NCUA Board Finalizes Shared Services Rule

During Thursday's NCUA Board meeting, members unanimously approved a final rule for service facilities to include shared branches, shared ATMs or shared electronic facilities for multiple common-bond federal credit unions.

In the months following the introduction of the proposed rule, during the Dec. 2020 Board meeting, a majority of credit union leaders voiced opposition to expand the definition of a service facility to include ATMs and mobile banking platforms in underserved areas, according to NCUA Senior Staff Attorney, Elizabeth Wirick. The Board modified the final rule after reviewing those submitted comments.

Wirick said the final rule "continues to mandate that a service facility in an underserved area must offer all three services that the Board requires: accepting shares for deposits, taking loan applications, and disbursing loan proceeds."

ATMs do not meet those requirements, but virtual teller machines could.

NCUA Board Chairman Todd Harper said, "While I opposed the proposed rule issued last December, I will join my fellow Board members in support of this final rule because we have corrected the deficiencies contained in the original plan and because the rulemaking has the potential to expand access to safe, fair, and affordable financial services to individuals, including those who live in underserved communities."

NAFCU's Vice President of Regulatory Affairs, Ann Kossachev said this final rule ignores the help needed by the underserved and unbanked. "NAFCU is disappointed in the NCUA's decision to exclude ATMs under the definition of a service facility in its rule. This final rule falls short in helping credit unions, especially smaller institutions, to provide products and services to their communities, including disadvantaged populations that are often left behind by big banks.

"We also believe that it is critical for online and mobile banking platforms to be recognized as service facilities as technologies continue to evolve and consumer needs and demands change. A legislative change may be necessary to achieve this, and we look forward to working with Congress to help credit unions better serve their communities and stay competitive," said Kossachev.

The final rule will go into effect 30 days after publication in the Federal Register.

Share Insurance Fund Quarterly Update

Board members received an update on the health of the Share Insurance Fund as of the end of the 2021 third quarter. According to the NCUA's financial office, the SIF had $20.9 billion in total assets at the end of September and had a reported total income of $59.8 million.

"While the Share Insurance Fund is showing solid performance and the equity ratio is projected to rise to 1.28% at the end of the year, the NCUA must continue to monitor credit union performance and economic developments," said Harper. "Additionally, the stresses on the equity ratio from continued share growth, the low interest-rate environment, at least historically, and insurance losses remain. The agency will need to continue to analyze the Fund's risk exposure."

2022-2026 Strategic Plan

NCUA Board members voted 3-0 to approve its five-year strategic plan for comment of the agency's goals and objectives.

According to the plan, the NCUA has three strategic goals:

Ensure a safe, sound, and viable system of cooperative credit that protects consumers.
Improve the financial well-being of individuals and communities through access to affordable and equitable financial products and services.
Maximize organizational performance to enable mission success.

Harper commented, "For any organization, strategic planning is an essential process for outlining where the organization is going, how it will get there, and what investments are needed to achieve organizational goals.

"We must continue efforts to expand access to safe, fair, and affordable financial services, provide financial education, and close the racial wealth gap. We must also address demographic and economic trends. And, we must continue to address the economic fallout of the COVID-19 pandemic, which will likely have lasting effects for some time to come. The proposed strategic plan considers each of these matters and the potential risks they pose to our programs and the broader credit union system," he said.

Comments on the draft Strategic Plan are due 60 days after publication in the Federal Register.

NOT FOR REPRINT

Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.