The NCUA’s proposed rules on emergency liquidity, CUSOs and loan participations aren’t likely to be finalized until late 2013, if at all next year, said Deputy Director of Examination and Insurance Tim Segerson.
Segerson made the announcement in response to a question from the audience during a Dec. 5 compliance webinar sponsored by Credit Union Times and the Credit Union Leadership Forum.
The webinar also featured Anne Flannery, a New York-based senior partner in the securities enforcement and litigation practice at Morgan Lewis, and Stuart R. Levine, former CEO of Dale Carnegie & Associates, who is now author and speaker on strategic planning and leadership development. Credit Union Times Publisher/Editor-in-Chief Sarah Snell Cooke served as moderator
Segerson told his audience of 250 participants that the NCUA has slowed its rulemaking pace to ensure rules are effective and it has a full appreciation for the cost of implementation.
“We’re going to move very slowly on our rules and if they are finalized in 2013, I can’t guarantee when, but I will tell you we have a lot of homework to do before we will come out with final rules on those,” he said of liquidity, CUSOs and loan participations.
Segerson also said he thinks many CFPB rules won’t be finalized until late 2013, with the exception of the final remittance rule, which he said is a few months out.
In response to a live poll question during the webinar, 65.5% of respondents said regulations mandated by the Dodd-Frank Act would play a significant role in their 2013 planning.
Segerson said credit unions should take a deep breath when contemplating how to meet the new regulatory requirements and not get too upset about them. Yes, there has been a “mad flurry of activity” since Dodd-Frank has been implemented, but the Consumer Financial Protection Bureau is focused on risks to consumers, and credit unions “are on the low end of that scale.”
Regulators actively seek input from the industry, and the NCUA solicited industry feedback more than ever when writing rules this past year, he said.
“It’s made us stronger as an agency and stronger in developing processes,” he said. “Regulators don’t do anything behind closed doors. This stuff is all available publicly, and you have a right to comment on how these rules are shaped.”
The panel also discussed the need for ethics policies that are reviewed at least annually, and along with that, the expectation for increased transparency.
Levine recommended directors and management spend 10 to 15 minutes at their next board meeting discussing ethics and values, which gives the institution a stronger foundation on which to serve members, and prepares it to be more responsive to the NCUA.
In response to a live poll question during the webinar, 77.3% of viewers reported that they conduct an annual review of their ethics policy.
Flannery said when internal fraud occurs or whistleblowers make claims of wrongdoing, even when institutions follow correct policies and procedures, the process can have a long lasting negative impact. Personnel changes, dismissals, litigation and regulatory could create a lingering poisonous atmosphere.
“If an inquiry takes place, a positive message should be conveyed from the top down,” she said. “It’s important to get to the bottom of this, do the right thing. As difficult as that can be, it’s what our culture demands.”
Nearly 59% of respondents to another live poll question said increased transparency is good for credit unions.
“We owe members that confidence,” Levine said.
Segerson said of transparency, there should never been a time when NCUA examiners are “playing a gotcha game.” A strong working relationship and trust between examiners and credit union management helps avoid greater conflict when problems do arise."