The NCUA’s Dec. 6 board meeting agenda includes a final rule that was proposed nearly two years ago, a housekeeping rule leftover from the elimination of RegFlex, two community charter applications and the 2013 corporate stabilization budget.
The first item on the agenda is a final rule first introduced in February 2011 that would remove references to credit ratings in NCUA regulations as they apply to the required internal credit analysis of investments by credit unions.
The rule is mandated by the Dodd-Frank Act following the overreliance financial institutions placed on credit ratings of mortgage-backed securities; that practice still affects credit unions to this day as they continue to pay corporate assessments to cover losses on investments that were at one time rated AAA.
Back in May 2011, NAFCU General Counsel Carrie Hunt expressed concern about the proposed rule, because it would increase the costs associated with analyzing investments.
Hunt requested that the NCUA withdraw the proposed rule and instead pursue changes to Dodd-Frank that would give the agency more flexibility in revising regulations relative to credit rating references.
“NAFCU believes that NCUA, as the Chair of the Federal Financial Institutions Examination Council, is in a strong position to facilitate legislative changes to Dodd-Frank,” she wrote in the comment letter still posted on the NCUA’s website.
Also on the agenda is a final rule regarding fidelity bond and insurance coverage for federal credit unions that was a byproduct of the board’s May rule that eliminated RegFlex.
Two credit unions – the $91 million Focus FCU of Oklahoma City and the $274 million The Atlantic FCU of Kenilworth, N.J. – will have applications to convert to a community charter reviewed and approved or denied by the board. Finally, the agenda includes the presentation of the Temporary Corporate Credit Union Stabilization Fund budget.
The closed meeting agenda includes a creditor’s claim appeal, the termination of investment pilot programs, presumably including the pilot program that tested TIPS, which were approved for credit unions by the NCUA last month, and a personnel matter.
