NCUA Releases Updates to Federal Credit Union Lending Rules


The NCUA Board approved final rule changes to the lending rules for federal credit unions. The changes are part of the NCUA’s regulatory reform agenda and are designed to make compliance with 12 CFR 701.21 easier. The changes do not require federal credit unions to change their processes or procedures. 

The amendments make the NCUA’s regulations more user friendly by: (1) identifying in one section all of the various maturity limits applicable to federal credit union loans; (2) stating that the maturity date for a new loan under generally accepted account principles is calculated from the origination date of the new loan; and (3), more clearly expressing the limits for loans to a single borrower or group of associated borrowers. 

Question of the Week 

Q: How do we assist a potential member who doesn’t have a Social Security number and is not eligible for one? 

A:  A potential member without a Social Security number may apply for an Individual Taxpayer Identification number (ITIN) and the credit union may use this number to open an account. ITINs are issued by the IRS typically to non-residents or others  who do not have and are not eligible to get a social security number but must file a tax return. ITINs are for tax purposes only and are used on forms, statements and other tax documents. The ITIN is used just like a Social Security number. It begins with the number “9” and is formatted like a Social Security number: 9NN-NN-NNNN. 

By obtaining an ITIN, a non-resident  does not change his or her employment or immigration status. 

An individual applies for an ITIN by completing Form W-7, Application for IRS Individual Taxpayer Identification Number. In addition to completing Form W-7, the non-resident  must provide documentation substantiating foreign/alien status and his or her true identity, such as a passport. It takes about six to eight weeks to receive the ITIN. 

A non-resident  may or may not obtain a Taxpayer Identification Number (TIN). A TIN is not required on the W-8BEN; however, the non-resident may want to get one anyway. If the foreign individual does not have a TIN, or is a non-resident, a Form W-8BEN can be completed to exempt the individual from back-up withholding. 

If an individual does not have an ITIN, the W-8BEN expires every three years. This means that the credit union will have to get a new W-8BEN after its expiration. If the credit union does not get a new W-8BEN, then the credit union will have to start back-up withholding. 

Related Links: 
IRS Form W-7 

Legal Briefs 

National Credit Union Administration (NCUA) 

NCUA announced a partnership with the U.S. Small Business Administration to launch a three-year collaborative effort to bring small businesses and credit unions together and expand awareness about SBA programs. 

Consumer Financial Protection Bureau (CFBP) 

CFPB issued proposed amendments to raise the coverage thresholds for collecting and reporting closed-end mortgages and open-end lines of credit. 

CFPB announced the release of a redesigned HMDA research and data page. 

Office of Foreign Assets Control (OFAC) 

OFAC published “A Framework for OFAC Compliance Commitments” to provide guidance on the essential components of an effective sanctions compliance program. 

Internal Revenue Service (IRS) 

IRS promotes disaster readiness and hurricane Preparedness Week. 

Office of Foreign Assets Control (OFAC) 

OFAC has updated the SDN list as of April 26, 2019. The last update prior to this was April 17, 2019. 

Questions? Contact the Compliance Hotline: 1.800.546.4465;

Posted in Compliance News.