Compliance Center

The National Credit Union Administration (NCUA) is having a busy June.  There are a number of updates that credit unions should take note of.  These include the results of last week’s Board meeting to additional resources and webinars that the NCUA is making available to credit unions.

Results from Last Week’s Board Meeting

Proposed Rule on Asset Securitization

The NCUA issued a proposed rule to clarify that natural person credit unions are authorized to securitize loans that they originated.  The new rule allows “qualified” federal credit unions to securitize their loans if they meet certain criteria.

A credit union would be required to create a separate, special-purpose entity to hold the assets. It would also need to have independent risk-management controls and an annual independent audit performed.

Additionally, the credit union’s board members would need to have an adequate understanding of the securitization process, and senior management would need to have sufficient expertise to oversee these transactions. The credit union must also have in place a board-approved securitization policy.

The proposed rule also would apply to federally insured, state-chartered credit unions that are permitted by state law to securitize their assets.

Safe Harbor for Securitizations

 As a companion rule to the Asset Securitization rule, the NCUA has issued proposed rulemaking to provide a safe harbor for assets transferred by a credit union in connection with a securitization or a participation.

Proposed Appraisal Rule Changes

The Board also approved a proposed rule that would encourage more federally insured credit unions to modify or refinance mortgages in markets where home prices have declined. The rule would allow a federally insured credit union to refinance or modify a real estate-related loan it holds without obtaining an appraisal if there is no advancement of new funds, or with an advancement if there is adequate collateral protection.

Voluntary Liquidation Rule

Solvent federal credit unions that decide to liquidate voluntarily will have fewer administrative hurdles, and members will have better protection, under the Board-approved final rule.

The revised rule:

  • Increases asset-size thresholds for certain procedural requirements in a voluntary liquidation;
  • Gives credit unions greater flexibility to use electronic means to publish creditor notices and issue member share payouts; and
  • Provides that preliminary distributions to members are permitted up to the insured limit applicable to each member’s account.

Other NCUA Updates

Interest Rate Risk Resource Page

The NCUA launched a new web resource for credit unions to use to better understand and prepare for changes in interest rates and the risk those changes present.

The new page includes videos, charts showing trends that affect interest rate risk, links to NCUA regulations and letters to credit unions, interagency guidance, and best practice resources. NCUA’s newest video about interest rate risk and the questions for credit unions to answer is also posted on the resource page.

NCUA Webinar on Mobile Apps

Mobile applications are one of the fastest growing segments in the financial services industry today. Webinar participants will learn how consumers are using mobile technology and mobile applications to meet their financial needs. In addition, participants will hear from credit unions that have successfully developed and implemented their own mobile strategies.

Dominic Carullo, Economic Development Specialist with NCUA’s Office of Small Credit Union Initiatives, will host a panel of experts in the field of mobile technology and applications, including: 

  • Rob Gaynor, Founder and Chief Product Officer, Malauzai;
  • Todd Riggleman, Chief Executive Officer, Algar Federal Credit Union;
  • Tansley Sterns, Chief Impact Officer, The Filene Institute;
  • Laurie Bryan, Consultant, Fiserv; and
  • Lisa Minor, Payment Systems Specialist, NCUA’s Office of National Examinations and Supervision.

Online registration for this free webinar is now open here. Participants will also use this link to log into the webinar. Registrants should allow pop-ups from this website.

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA has released a new Interest Rate Risk Resource Page and Video to help credit unions better understand changes in interest rate risk.

The NCUA published its Board Action Bulletin detailing the events of the June Board Meeting. The bulletin includes information on the proposed asset securitization rule, proposed appraisal rule, and voluntary liquidation rule.

The NCUA announced that it will host its second Anti-Money Laundering webinar on June 25th.

The June Edition of the NCUA Report is now available.

The NCUA announced that it will be holding a webinar on mobile applications and the risks associated with them on Wednesday, July 9.

Consumer Financial Protection Bureau (CFPB)

The CFPB released a guide on protecting long-term care facility residents from financial exploitation.

Federal Reserve Board (FRB)

The FRB released a notice to ensure that HMDA reporting is accurate for 2014 HMDA reports in light of the new mortgage changes.

The FRB updated its Consumer Compliance Handbook.

U.S. Department of Housing and Urban Development (HUD)

HUD released a statement detailed the Federal Housing Administration’s (FHA) guidance on deceptive marketing and advertising practices in reverse mortgage programs. 

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of June 20, 2014. The last update prior to this was June 19, 2014.

Compliance Question of the Week

Does a court-appointed guardian have access to a person’s safe deposit box?

In Washington, after the credit union is satisfied with the guardian’s identity and authority as a guardian (e.g., Letter of Guardianship), statute allows the guardian access to the safe deposit box. Remember that a guardian is appointed to safeguard the assets of another person who has been deemed by the courts to be incapacitated. In order to accomplish these duties, the guardian is allowed access to an already opened safe deposit box, as well as opening a box when necessary.

In Oregon, the power would be granted to a conservator or a guardian if a conservator has not been appointed.

Related Links:

RCW 11.92.096

ORS 125.420

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, NCUA.