September 11, 2020

Real estate appraisals, BSA exemption among items on NCUA agenda

ncuaThe NCUA Board next week is set to issue a final rule related to real estate appraisals and an exemption under the Bank Secrecy Act's (BSA) customer identification program (CIP). The board will also receive a briefing on the National Credit Union Share Insurance Fund's (NCUSIF) quarterly report and an update on the Modern Examination and Risk Identification Tool (MERIT).

NAFCU Thursday hosted a complimentary webinar – now available on demand – to update credit unions on the status of the NCUA's virtual examination program featuring representatives from the agency who also provided an overview of the MERIT platform.

Real Estate Appraisals

Real estate appraisals have been a recent focus of relief: During the NCUA's April board meeting, the board approved two rules related to real estate appraisals.

The first rule was a final rule which raised the real estate appraisal threshold from $250,000 to $400,000 and, in addition to providing parity with banks, ensured that credit unions are not unfairly disadvantaged in the marketplace.

The second rule was an interim final rule, allowing credit unions to defer the requirement to obtain an appraisal or evaluation for up to 120 days following the closing of a transaction for certain residential and commercial real estate transactions amid the coronavirus pandemic.

NAFCU offered recommendations to further support relief under the interim rule and urged the NCUA to extend the expiration date of the rule from Dec. 31, 2020, to the end of the first quarter of 2021 and provide credit unions 120 days from that point to obtain any required appraisal or written estimate.

BSA, CIP Exemption

Federal banking agencies, including the NCUA and Federal Reserve, last month issued an interagency statement to update their existing guidance on enforcement of required BSA/anti-money laundering (AML) obligations. 

While the statement did not create new expectations or standards, it clarified that isolated or technical violations generally do not result in an enforcement action and addressed how the agencies evaluate violations of individual components of the BSA/AML compliance program.

BSA/AML compliance is one of the NCUA’s 2020 supervisory priorities.  In addition, BSA/AML reform is one of NAFCU's advocacy priorities for 2020, and the association has previously urged the Senate to advance BSA/AML legislation as the House last year passed NAFCU-supported legislation to reduce the burden of suspicious activity report (SAR) and currency transaction report (CTR) filings. View NAFCU's resources on BSA/AML, including a webinar and previous blog posts (here and here).

The meeting is set to begin at 10 a.m. Eastern and is only available via webcast. Following the open meeting, the board will meet privately to discuss a supervisory matter.

NAFCU will monitor next week's meeting and update credit unions via NAFCU Today. The board will next meet Oct. 15; view the 2020 meeting dates.