ALEXANDRIA, Va. — Less than a week after the Financial Services Regulatory Relief Act was signed into law, NCUA jumped on the chance to put related regulations in place for credit unions.
At the NCUA Board's Oct. 19 meeting, the regulatory body approved an interim final rule extending federal credit unions' general loan maturity limit from 12 to 15 years and allowing federal credit unions to provide check cashing and wire transfers to nonmembers within their field of membership. Residential real estate and mobile home loan limits remain separate.
NCUA's interim final rule stated, "The NCUA Board is issuing this rulemaking as an interim final rule because there is a strong public interest in having advantageous and consumer-oriented rules that enhance credit union services for members and consumers." The interim final rule is effective upon publication in the Federal Register and also has a 60-day comment period.
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The agency noted that the prompt corrective action rule references the 12-year maturity limit in the alternative risk-based net worth calculation and staff will re-evaluate this calculation.
Regarding services to nonmembers, the interim rule reminded, "FCUs should be mindful that they will have to meet some of the same compliance obligations with these transactions as they currently have for similar member transactions. FCUs should ensure compliance with the Bank Secrecy Act, the Customer Identification Program regulation, NCUA security rules, and other anti-money laundering requirements when servicing persons who may not provide information that would be provided if they applied for membership. Additionally, pursuant to the Financial Right to Privacy Act and NCUA privacy rules, FCUs must safeguard the private financial information of and provide the required privacy notices to nonmembers who purchase or receive financial services."
NCUA's final rule on suspicious activity reports came through in the more conventional manner of proposal and final rule. The rule is intended to "describe in greater detail the requirements for reporting and filing a Suspicious Activity Report (SAR) and to address prompt notification of the board of directors of SAR filings, the confidentiality of reports, and liability protection." The final, effective 30 days after publication in the Federal Register, is little changed from the proposed regulation.
About one-third of the 24 commenters said that the board notification requirement was unnecessary for various reasons. Still NCUA maintained it in the final rule because "notifying a credit union's board, or its designated committee, of the credit union's SAR activity is important to ensure a board receives sufficient information to properly discharge its responsibilities. For example, awareness of suspicious activity can identify vulnerabilities and strengths in a credit union's operations and inform its board with respect to decisions regarding funding priorities and requirements for systems and training." The majority of commenters on this section wanted NCUA to define the term "prompt" in reporting SAR activity to the credit union board. The agency said that reporting should be done at least monthly unless "the seriousness of an activity merits immediate reporting."
Finally, the NCUA Board was presented with the NCUSIF quarterly report. At this point, the fund's equity ratio has reached 1.30% and should end the year there. Above 1.30%, the agency is authorized to provide federally insured credit unions a rebate. The NCUSIF's net income is over budget while operating expenses and insurance losses are under.
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