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The NCUA Board on Thursday advanced a proposed rulemaking intended to simplify compliance requirements and provide credit unions with more flexibility under regulations regarding supervisory committees' responsibilities in obtaining an annual audit of its credit union.

Happening concurrently with the meeting was the Senate Banking Committee hearing considering the nominations of Rodney Hood and Todd Harper to the NCUA Board (read more here).

The proposal stems from the agency's Regulatory Reform Task Force's recommendations and was included on its fall rulemaking agenda.

The proposed rulemaking would make three changes:

• remove the reference to the NCUA's Supervisory Committee Guide and replace it with an option to conduct an audit to meet certain minimum requirements outlined in a new appendix, which reflects common industry practices for testing accounts and controls over financial institution financial statements;
• eliminate the 120-day time frame requirement that an engagement letter specify a target date of delivery of written reports, and instead only require a credit union to specify a target delivery date that enables the credit union to timely meet its annual audit requirements; and
•  remove the option to obtain a report on examination of internal controls over call reporting.

The proposal will be open for a 60-day comment period once published in the Federal Register; NAFCU will review and provide comments.

Also during the meeting, the board received a briefing on a now final interagency rule that requires mortgage lenders to accept both private and government-backed flood insurance policies. It was noted that the NCUA approved the rule at the end of last month by notation vote.

A new NAFCU Compliance Blog post further explains the private flood insurance rule.

The NCUA Board will next meet March 14.