WASHINGTON — The American Bankers Association and CUNA want the NCUA to make changes to its proposed signage rule while NAFCU likes it the way it is.
The NCUA is proposing to change the signage requirement details for shared-branching networks that include nonfederally insured credit unions. One sign, the official NCUA sign, would be unchanged. Additionally, the agency wants the second sign, instead of listing all members of the shared network, to state that the credit union accepts deposits for members of other credit unions, not all of which are federally insured.
The ABA suggested that the second sign should be required to list only credit unions that aren't insured by the NCUSIF.
“ABA does not disagree with NCUA's assessment that the requirement to list each participating federally insured credit union would be problematic. But ABA believes that the appropriate change should be to require the second sign to list those credit unions that are not federally insured,” ABA Senior Economist Keith Leggett wrote the agency.
CUNA supported giving credit unions more leeway by requiring only one sign that states that not all credit unions served by the teller are federally insured or giving tellers the option to provide a separate written disclosure to nonmembers who use the credit union.
“Either of these alternatives should serve the goal of sufficiently informing members of their insurance coverage, especially considering that very few consumers are members of nonfederally insured credit unions,” CUNA Senior Assistant General Counsel Jeffrey Bloch wrote to the NCUA.
Bloch also said that federally insured credit unions that provide services to members of other credit unions should have the option to indicate-either on the sign or in the separate disclosure form-that they are federally insured.
NAFCU Associate Director of Regulatory Affairs Tessema Tefferi wrote the NCUA that his association “strongly supports the proposed rule,” because it would decrease the regulatory burden on federal credit unions that have shared branch arrangements with nonfederally insured credit unions.
He also praised the provision of the proposed rule prohibiting nonfederally insured credit unions from displaying the official NCUA sign. He added that this would prevent such a credit union from misleading consumers into believing their deposits are federally insured.
The NCUA Board issued the proposed regulations in October.
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