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Board Action Bulletin

Stakeholder Comments Invited on All Safety and Soundness Regulations

ALEXANDRIA, Va. (Dec. 17, 2015) – The National Credit Union Administration Board convened its eleventh open meeting of 2015 at the agency’s headquarters here today and unanimously approved two items:

• A final rule to provide enhanced pass-through share insurance coverage for real estate agents’ escrow accounts, prepaid funeral accounts and other escrow accounts similar to lawyers’ trust accounts.
• A notice to stakeholders of the opportunity to comment on regulations covering rules of procedure and safety and soundness for possible modification, simplification or repeal.

Final Rule Provides Enhanced Share Insurance

Coverage for Certain Accounts
The Board approved a final rule (Part 745) amending the agency’s regulations to expand share insurance coverage for certain types of accounts.

Specifically, the Credit Union Share Insurance Fund Parity Act of 2014 requires enhanced, pass-through share insurance coverage for lawyers’ trust accounts and other similar escrow accounts. Before enactment, NCUA’s insurance coverage had been limited only to those clients of the attorney who were also members of the insured credit union where the attorney established the lawyers’ trust account.

Under the new law, only the lawyer or person administering the escrow account must be a member of the federally insured credit union in which such account is maintained for share insurance coverage to flow through to each client or principal, regardless of that person’s membership status.

The final rule will provide greater clarity and regulatory certainty around broad categories of other escrow accounts that automatically would receive pass-through share insurance coverage. These accounts include real estate agents’ escrow accounts and prepaid funeral accounts. Under the final rule, NCUA also may provide share insurance coverage for other similar escrow accounts on a case-by-case basis, where a licensed professional or other individual serving in a fiduciary capacity holds funds for the benefit of a client as part of a transaction or business relationship.

“This rule is very nuanced, because we have to walk a fine line between the membership requirements in the Federal Credit Union Act and the exceptions provided in the Share Insurance Parity Act,” NCUA Board Chairman Debbie Matz said. “This principles-based approach leaves the door open for other similar escrow accounts to be established in the future.”
Matz said some commenters on the proposed rule suggested extending pass-through share insurance coverage to pre-paid cards. But she said using funds from the National Credit Union Share Insurance Fund to pay non-members holding pre-paid cards from a failed credit union is not permissible and not good policy.

The final rule, available online
here (opens new window), becomes effective 30 days after publication in the
Federal Register. NCUA will issue guidance, written in plain English, for examiners and credit unions before the rule becomes effective.

Board Invites Comments on Safety and Soundness, Procedural Regulations
Credit union stakeholders and the general public will have an opportunity to comment on two categories of NCUA regulations after the Board approved a notice and request for comment.

The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and its federal banking agency members to review regulations every 10 years to identify those that might be outdated, ineffective, unnecessary or unduly burdensome.

“NCUA voluntarily participates in this interagency regulatory review process, which complements our own rolling three-year reviews and my Regulatory Modernization Initiative,” Matz said. “We look forward to reading the comments, and we will consider all ideas as we continue to improve NCUA regulations and ease unnecessary burdens on credit unions.”

The two categories of rules covered in this fourth, and final, review will be rules of procedure and safety and soundness. Stakeholders may comment on matters within these categories covered by 16 existing rules, including subparts. The rules covered include involuntary and voluntary liquidations, lending, investment and deposit activities, examinations and appraisals, among others.

Comments under this notice, available
here (opens new window), must be received within 90 days of publication in the
Federal Register.

NCUA tweets all open Board meetings live. Follow

@TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at

www.ncua.gov. NCUA also live streams, archives and posts

videos of open Board meetings online.

ALEXANDRIA, Va. (Dec. 17, 2015) – The National Credit Union Administration is warning consumers about a telephone scam in which consumers are contacted by a caller claiming to work for NCUA and asking for personal and financial information.

The caller tells the consumer her or his credit card or debit card has been frozen or blocked. The caller then asks for the consumer’s Social Security number, account number, date of birth and home address to supposedly verify the information.

Consumers should not provide this or any other information to the caller.

NCUA would not request personal or financial information in this manner. See NCUA’s Privacy Policy for more information.

NCUA offers extensive information to help consumers identify frauds and scams at its Fraud Prevention Center (opens new window).

Consumers who suspect they may have become victims of identity theft should immediately contact their financial institutions and, if necessary, close existing accounts and open new ones. NCUA urges consumers also contact the three major credit bureaus—Equifax (866-349-5191), Experian (888-397-3742) and TransUnion (800-916-8800)—to request a fraud alert be placed on their credit reports.

NCUA supports credit unions and their members with financial literacy and consumer protection resources available without cost at MyCreditUnion.gov (opens new window). NCUA also provides up-to-date financial education information on the agency’s YouTube channel (opens new window), Facebook (opens new window) page and consumer Twitter (opens new window) feed.

Member Deposits Remain Protected up to $250,000 by the Share Insurance Fund

ALEXANDRIA, Va. (Dec. 18, 2015) – The National Credit Union Administration today liquidated Bethex Federal Credit Union of Bronx, New York. 

