Agency Renews PCA Relief; Hires CUNA's Elizabeth Eurgubian

Elizabeth Eurgubian, the new Director of External Affairs and Communications and Policy Advisor for the National Credit Union Administration (NCUA)
Elizabeth Eurgubian, the new Director of External Affairs and Communications and Policy Advisor for the National Credit Union Administration (NCUA)

During this month's meeting, the National Credit Union Administration (NCUA) board unanimously approved two items: 1) an interim final rule that extends two temporary changes to the prompt corrective action (PCA) regulations; and 2) a notice of proposed rulemaking for assigning certain federally insured credit unions to the appropriate NCUA supervisory office.

The board also received a briefing regarding the National Credit Union Share Insurance Fund’s (NCUSIF) performance during the fourth quarter of 2021.  

Below are the key takeaways:

Interim Final Rule: Prompt Corrective Action (PCA) (Part 702)
This interim final rule maintains flexibility currently in place by an interim final rule that is set to expire March 31, 2022.

First, the rule temporarily extends the board’s ability to issue an order applicable to all federally insured credit unions (FICUs) to waive the earnings retention requirement for adequately capitalized credit unions. Second, the rule extends a provision that modifies the specific documentation required for net worth restoration plans for FICUs that become undercapitalized. These temporary modifications will remain in place until March 31, 2023.

NCUA will accept comments for 60 days following publication of the proposal in the Federal Register.

The Leagues and CUNA have consistently pressed the NCUA to maintain these flexibilities, including most recently in a January letter to the board.

Proposed Rule: Asset Threshold for Determining Appropriate Supervisory Office (Parts 700, 701, 702, 708a, 708b, 750, & 790)
The board issued a proposed rule that would increase from $10 billion to $15 billion the asset threshold for supervision by the Office of National Examinations and Supervision (ONES).

The proposed rule would provide that covered credit unions with less than $15 billion in total assets (tier I covered credit unions) not currently supervised by ONES will be supervised by the appropriate NCUA Regional Office. Tier I covered credit unions currently supervised by ONES and covered credit unions with $15 billion and more in total assets (tier II and tier III covered credit unions) would continue to be supervised by ONES.

The proposal would not alter any regulatory requirements for covered credit unions. As such, the threshold for the capital planning and stress testing requirements would be unchanged.

NCUA will accept comments for 60 days following publication of the proposal in the Federal Register.

Share Insurance Fund Quarterly Report
The report on the share insurance fund showed total income of $61.9 million and net loss of $12.6 million for the quarter ending December31, 2021. The balance sheet indicated total liabilities and net position of $20.735 billion, a slight decrease from the previous quarter. The fund’s reserve balance stands at $162 million as of the end of the fourth quarter, with $6.6 million being for specific reserves. In all of 2021, there were seven credit union failures for a total loss of $5.6 million. The number of CAMEL Code 4/5 credit unions decreased slightly from the preceding quarter to 129; CAMEL Code 3 credit unions also decreased slightly to 752. Overall, 97.5% of assets are held by CAMEL Code 1/2 credit unions, a slight increase from the preceding quarter.

As of December 31, the equity ratio of the share insurance fund is 1.26 percent. The ratio is updated twice a year. The ratio was 1.23 percent as of June 2021.

Eurgubian Named Director of External Affairs and Communications and Policy Advisor
This week, NCUA Board Chairman Todd Harper announced the appointment of Elizabeth Eurgubian as director of external affairs and communications and policy advisor, effective Feb. 14, 2022.

“Elizabeth is a well-known expert on financial services regulatory policy and compliance,” Harper said. “She not only knows the industry well, but she also understands how policies affect credit unions and their members. Plus, she communicates those issues in effective, clear, and logical ways. So, I am confident Elizabeth will hit the ground running in support of the agency’s strategic goals and priorities of ensuring the safety and soundness of the credit union system and protecting credit union members.”

Eurgubian said she is honored to join the NCUA and the team of dedicated people that serve the credit union industry and its members. “The work of the NCUA is critical to ensuring that credit unions meet the financial needs of the millions of Americans that rely on them in the most effective way possible," she said. "I look forward to working with Chairman Harper and the NCUA Board on this important mission.”

In her new role, Eurgubian will lead the agency’s communication and congressional affairs initiatives and serve as a policy advisor to the chairman.

Prior to joining the NCUA, Eurgubian was the deputy chief advocacy officer and senior counsel for regulatory and executive branch relations at the Credit Union National Association (CUNA). At the Independent Community Bankers of America, she served as vice president and senior regulatory counsel. She also worked as assistant general counsel for Sallie Mae, Inc. and as an attorney for the Board of Governors of the Federal Reserve System. Prior to her legal work at the Federal Reserve, she was the assistant director of legislative affairs for the National Mental Health Association. She also worked as a law clerk for the U.S. House of Representatives Office of the General Counsel.

Eurgubian earned her law degree from American University, Washington College of Law, and her bachelor’s degree in international relations from the University of Southern California (USC).

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