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ALEXANDRIA, Va.-The three major credit union trade associations have asked NCUA to review a number of its rules and regulations as part of the agency’s responsibilities under the Economic Growth and Regulatory Paperwork Reduction Act. As part of its review under EGRPRA, which must be completed every 10 years, NCUA and other regulators must classify regulations and publish them for comment to help eliminate or reduce regulatory burden. NCUA is currently looking at safety and soundness and anti-money laundering issues, as well as other areas. In individual comment letters, CUNA and NAFCU asked that NCUA review its guidelines for safeguarding member information in light of recent, highly publicized data security breaches; work to extend loan maturities; provide additional Suspicious Activity Report guidance; give further guidance on records preservation; and enhance credit unions investment authorities. CUNA Senior Vice President and Associate General Counsel Mary Mitchell Dunn wrote in the organization’s May 6 comment letter, that CUNA supports congressional efforts to prevent the data security breaches that have caught a lot of media attention of late. Additionally, CUNA asked that certain member business lending requirements-such as appraisal requirements, aggregate construction and development loan limits, minimum borrower equity requirements for certain loans, loan to value requirements; and others-be included in credit union board policy rather than NCUA’s regulations. Under the Bank Secrecy Act, Dunn recommended that the current $10,000 threshold for currency transaction reports is too low in current dollars and giving credit unions 30 days to file a CTR would alleviate some of the burden. “Raising the level to $20,000 or higher, we feel, will be appropriate,” she wrote. This could lessen the burden of Suspicious Activity Report filing as well. Dunn also suggested that the Reg-Flex exemption for personal guarantees on member business loans be expanded to all adequately capitalized credit unions. Other items subject to waiver should be considered for automatic waiver for Reg-Flex credit unions. CUNA also suggested NCUA: * review the $250,000 appraisal threshold; * provide additional guidance for surviving credit unions in mergers to determine which of the merged credit union’s records should be retained permanently or periodically destroyed; and * consider whether all adequately capitalized credit unions should be eligible for investment flexibility. One of the items NAFCU’s comment letter placed emphasis on was increasing the 12-year maturity limit to 25 years. “Meeting credit union member needs and the imperative to remain competitive are also driving forces for longer loan maturities for large consumer and member business loans,” NAFCU President and CEO Fred Becker wrote. “NAFCU believes the Board should consider increasing the maturity limit for these types of loans to 25 years. Longer maturities enable members to afford credit and to grow safely.” NAFCU also raised concerns with the agency’s overdraft guidance, which recommends that overdraft balances should be reported as loans, but NAFCU believes these balances should be treated as “receivables.” Additionally, the guidance recommends that when consumers attempt to use means other than checks to withdraw funds from an overdraft program, the financial institution, when feasible, should provide a notice of the potential fees, which NAFCU argued was impractical. “NAFCU believes that, in the vast majority of situations, it would not be feasible to give this type of notice on non-check transactions. An ACH debit or a foreign ATM transaction, for example, requires immediate processing, and no mechanism exists to notify the member of the fee in advance of the completed transaction,” Becker wrote. In addition, Becker recommended that NCUA: * permit federal credit unions and corporates to invest in principal-only, stripped mortgage-backed securities with greater than 20 points if they demonstrate they understand the associated risks; * review and revise its guidance on member-data security to allow flexibility on a case-by-case basis whether accounts accessed without authorization warrant further observation; and * define what constitutes a “vital record” under the NCUA’s rule on records preservation and retention.

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