COVID Operations: NCUA, California DBO, and Nevada FID

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The National Credit Union Administration (NCUA) Board held its third open meeting of 2020 on April 16, using a live audio webcast and approved three items:

  • A temporary final rule granting measures of regulatory relief to help ensure that federally insured credit unions remain operational and liquid during the COVID-19 pandemic.
  • An interim final rule that temporarily defers real estate-related appraisals and evaluations under the agency’s appraisal regulations because the public health crisis and social distancing directives have created difficulties for lenders to obtain required appraisals on a timely basis.
  • A final rule that increases the threshold level below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000.

Click here to view NCUA’s recap on the temporary final rule providing regulatory relief; board approval on deferment of appraisal requirement for 120 days; raising the real estate appraisal threshold to $400,000; and an interim rule enhancing the Central Liquidity Facility (CLF) as a liquidity backstop.

Joint Statement: Appraisals and Evaluations
In addition, the federal banking agencies, together with NCUA and the Consumer Financial Protection Bureau — and in consultation with the Conference of State Bank Supervisors — issued a joint statement to address challenges relating to appraisals and evaluations for real estate-related financial transactions affected by COVID-19.

The interagency statement outlines other flexibilities in industry appraisal standards and in the agencies' appraisal regulations and describes temporary changes to Fannie Mae and Freddie Mac appraisal standards that can assist lenders during this challenging time. The agencies will continue to communicate with the industry, as appropriate, as this situation evolves.

NCUA on Working Remotely
The NCUA has issued guidance on “Cybersecurity Considerations for Remote Work,” stating that credit union employees working remotely should adhere to their organizations’ information-security and privacy-related policies and procedures. Read more here.

CLF Enhanced for CUs
The NCUA Board also unanimously approved an interim final rule that enhances the ability of the CLF. It strengthens the NCUA’s regulations on the CLF to supplement legislative changes resulting from the CARES Act; adds greater flexibility and relief for member credit unions; and makes it easier for credit unions to join the facility as a regular member or through a corporate credit union. Read more here.

LICU Funding Increased for COVID-19
The NCUA announced it is committing the majority of the 2020 Community Development Revolving Loan Fund appropriation for COVID-19 assistance. The more than $1.37 million for grants to eligible low-income credit unions is an increase of $575,000 from the original $800,000 announced in late March.

Federally insured low-income credit unions have until May 22 to apply for the COVID-19 emergency response grants through the NCUA’s CyberGrants portal. (Click here and look for the “CyberGrants portal” web link in fourth paragraph)

DBO: Annual Meetings in California
The California Department of Business Oversight (DBO) is permitting virtual annual meetings of members and virtual regular board of director meetings during the COVID-19 crisis.

The DBO recognizes that social distancing may necessitate holding annual meetings of members and regular board of director meetings via videoconference or teleconference rather than in person. In guidance dated March 22, 2020, the DBO said it will not criticize credit unions that conduct meetings virtually in violation of the credit union’s own bylaws. No additional guidance is provided regarding virtual meetings.

The California Credit Union League recommends that a credit union’s annual meeting notice include appropriate instructions on how to join, participate, and vote during the virtual meeting. The League also recommends your credit union consult with its portfolio manager and/or legal counsel.

Nevada FID: Proposed SB 201 Database
The Nevada Financial Institutions Division (FID) has posted updated proposed regulations that adopt the database required by Senate Bill No. 201 (2019). Beginning July 1, 2020, payday lenders are required to enter each approved loan in the database and are required to check the database before issuing a new loan as part of their procedures to determine ability-to-repay and ensure a consumer doesn’t have another open payday loan.

While the regulations do not apply to credit unions, the Nevada Credit Union League knows some credit union leaders still might be interested in the rulemaking activities. The FID has posted a meeting notice for a regulatory workshop on April 29, 2020, an updated version of the regulations, and responses to the FID’s request for small business impact statements.

The agenda, regulations, impact statements, bill language, and other documents can all be found in a single document here.

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