ALEXANDRIA, Va. — In its final meeting of the year, the NCUA Board reduced the budget for the Temporary Corporate Credit Union Stabilization Fund by over 20% for the second year in a row.
The fund currently has nearly $3.9 billion in assets as of Sept. 30. Credit unions will not be required to pay an assessment to operate the fund next year.
At the meeting, the board also finalized rules allowing federal credit unions to establish charitable donation accounts.
The accounts let the sponsors make charitable contributions with investments that have higher expected rates of return than federal credit unions are usually allowed.
A minimum of 51% of the return of the accounts must be distributed to 501(c)3 charitable organizations at least once every five years. The original guidelines were altered in the end to let credit unions deduct fees and expenses before computing return rates as long as the sums did not go to the sponsoring credit union or an affiliate.
In a change to the September proposed rule, the total charitable donation account cap for a federal credit union has been raised from 3% to 5% of the institution's net worth. A large part of the rationale was to align the cap with the limit for private welfare investments by banks.
Additionally, a trustee now can be registered with either the Office of the Comptroller of the Currency or the Securities and Exchange Commission instead of both.
No More Home-Based CUs
The board also voted to move the few (93) holdouts into the 21st century by barring home-based credit unions in two years, requiring all federally chartered credit unions to have a commercial location and either a dedicated phone line or e-mail address.
Matz said banning home-based federal credit unions is necessary to protect examiners, records and member privacy. The chairman added that examiners have been bitten by dogs, exposed to allergens and faced with extremely hot and cold conditions when visiting home-based institutions.
She noted sometimes records in the home headquarters are at risk from accidental destruction because they are stored in damp basements or near water heaters. Matz added the privacy of the records is also at risk because they can be found by residents and visitors to the home in addition to intruders.
Stories given by NCUA staffers to support the new regulation bordered on the comical at times.
One small credit union operator told the agency he had an e-mail account, but he never looked at it. A retired teacher who ran a credit union out of her residence told NCUA staffers she feared if she was required to set up a separate office, people would not call her at home.
Michael Fryzel was the lone board member objecting to eliminating home-based federal credit unions. "If their members are happy, NCUA should not intrude on that," he said.
NCUA is offering grants and advice to help the home-based credit unions find retail sites.
The board also finalized a rule to make the agency in accordance with the bank regulators in providing Truth In Lending mortgage rule exceptions for transactions secured by existing manufactured homes and not land and streamlined refinancings.
The new rule goes into effect Jan. 18.
CAMEL News
The board unanimously approved technical amendments to conform to a recent policy change that ended the use of the Corporate Risk Information System to evaluate corporate credit unions and replaced it with the CAMEL rating system.
These amendments just update NCUA's regulations to reflect the adoption of the new system for rating corporate credit unions.
Earlier this year, the board approved applying the CAMEL rating system currently used by consumer credit unions to corporate credit unions to improve consistency and understanding of the risk evaluations for corporate CUs.
NCUA will begin evaluating corporate credit unions under the CAMEL system on Jan. 1.
