Proposed Regulations

The Internal Revenue Service (IRS) has issued a notice of proposed rulemaking containing proposed amendments to income tax regulations promulgated under section 401(a) of the Internal Revenue Code.

Recently, the National Credit Union Administration (NCUA) published a request for comments and suggestions on ways it can identify and reduce regulatory burdens with respect to share account – deposit relationships and miscellaneous consumer rules that may be outdated, unnecessary, or unduly burdensome.

Recently, the Federal Reserve Board (Board) proposed guidance on overdraft protection programs, amendments to Regulation DD, and additions to the staff commentary to the Regulation DD. Both the guidance and the amendments are concerned with the current disclosures and practices by financial institutions with respect to the treatment of overdrafts.

Recently, NACHA—The Electronics Payments Association (NACHA) issued a proposed rule to modify the provisions of the Operating Rules to allow unauthorized entries that are transmitted to consumer accounts and incorrectly bear corporate Standard Entry Class (SEC) Codes (CCD, CTX, or CBR) to be returned within a sixty-day time frame.

Recently, the National Credit Union Administration (NCUA) approved an interim final rule to amend 12 C.F.R. Part 707 and its official staff interpretation. Part 707 implements the Truth in Savings Act (TISA).

The National Credit Union Administration (NCUA) has published for comment proposed changes to the rule on uninsured secondary capital accounts. The proposed changes include a new subsection allowing low- income designated credit unions to redeem discounted secondary capital under certain conditions, and eliminating the existing restriction on redemption in section 701.34(b).

National Credit Union Administration (NCUA) and other financial regulators, issued a proposed advisory regarding the unsafe and unsound use of limitation of liability provisions and certain alternative dispute resolutions in external audit engagement letters. The proposal advises the credit union's board of directors, audit committee and management that they should not enter any agreement that contains external auditor limitation of liability provisions with respect to financial statement audits.

The Board of Governors of the Federal Reserve System (Board) has issued an advance notice of proposed rulemaking to amend 12 C.F.R. § 226, “Regulation Z,” which implements the Truth in Lending Act. The proposal seeks to begin a review of open-end credit rules in the following three categories: (1) the format of open-end credit disclosures; (2) the content of the disclosures; and (3) the substantive protections provided by the regulation.

On June 28, 2006, NCUA published a proposed rule to amend its rules and regulations regarding the conversion of insured credit unions to mutual savings banks or mutual savings associations. The revisions are intended to improve the information available to members and the board of directors. The proposed rule provides for revised disclosures, revised voting procedures, procedures to facilitate communications among members, and procedures for members to provide their comments to directors before the credit union board votes on a conversion plan.

Recently, the National Credit Union Administration (NCUA) issued proposed amendments to its rules regarding field of membership requirements and service to underserved areas.

This review is in connection with the agency's larger initiative to maintain the competitiveness of United States capital markets.

Recently, the Board of Governors of the Federal Reserve System (Board) published in the Federal Register a notice of public hearing and request for public comment on the home equity lending market.

Recently, the National Credit Union Administration (NCUA), along with the other federal financial institutions regulators (collectively, the Agencies), issued a joint proposed rule to amend its rules implementing the privacy provisions of the Gramm- Leach-Bliley Act (GLB Act). The Agencies were required by section 728 of the Financial Services Regulatory Relief Act of 2006 (Regulatory Relief Act) to propose a safe harbor model privacy form that financial institutions may use to provide disclosures under the Agencies' privacy rules.

Recently, the Board of Governors of the Federal Reserve System (Board) issued proposed amendments to Regulation D and Regulation I. The amendments include two substantive changes from existing law along with several editorial changes and amendments for clarification.

Recently, the National Credit Union Administration (NCUA) issued a proposed rule to amend its regulations governing Freedom of Information Act (FOIA) requests. The proposed rule would make several housekeeping changes, but also clarify where requests must be sent, how requests must be addressed, and what information must be included in a request.

NCUA's longstanding policy is to review, on a rolling basis, a third of its regulations each year in order to update, clarify, and simplify existing rules and eliminate redundant or unnecessary provisions. See IRPS 87-2. The proposal is a product of the agency's 2007 regulatory review.

Recently, the National Credit Union Association (NCUA) issued an interim final rule regarding its share insurance rules for revocable trust accounts. The interim rule was issued just days before the enactment of the Emergency Economic Stabilization Act of 2008, by which Congress increased share insurance coverage of accounts covered from $100,000 to $250,000. Thus, the effect of the increase in coverage is not reflected in the interim final rule; however, by operation of law, coverage will generally henceforth be up to $250,000 per account beneficiary (maximum of $1.25 million per account) until December 31, 2009. The amount will revert back to $100,000 per beneficiary (maximum of $500,000 per account) unless Congress amends the expiration date.

Under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), the NCUA and the banking regulatory agencies are required to prescribe real estate appraisal standards in connection with “federally related transactions,” which are generally defined as transactions that the Agencies regulate. See Pub. L. 101-73, 103 Stat. 183 (1989). The standards are required to be in accordance with generally accepted uniform appraisal standard promulgated by the Appraisal Standards Boards of the Appraisal Foundation (Appraisal Board).

Congress enacted TILA to regulate certain credit practices and promote the informed use of consumer credit by requiring uniform disclosures about its costs and terms. Under TILA section 128, creditors must provide TILA disclosures to consumers in writing before consummation of certain closed-end credit transactions. Exemptions are provided for a limited number of transactions.

The rule requires financial institutions to adopt reasonable procedures to ensure that periodic statements are mailed to consumers at least 21 days before the payment is due. Notably, this 21 day requirement applies to credit cards and “all open-end consumer credit plans.”

The NACHA Operating Rules (Rules) currently require credit unions to make adjustment entries within 60 days after the settlement date. This has proven difficult to meet in some cases where a claim of unauthorized entry is made within the allowable period of 60 days from the transmittal showing the unauthorized transaction.