The National Credit Union Administration board on Thursday unanimously approved a final rule aimed at clarifying regulations on lending and lines of credit. Earlier this week the two board members
The move came during the agency’s March open board meeting at its Alexandria, Va. Headquarters. Among other measures, the final rule places all maturity limits applicable to federal credit union loans within the same section of the rule’s text while also clarifying calculations for a new loan's maturity from its new date of origination. NCUA's actions also describe loan limits to a single borrower or group of associated borrowers.
Last week lawmakers put forward a
“I think this is exactly the type of cleanup rule we should be promulgating,” Chairman J. Mark McWatters said during the meeting. “It will make it easier for someone who is new to this area to see what all of the law is in one section as opposed to thinking they see it but not realizing that 100 pages later something else is relevant.”
The final rule will go into effect 30 days after it is published within the Federal Register.
The National Association of State Credit Union Supervisors issued a statement after the meeting praising the board for tweaking the rule.
“NASCUS appreciates NCUA’s efforts to bring clarity to its rules, reduce the regulatory burden and make compliance easier,” said NASCUS President and CEO Lucy Ito. “While not all NCUA lending limits apply to state-chartered credit unions, we are carefully reviewing the final rule to determine its impact on state-chartered credit unions and to ensure there are not any unintended consequences for the institutions.”
The meeting also included an update on the National Credit Union Share Insurance Fund, which – along with Operating Fund, Central Liquidity Facility and Community Development Revolving Loan Fund – received a clean audit for 2018.
The share insurance fund which reported a net income of $226.5 million and a $15.7 billion net position for 2018. Assets within the fund declined 5.5 percent to 15.8 billion year-over-year from the 16.7 billion reported in 2017.
With the share insurance fund’s equity ratio staying put at 1.39 percent, the board last week
The board also pointed to a slight drop of involuntary liquidations and assisted mergers in 2018, with just eight last year compared to 10 credit union failures in 2017. Of those 10, five were involuntary liquidations while the other five were assisted mergers. The cost differential is notable, however, having been $24.4 million in 2017 and shooting up to $792.5 million in 2018, largely as a result of the closure of Melrose CU.
The March board meeting is likely to be the last for board member Rick Metsger, who has been on the panel since 2014. Rodney Hood and Todd Harper, both nominated by President Trump, are
