CUNA Regulatory Advocacy Report

21 Days Until RBC2 Comment Deadline

With just 22 days left until NCUA’s comment deadline for RBC2, the agency has already received and posted 350 comment letters to their website. As we’ve previously mentioned in the Regulatory Advocacy Report, while there have been several key changes made to this version of the Risk Based Capital proposal, we still believe it is important for credit unions to comment, and encourage all members that previously commented to do so again.For the most up-to-date resources on this proposal, and to see our guide on how to  write an effective RBC2 comment letter, please visit our Risk-Based Capital Action Center, and RBC Blog. CUNA members can also contact us directly with any questions or comments by emailing RBC@cuna.coop.

CUNA Seeks Input on Financial Accounting Foundation’s Private Company Council

The Financial Accounting Foundation (FAF) is conducting a three-year review of the Private Company Council (PCC), which was established in May 2012 to improve the process of setting accounting standards for private companies, including credit unions. The PCC has two principal responsibilities:

  1. The PCC determines, using the Private Company Decision-Making Framework, whether alternatives to existing GAAP are necessary to address the needs of users of private company financial statements. (Following a FASB endorsement process, alternatives for private companies developed by the PCC are incorporated into GAAP.)
  2. The PCC serves as the primary advisory body to the FASB on the appropriate treatment for private companies for items under active consideration on the FASB’s technical agenda.

The objectives of the FAF’s review are to:

  • Determine whether the PCC is meeting its primary responsibilities and mission
  • Provide an assessment of the PCC’s continuing role and effectiveness
  • Address changes that might be made to improve the PCC’s effectiveness

Please review CUNA’s Comment Call and send us your feedback by April 28.

Matz’s NCUA Board Term Expires This Friday

NCUA Board Chairman Debbie Matz’s board term expires this Friday, but all indications show that she will serve until a replacement has been chosen. President Obama appointed Matz to the NCUA board for a six-year term on in 2009. At her option, she can continue to serve until a replacement is sworn in. NCUA board members are nominated by the president and must be confirmed by the Senate. The president has not yet submitted a nominee to replace Chairman Matz.

NCUA Provides Grants to Low-Income Credit Unions

Last week, NCUA announced that the agency was providing grants to a number of low-income credit unions (LICU). According to NCUA, “a total of 153 low-income credit unions will receive $520,440 through the first Community Development Revolving Loan Fund grant round in 2015.” These grants were awarded for staff and volunteer training and student internships.
 
NCUA is encouraging any LICU’s interested in applying for the second grant round of 2015 to participate in the agency’s April 15 webinar to learn about the initiatives that will be offered. NCUA also encourages credit unions to explore a LICU designation. In addition to grants, LICU credit unions can:

  • Accept non-member deposits
  • Accept supplemental capital secondary capital accounts
  • Qualify for exceptions from the aggregate loan limit for member business loans

NCUA’s website provides detailed information on grants and how to become a LICU.

Supreme Court to Decide on Second Liens in Bankruptcy

 

The U.S. Supreme Court heard arguments last week in a case involving the stripping of a second lien when a borrower declares bankruptcy. CUNA has been monitoring this, and other similar cases, over the past few years, since credit unions often make second mortgage loans.
 
At the heart of the case, Bank of America v. Caulkett, are two Florida homeowners who had second mortgages voided during Chapter 7 bankruptcy proceedings.
 
In its opening statement, Bank of America cited a 1992 Supreme Court case that does not allow a lien to be voided based on the current value of the collateral, arguing that outside of bankruptcy, a financial institution would be entitles to have its lien stay with the property until it is paid in full.
 
CUNA hopes the court will continue to hold the security interests of a second lien, failing to do so could disincentivize credit unions from offering second liens.
 
The court is expected to release its ruling before the end of June.

 

Current CUNA Regulatory Calls to Action

  • NCUA Issues New Risk-Based Capital Proposal (RBC2) (comments due by April 27)
  • NCUA Issues New Fixed Assets Proposal (comments due by April 29)
  • NCUA Proposes to Revise Definition of “Small Entity” (comments due by May 4)
  • FAF Seeks Comments on Effectiveness of Private Company Council (comments due by May 11)
  • Financial Regulators (excluding NCUA) Issue EGRPRA Review (comments due by May 14)
  • CFPB Seeks Input on Credit Card Market (comments due by May 18)

To write directly to regulators click here.

For other items of interest, visit CUNA’s Regulatory Advocacy page.

Posted in Article Post.