSIF Equity Fund Distributions
The NCUA board is considering closing the TCCUSF and winding down the Corporate System Resolution Program, which could result in significant NCUSIF equity distributions. The agency proposes to add a temporary provision to govern NCUSIF equity distributions resulting from the Corporate System Resolution Program.

As proposed, these distributions will be based on the amount of assessments actually paid by each federally-insured credit union using a last-in/last-out (LILO) calculation method. The board also seeks comments on other methods, including a first-in/first-out (FIFO) calculation method.

For regular NCUSIF equity distributions (not resulting from the Corporate System Resolution Program), the board is considering two methods for calculating a federally-insured credit union’s proportionate share of an NCUSIF equity distribution: a four-quarter average of insured shares method, or a year-end insured share balances method.

Info on All Three Proposals
To learn more about all three of these proposals, including the Leagues’ full executive summary of each, credit union leaders can log in to PowerComment, the Leagues’ regulatory advocacy tool that lets your voice be heard by state and federal regulators.

Comments on the OTR Methodology are due Aug. 29. Comments regarding closing the TCCUSF and setting the normal operating level, as well as the equity fund distribution calculations, are due Sept. 5.

“I highly encourage credit unions to comment on all three of these important rules,” Lindeman said. “The NCUA board has strongly urged credit unions to comment as early as possible on the plans to close the TCCUSF. Commenting early will allow the agency to review and consider all comments received and still have enough time to take the necessary action to close the fund in 2017, if that is the ultimate decision."

Pin It