September 02, 2014

MBL, bylaws noted in NAFCU letter on NCUA reg review

NAFCU's Carrie Hunt thanked NCUA for voluntarily participating in a review of some of its regulations deemed outdated, unnecessary or unduly burdensome and recommended changes to the agency's rules on member business lending, bylaws and credit union mergers, among other topics, in a letter Tuesday.

Hunt, NAFCU's senior vice president of government affairs and general counsel, wrote NCUA regarding its request for comments on the review of rules and regulations pursuant to the Economic Growth and Regulatory Paperwork Reduction Act.

NCUA's MBL regulation "is far too restrictive and cumbersome," Hunt wrote. She discussed NAFCU's "Dirty Dozen" list of regulatory issues that should be eliminated or amended and said there are several aspects of the MBL regulation that can be improved, including the waiver requirement and process. She also noted, regarding the MBL cap, that the agency should utilize its statutory authority to provide a more meaningful exception to the MBL cap. "NAFCU and our members believe that a credit union that has had a successful MBL program in place for a period of five years or greater would be a reasonable basis to satisfy this statutory authority," she wrote.

Regarding credit union bylaws, Hunt outlined additional revisions that will "further modernize outdated procedures." She recommended, for example, amending the bylaws to reflect that credit unions "are allowed to approve loans through technological services, as long as they use the appropriate safeguards determined by NCUA and their individual internal policies."

    Hunt also asked that NCUA release substantive guidance on mergers. "NCUA has failed to issue guidance for the operation issues that arise on the backend as credit unions execute the merger," Hunt wrote. "NAFCU continues to hear from its members that credit unions need updated substantive guidance on how to conduct a merger."

    In her letter to NCUA, Hunt also addressed field of membership and chartering issues, fees paid by federal credit unions, investments and deposit activities, fixed assets and credit union service organizations.