USAlliance Federal Credit Union of Rye, New York, immediately assumed Bethex Federal Credit Union’s assets, member shares and most loans. USAlliance is a federally chartered credit union with a low-income credit union designation that has 83,102 members and assets of $1.07 billion, according to the credit union’s most recent Call Report.

The new USAlliance members should experience no interruption in services, and the existing Bethex Federal Credit Union office will remain open. Members’ accounts remain insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

Members with questions about their accounts may contact USAlliance Federal Credit Union at 800-431-2754 between 7:30 a.m. and 7 p.m. Monday through Friday and 9 a.m. and 1 p.m. on Saturday.

NCUA placed Bethex Federal Credit Union into conservatorship on Sept. 18, 2015. NCUA made the decision to liquidate Bethex and discontinue its operations after determining the credit union was insolvent with no prospect for restoring viable operations on its own.

At the time of liquidation and subsequent purchase by USAlliance, Bethex served 5,824 members and had assets of $12.2 million, according to the credit union’s most recent Call Report. Chartered in 1970, Bethex Federal Credit Union served various groups in New York City.

Bethex Federal Credit Union is the tenth federally insured credit union liquidation in 2015.

ALEXANDRIA, Va. (Dec. 18, 2015) – AEA Federal Credit Union of Yuma, Arizona, is once again under the control of its members, the National Credit Union Administration announced today.

“Much of the credit for this success goes to the hard work of AEA’s leadership team, credit union staff and the loyal membership,” NCUA Board Chairman Debbie Matz said. “Working collaboratively with the agency, they were able to bring A.E.A. through a conservatorship, stabilize the credit union and continue providing services to members.”

NCUA placed AEA into conservatorship in December 2010. Under NCUA’s guidance, AEA revamped operations, improved lending controls, reduced expenses and continued to meet member’s needs. Net worth at the credit union continues to grow through strong earnings.

AEA is the second credit union to emerge from NCUA conservatorship in 2015.

Chartered in 1942, AEA Federal Credit Union serves 34,326 members and has assets of more than $243 million. AEA operates five branches, and membership is open to individuals and their family members who live, work, worship or attend school in Yuma and La Paz counties in Arizona.

El Fondo de Seguro de Depósitos sigue protegiendo los depósitos de los socios por hasta $250,000

ALEXANDRIA, Va. (18 de diciembre de 2015) – Hoy la Administración Nacional de Cooperativas de Ahorro y Crédito procedió a liquidar Cooperativa de Ahorro y Crédito Federal Bethex de Bronx, Nueva York. 

La Cooperativa Federal de Ahorro y Crédito USAlliance de Rye, Nueva York, inmediatamente se hizo cargo de los activos, los depósitos de los socios y la mayoría de los préstamos de la Cooperativa Federal de Ahorro y Crédito Bethex. USAlliance es una cooperativa de ahorro y crédito autorizada que cuenta con 83,102 socios y activos por $1.07 miles de millones, de acuerdo con el más reciente informe financiero de la cooperativa de ahorro y crédito.

Los socios nuevos de USAlliance no deberían sufrir interrupción en los servicios, y la oficina actual de la Cooperativa de Ahorro y Crédito Federal Bethex permanecerá abierta. Las cuentas de los socios continúan aseguradas por el Fondo Nacional de Seguro de Depósitos de Cooperativas de Ahorro y Crédito. Administrado por la NCUA, el Fondo de Seguro de Depósitos asegura cuentas individuales de hasta $250,000 y el interés de un socio en todas las cuentas conjuntas combinadas por hasta $250,000. El Fondo de Seguro de Depósitos además protege cuentas de jubilación IRA y KEOGH de hasta $250,000. El Fondo de Seguro de Depósitos cuenta con el respaldo de la plena confianza y el crédito del gobierno de los Estados Unidos.

Los socios que tengan preguntas sobre sus cuentas pueden contactarse con la Cooperativa Federal de Ahorro y Crédito USAlliance al 800-431-2754 entre las 7:30 a.m. y las 7 p.m., de lunes a viernes y los sábados entre las 9 a.m. y la 1 p.m.

En 18 de septiembre de 2015, NCUA colocó a la Cooperativa de Ahorro y Crédito Federal Bethex en sindicatura. NCUA tomó la decisión de liquidar Bethex y no permitir que continúe con sus operaciones después de determinar que la cooperativa no era solvente ni capaz de restaurar las operaciones viables por sus propios medios.

Al momento de la liquidación y posterior compra por parte de USAlliance, Bethex asistía a 5,824 socios y contaba con bienes por $12.2 millones, de acuerdo con el informe financiero más reciente de la cooperativa de ahorro y crédito. Con autorización para operar desde 1970, la Cooperativa de Ahorro y Crédito Federal Bethex brindó servicios a varios grupos en la ciudad de Nueva York.

La Cooperativa de Ahorro y Crédito Federal Bethex se constituye en la décima cooperativa de ahorro y crédito con seguro federal en ser liquidada en 2015.

