January 16, 2014

NCUA eyes rule tweaks suggested by NAFCU

Jan. 17, 2014 - NCUA is considering a number of recommendations submitted by NAFCU - and included in the association's own "dirty dozen" list - as it reviews possible changes in rules on incidental powers, member business lending and appraisals.

The recommendations NCUA is reviewing are detailed in a report from the NCUA Office of General Counsel on the agency's 2013 regulatory review.

The report says the NCUA Board may look into expanding credit unions' incidental powers and allowing them to securitize their own loans, a change NAFCU has pushed for. The agency board is also slated to consider a final rule next week on derivatives. NAFCU has long sought authority for credit unions to invest in derivatives as a hedge against interest-rate risk, but it lodged concerns over specifics of the agency's proposed rule.

In other report details:

  • The agency is looking at possible updates to the MBL rule to "reflect the current business climate" and address valuation issues (such as the calculation of market value in construction-related business loans), the personal guarantee requirement and the two-year direct experience requirement - all of which were urged by NAFCU.
  • NCUA is examining its credit union service organization rule. NAFCU has raised concerns about NCUA's authority in issuing this rule, which requires CUSOs to provide information directly to the agency and state authorities annually.

NAFCU-backed changes were also noted in the report's summaries of other issues, including modernizing advertising rules, rules on notification of credit unions' insurance status and possible removal of redundant appraisal requirements.