Legal Briefs

National Credit Union Administration (NCUA)
The NCUA issued a final rule regarding net worth and equity ratio definitions. The definition of equity ratio will be calculated using the financial statements of the National Credit Union Share Insurance Fund (NCUSIF) alone, without any consolidation or combination with the financial statements of any other fund or entity. The definition of net worth will eliminate any double counting in the net worth in a combination resulting in a bargain purchase gain. These changes will be effective on or near Oct. 26, 2011.

The NCUA issued Letter to Credit Unions 11-CU-15. This letter to credit unions goes over the changes to U.S. savings bond sales and the steps that credit unions should take. 

Office of Foreign Assets Control (OFAC)
The OFAC SDN list was updated again. Last update: Sept. 28, 2011.

Oregon Department of Motor Vehicles (DMV)
The Oregon DMV announced plans to start issuing DMV alphanumeric customer numbers. Credit unions that use the identification numbers will want to ensure that their systems are able to handle the change from strictly numeric to alphanumeric combinations. The change will occur once the DMV runs out of the current numeric combinations. Projections have this occurring at the beginning of 2014. 

Financial Crimes Enforcement Network (FinCEN)
FinCEN has released a request for comment on mandating e-filing to take effect on June 30, 2012. Under the proposal, reports that are required by the Bank Secrecy Act (currency transaction reports (CTRs) and suspicious activity reports (SARs) will need to be filed electronically starting in July 2012. Comments will be due within 60 days of the proposed rule being published in the Federal Register (approximately Nov. 15, 2011). 

FinCEN has reported its Second Quarter 2011 analysis of mortgage loan fraud (MLF) SARs. The report shows a large increase in SARs filed when compared to the same time period in 2010. A large majority of the SARs examined involve mortgages closed during the height of the real estate bubble.

Misrepresenting income, occupancy, or debts and assets, followed by debt elimination scams and scams involving the fraudulent use of social security numbers, topped the types of suspicious activity reported by filers of MLF SARs.

Financial Accounting Standards Board (FASB)
The FASB issued an accounting standards update to simplify testing goodwill for impairment. Update 2011-08 provides amendments that will allow both public and nonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.

Washington Division of Credit Unions (DCU)
The Washington DCU released the Fourth Quarter 2011 quarterly asset assessment worksheet.

National Automated Clearing House Association (NACHA)
NACHA has released a request for comment regarding expedited processing and settlement. The amendment would preserve the existing Automated Clearing House (ACH) time frames, but would add a new expedited processing and settlement window as an ACH network-wide capability. Originating Depository Financial Institutions (ODFIs) would then be able to use this capability in offering products and services to ACH network users. Comments are due by Nov. 18, 2011.

The annual Medicare enrollment period for beneficiaries to make health or drug coverage changes starts on Oct. 15 and ends on Dec. 7. This is one month earlier than usual. Medicare instituted the new time frame to ensure there is enough time to process any changes so that coverage begins without interruption on Jan. 1.

Federal Trade Commission (FTC)
The FTC published a Children’s Online Privacy Protection Act (COPPA) proposed rule change. The rule change
is in response to changes in online technology and proposes to modify certain rule definitions as well as the requirements for notice and parental consent. Comments are due on Nov. 28, 2011.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Advocacy News, Around the NW, Compliance News.