Proposed Regulations

On September 24, 2003, NCUA issued a proposed rule updating its rule regarding the conversion of insured credit unions to mutual savings banks. The proposed rule seeks to increase disclosure requirements to ensure that the credit union's notice of conversion to its members provides full disclosure and transparency

On March 27, 2003, the National Credit Union Administration published proposed revisions to the member business loan regulation and related provisions in the prompt corrective action, corporate credit union, and credit union service organization rules.

As required by the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), the proposed regulation improves the notice that informs consumers of their right to opt-out of prescreened solicitations for credit or insurance. The proposed rule: 1) establishes certain baseline requirements for language and syntax that effectively convey the intended message to the reader, and 2) establishes guidelines for presentation and format that call attention to the notice and enhance its readability.

The proposed amendments are meant to clarify the relationship between the prior notice provision and the commencement of service provision, so as to eliminate potential confusion. Additionally, the amendments attempt to reorganize the requirements in the current rule making it easier to understand.

Recently, the Federal Reserve Board (Board) issued a notice of study and request for information regarding disclosure practices with regard to debit card purchases. Specifically, the Board is concerned about fees imposed in point-of-sale (POS) debit transactions when customers provide their personal identification number (PIN). The current rules governing fee disclosure are the Electronic Fund Transfers Act (EFTA), and Regulation E.

The proposed rule will authorize all federal credit unions and corporate credit unions to invest in exchangeable collateralized mortgage obligations representing interests in one or more stripped mortgage backed securities, subject to safety and soundness concerns. Additionally, the proposed rule contains miscellaneous technical revisions and clarifications to Part 703 and Part 704.

The Federal Reserve Board (Board) has issued a proposed rule to amend Regulation E, which implements the Electronic Fund Transfer Act (EFTA), and the accompanying official staff commentary. The Board has proposed revisions that would clarify the disclosure requirements imposed on operators that charge a fee on a consumer when initiating and electronic fund transfer or balance inquiry at an ATM.

In fulfilling the requirements of the EGRPRA, NCUA desires to reduce regulatory burden while ensuring the continued safety and soundness of federally insured credit unions and appropriate consumer protections.

Recently, the Federal Reserve Board (Board) published a request for comment on proposed amendments to Regulation CC and Regulation J that would define “remotely created checks.”

A recent amendment to the Small Business Act authorizes the Small Business Administration (SBA) to assess fees to lenders participating in SBA's 7(a) loan guarantee programs to cover the costs of examinations, reviews and other oversight activities. The proposed rule describes the methodology for fee assessment.

Recently, the Small Business Administration (SBA) proposed for comment a lender risk rating system to assist SBA in assessing the risk of each active 7(a) Lender and Certified Development Company's (SBA Lender) SBA loan operations and portfolio. The proposed rating system would assess each active SBA Lender's risk on a uniform basis and identify those institutions whose SBA loan operations and portfolio require additional monitoring or other action. The proposal would also enable the agency to assess the aggregate strength of its 7(a) and 504 portfolios.

The proposal would allow Originators, and originating depository financial institutions acting as Originators, to accept checks at the point-of-purchase or at manned payment locations and convert the checks to ACH debits during back office processing.

Recently, the National Credit Union Administration (NCUA) issued an Advanced Notice of Proposed Rulemaking (ANPR) regarding permissible foreign currency investments for federal credit unions and corporate credit unions. The ANPR follows a rule adopted by the NCUA last year which permitted federally insured credit unions to accept member shares denominated in foreign currency.

On April 30, 2007, the Board of Governors of the Federal Reserve System published in the Federal Register proposed rules amending Regulations B, E, M, Z, and DD. Generally, the proposed rules withdraw provisions in each regulation added by interim final rules in 2001 to implement the Electronic Signatures in Global and National Commerce Act (E-Sign Act).

On February 5, 2007, the Federal Deposit Insurance Corporation (FDIC) issued for public comment a proposed rule to strengthen the regulatory framework for consideration of applications or notices for industrial banks or industrial loan companies (ILCs) owned by financial companies that are not subject to consolidated supervision by the Federal Reserve Board or the Office of Thrift Supervision.

Recently, the Fannie Mae entered into a Cooperation Agreement (Agreement) with the Office of Federal Housing Enterprise (OFHEO) and the New York Attorney General's Office to adopt a Home Valuation Protection Code (Code). As part of the agreement, Fannie Mae, along with Freddie Mac and other industry players, will also contribute to the establishment of an Independent Valuation Protection Institute (Institute). Fannie Mae has requested comments from its customers a

As directed by the Bank Secrecy Act (BSA), the Department of Treasury's FinCEN requires financial institutions, including credit unions, to report transactions in currency in excess of $10,000. The Money Laundering Suppression Act of 1994 amended the BSA by establishing a statutory system of exempting transactions by certain customers of depository institutions. This system devised two types of exemptions: mandatory exemptions and discretionary exemptions.

The proposed rule would modify the calculation of net worth ratio in cases involving mergers of natural person credit unions so that the post-merger ratio would be calculated by dividing the sum of the acquiring credit union's retained earnings and the merging credit union's retained earnings by the total assets (under GAAP, total assets are the sum of the acquiring credit union's total assets at book value and the merging credit union's total assets at fair value).

Recently, the National Credit Union Administration (NCUA) issued a proposed rule to revise its rules relating to the accuracy of advertising and notice of insured status. Specifically, the proposed changes seek clarify and reduce the burden of existing rules regarding shared branch networks which include nonfederally-insured credit unions.

Corporate credit unions have played an important role in the credit union industry. They provide critical services to natural person credit unions, including payment and clearing services, enabling access to wire transfer facilities and automated clearing house transactions, as well as loan and investments services that provides small credit unions to achieve economies of scale and access to greater market returns otherwise unavailable to them. They have also been an important source of liquidity for credit unions, and have served as agents for the NCUA on loans funded by the NCUA's Central Liquidity Facility.

In response to questions concerning the interagency guidelines issued by the National Credit Union Administration (NCUA), Federal Reserve, and Office of Thrift Supervision (OCC), the agencies issued new, amended guidelines.