NCUA to Release Corp Revenue Rule
While credit unions are digesting the new corporate credit rules, the NCUA is preparing to release a new one that will address revenue issues.
Next month, the agency plans to unveil a proposed rule that will further regulate corporate credit unions' ability to generate revenues.
Federally chartered corporates would be permitted to assess annual membership fees and increase the amount of retained earnings. Natural person credit unions would only be permitted to join one corporate. The rule will also outline the rules for the corporate system to set up a risk mitigation committee.
In addition, the rule would require credit union boards to have a recorded vote on each item. The rule will also spell out how credit unions without federal deposit insurance can be levied an assessment to pay for the rescue of the troubled corporate credit unions.
NCUA General Counsel Robert Fenner and other agency officials have discussed some of the proposals and others were discussed by industry officials who have been briefed on the subject.
The agency is scheduled to unveil the proposed rule at its Nov. 18 meeting. The agency is also scheduled to release the likely range of assessments for next year to shore up the NCUSIF and to repay the loan from the Treasury needed to rescue corporate credit unions.
Once the agency issues the proposed rule, there will be a 30-day public comment period.
The NCUA is also seeking comments on its proposed rule on chartering corporate credit unions.
The agency wants people who are applying to charter a corporate to be "competent, experienced, honest and of good character."
In addition, they must demonstrate the depth of their support from prospective members and lay out in great detail current and projected market conditions.
The agency's proposal requires that at least seven people submit the charter application, and they must demonstrate that there is a "sufficient customer base," as evidenced by surveys or written comments. The applicants would also be required to present a business plan that covered items such as written policies for shares, lending and funds management, and semiannual projected financial statements for the first three years of the corporates' operation.
The charter application would be reviewed by the agency's Office of Corporate Credit Unions, which will meet with applicants within 30 days of the application having been filed. After the agency does all its reviews, the field staff will make a recommendation. Then the office has 30 days to make a recommendation as to whether it should be forwarded to the full NCUA board. The board would have 60 days to act on the application.
The deadline for submitting comments on the chartering rule is Nov. 1.
The NCUA will review the comments and issue the final interpretive rule and policy statement.
Currently, there is no guidance for persons who want to charter federal corporate credit unions.