NCUA’s December Board Meeting Brings Several New Proposed Rules

Late last week, the National Credit Union Administration (NCUA) proposed rules on loan participations and the restructuring of RegFlex, and it issued an Advanced Notice of Proposed Rulemaking (ANPR) on emergency liquidity. All of these proposals have 60-day comment periods.

The proposed loan participation rule will apply to both federally and state chartered credit unions that purchase participations in loans originated by other credit unions. If finalized in its current form, the rule would limit loan participations involving a single originator to 25 percent of the credit union’s net worth (this limit could not be waived) and would set a limit on loans to one borrower of 15 percent of net worth. This limit on loans to one borrower could be waived by the regional director. The rule also includes minimum requirements of loan participation agreements.

The RegFlex proposal would eliminate the program in its current form, instead implementing changes to rules that are applicable to all federal credit unions. Among the proposed changes are: a proposal allowing federal credit unions to acquire unimproved land six years prior to occupation rather than the three years currently required, a proposal to allow federal credit unions to accept non-member deposits up to $3 million (up from the current $1.5 million), a proposal to permit extended maturities for zero-coupon investments for well-capitalized credit unions, and a proposal that would allow federal credit unions to purchase commercial mortgage-related securities in a manner currently allowed under RegFlex.

Finally, the NCUA is seeking feedback on whether it should issue a regulation to require credit unions (state and federally chartered) to have access to backup federal liquidity sources. The ANPR has four proposed options for securing liquidity: joining the Central Liquidity Facility as an individual credit union, joining the Central Liquidity Facility through a corporate credit union, demonstrating access to the Federal Reserve Discount Window and maintaining a certain percentage (not defined in the proposal) of assets in highly liquid treasury securities.


Questions? Comments? Contact Director of Regulatory Advocacy Jaycee Winn: 503.350.2209,

Posted in Federal, NCUA.