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During its open meeting Thursday, the NCUA Board approved of decreasing the National Credit Union Share Insurance Fund's (NCUSIF) normal operating level (NOL) from 1.39 to 1.38 percent effective immediately. The agency said it is committed to reviewing the NOL every year. NAFCU will continue to fight to lower the NOL back to 1.3 percent.

"This decrease is a positive development and we thank the NCUA for taking this step," said NAFCU Chief Economist and Vice President of Research Curt Long. "We strongly support safety and soundness, but just as strongly support NCUA reducing the NOL to potentially allow for further distributions beyond what was issued in 2018."

If the equity ratio as of Dec. 31 is above the normal operating level, which will be known in February, and the other statutory criteria are met, there will be a distribution sufficient to bring the equity ratio down to the normal operating level, the NCUA said. This distribution would occur no later than the end of the second quarter of 2019.

The NCUA voted September 2017 to merge the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) with the NCUSIF. At the same time, NCUA also elected to raise the NOL of the NCUSIF to 1.39 percent. As a result of this merger, credit unions received $735.7 million in distributions from the NCUSIF in July. NAFCU supported this distribution but wants the industry to receive as much money back as possible, as soon as possible.

Also during Thursday's meeting:

• The board approved of the NCUA Regulatory Reform Task Force's second and final report that detailed actions the agency has taken to provide more relief to credit unions, including finalizing field-of-membership and advertising changes and delaying its risk-based capital rulemaking. The report also touches on what activities the agency plans to address, such as subordinated debt (formerly alternative capital), credit union service organizations (CUSOs) and a variable interest rate. It also indicates that the agency will issue a proposed rulemaking next year to provide NAFCU-sought guidance related to some senior executive compensation plan practices. This task force was created in response to an executive order requiring certain federal agencies to evaluate and identify existing regulations that should be repealed, replaced or modified. Though the NCUA does not fall under the executive order's scope, the agency followed the spirit of the order. NAFCU has previously offered feedback on ways the NCUA could strengthen and reprioritize its regulatory reform agenda; many of these recommendations were adopted into this report.
• The board heard a briefing on blockchain and distributed ledger technology that outlined various regulatory risks, including safety and soundness concerns. NAFCU continues to be a leader in connecting credit unions to those developing blockchain technologies through partnerships with Hyperledger and Enterprise Ethereum Alliance. Blockchain technology is anticipated to change smart contracts, identity management and account creation.
• The board adopted a final rule making a number of technical amendments to the NCUA's regulations to correct minor errors and inaccurate citations. The final rule also rescinds some provisions that were transferred over to the Bureau of Consumer Financial Protection regarding the Fair Credit Reporting Act.