WASHINGTON — Federally insured credit unions will no longer have to report certain financial transactions over $10,000, as a result of amendments to the Bank Secrecy Act, which take effect Jan. 5.
Credit unions will not have to file initial Designation of Exempt Person forms or conduct annual reviews for financial institutions and governments.
Credit unions won't have to report certain transactions by members after the member has conducted five or more reportable cash transactions in a year and has maintained a transaction account for at least two months or the credit union has conducted a risk-based analysis.
The Financial Crimes Enforcement Network, which enforces the Bank Secrecy Act, said the analysis should include such factors as whether the credit union has a relationship with the member, pertinent characteristics of the member's business model, the type of business in which the member is engaging, and where the business operates.
Credit unions will have to file an initial DEP form for these members, but will no longer have to file additional forms on this person every two years. The credit union will, however, be required to do an annual review to determine if the member continues to be eligible for exemption.

Trades Praise NCUA on Insurance Coverage Changes; CUNA Asks for More

WASHINGTON — CUNA and NAFCU both like the NCUA's proposed rules giving credit unions some flexibility on displaying signs reflecting the recent changes in the level of insurance coverage.
Congress raised the amount of deposits covered from $100,000 to $250,000 through the end of 2009. NCUA is proposing giving federally insured credit unions three options for displaying signs conveying insurance coverage information: display the existing sign but convey information to members about the coverage changes elsewhere; display a version of the sign showing increased coverage; or physically alter the existing sign with a sticker to reflect the $250,000 coverage level.
CUNA Senior Vice President and Deputy General Counsel Mary Mitchell Dunn said the options "cover all the reasonable alternatives that will provide the necessary information to members without significant burdens for credit unions."
NAFCU Associate Director of Regulatory Affairs Tessema Tefferi praised the agency for recognizing that "requiring a revised sign for the temporary increase would be an expensive and burdensome proposition."
Both Dunn and Tefferi also expressed support for the rules change that will separately insure principal and interest portions of a payment from the mortgagor's individual accounts. Taxes and insurance premiums will continue to be treated as part of the individual accounts and will still be insured in the aggregate. The names of these accounts will be changed from "custodial loan accounts" to "mortgage servicing accounts."
That rules change puts NCUA in line with the FDIC's rules, a change both CUNA and NAFCU contend will make credit unions more competitive.
Dunn also used her letter to reiterate CUNA's support for eliminating the cap on insurance coverage for noninterest bearing transaction accounts. The FDIC has made the change for banks, and she noted that some credit unions feel they are disadvantaged "because they have either lost out on accounts they might otherwise have had, or members have taken deposits to competing institutions."