Four new deregulation proposals announced by NCUA
The NCUA announced the fourth round of proposed regulatory changes as part of its Deregulation Project Tuesday. Proposed rules include:
- Requirements for Insurance; Maximum Borrowing Authority would remove the maximum borrowing authority stated at 12 CFR 741.2 (limiting aggregate borrowing from any source to an amount not in excess of 50% of its paid-in and unimpaired capital and surplus). Currently, 12 CFR 741.2 applies to all federally insured credit unions (FICUs) as a condition for obtaining and maintaining federal share insurance with the share insurance fund.
- Public Unit and Nonmember Shares would remove the requirement under 12 CFR 701.32(b)(2) for a written plan to document the intended use of any borrowings, public unit, or nonmember shares if those funds collectively exceed 70% of the FICU’s paid-in and unimpaired capital and surplus. FICUs exceeding the 70% limit must maintain a written plan and make it available to NCUA examiners, but preapproval would not be required.
- Notice of Termination of Excess Insurance Coverage would amend the NCUA’s rules under 12 CFR 741.5 to remove the 30-day notification requirement before the effective date of any termination of that excess share insurance coverage and instead simply require FICUs to notify members before any excess share insurance coverage is terminated.
- Requirements for Insurance would eliminate 12 CFR 741.10 as unnecessary and redundant to the disclosures FICUs are already required to make as part of their agreement for maintaining federal share insurance.
Watch for upcoming Regulatory Comment alerts from America’s Credit Unions requesting member feedback on the proposals.