New Economic Video Reviews How Recent Developments May Affect Credit Unions

ALEXANDRIA, Va. (Dec. 23, 2015) – The strengthening economy is good for credit unions, according to National Credit Union Administration Chief Economist Ralph Monaco, but there is still uncertainty about the economic outlook and future path of interest rates.

Monaco discussed economic conditions and the possible impact of rising interest rates in NCUA’s latest Economic Update YouTube video, released today and available online here (opens new window).

“We’ve entered a new interest rate environment, where rising rates, both short- and long-term, are more likely,” Monaco said. “Now is a good time for credit unions to evaluate income and balance sheet changes across a range of potential interest rate scenarios, including one that looks like the Federal Reserve’s projection.”

Credit unions are benefiting from the rise in demand for big-ticket consumer goods, like autos and houses, Monaco said. Auto sales were well above the pre-recession average in the third quarter of 2015. Home sales remain at a relatively high level. Both are an important for credit union lending, accounting for almost 85 percent of the credit union system’s loan portfolio.

 NCUA’s economic update video series is an ideal information resource for credit union board members, loan officers and management and is available on NCUA’s YouTube channel (opens new window).

Member Deposits Protected up to $250,000 by Share Insurance Fund  

ALEXANDRIA, Va. (Dec. 29, 2015) – The National Credit Union Administration today liquidated First Hawaiian Homes Federal Credit Union of Hoolehua, Hawaii.

Molokai Community Federal Credit Union of Kaunakakai, Hawaii, immediately assumed First Hawaiian Homes’ assets, member shares and most loans. Molokai Community is a federally chartered credit union with a low-income credit union designation that has 3,839 members and assets of $20.3 million, according to the credit union’s most recent Call Report.

Members’ accounts remain insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

Members with questions about their accounts may contact Molokai Community Federal Credit Union at 808-553-5328 between 8:30 a.m. and 4:30 p.m. Monday through Thursday and 9 a.m. and 5 p.m. on Friday local time.

NCUA made the decision to liquidate First Hawaiian Homes Federal Credit Union and discontinue operations after determining the credit union was insolvent and had no prospect for restoring viable operations.

At the time of liquidation and subsequent assumption by Molokai Community, First Hawaiian Homes served 1,379 members and had assets of nearly $3.2 million, according to the credit union’s most recent Call Report. Chartered in 1937, First Hawaiian Homes served residents of Island of Molokai, Hawaii.

First Hawaiian Homes Federal Credit Union is the eleventh federally insured credit union liquidation in 2015.

Agency Working to Ensure Access to Needed Financial Services for Members; Share Deposits Remain Protected up to $250,000

ALEXANDRIA, Va. (Jan. 5, 2016) – The National Credit Union Administration, the Missouri Division of Credit Unions and the Mississippi Department of Banking and Consumer Finance will work with federally insured credit unions affected by the recent severe storms and flooding in Missouri and Mississippi to help protect consumers and ensure the continuity of credit union services.

Federally insured credit unions in the affected areas are currently operating normally. Credit union members in these areas should contact their credit unions or check their credit union’s website for the latest information.

Member deposits at federally insured credit unions remain protected by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

During natural disasters, NCUA works with state regulators and state league organizations to ensure all federally insured credit unions are aware of and can utilize NCUA’s available assistance. Under the agency’s disaster relief policy NCUA will, when necessary:

• Encourage credit unions to make prudent loans with special terms and reduced documentation to affected members;
• Reschedule routine examinations of affected credit unions, if necessary;
• Guarantee lines of credit for credit unions through the Share Insurance Fund; and
• Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.

Low-income designated credit unions affected by flooding can apply for up to $7,500 in Urgent Needs grant assistance to repair damage or restore services to members. Information about Urgent Needs Grants is available here (opens new window).

Credit unions in need of NCUA assistance should contact their primary supervisory examiner.

ALEXANDRIA, Va. (Jan. 12, 2016) – The video recording of the December 2015 open meeting of the National Credit Union Administration Board is now available on the agency’s website.

Archived videos of past Board meetings may be viewed here, and each video remains on the site for one year.

The December open Board meeting’s agenda consisted of two items:

• A final rule to provide enhanced pass-through share insurance coverage for real estate agents’ escrow accounts, prepaid funeral accounts and other escrow accounts similar to lawyers’ trust accounts; and
• A notice to stakeholders of the opportunity to comment on regulations covering rules of procedure and safety and soundness for possible modification, simplification or repeal.

NCUA posts these videos as part of the agency’s ongoing efforts to provide transparency and to allow those unable to attend Board meetings the opportunity to become better informed. An interval between the meeting and posting is necessary for the videos to comply with Section 508 of the Rehabilitation Act for the hearing and visually impaired.

The Board Actions page of NCUA’s website has more information, including Board agendas, which are posted at least one week in advance of each open meeting, copies of Board Action Bulletins, which summarize the meetings, copies of Board memorandums and other documents.

ALEXANDRIA, Va. (Jan. 11, 2016) –  National Credit Union Administration Board Member J. Mark McWatters said today he intends to remain fully engaged on matters coming before the NCUA Board during the confirmation process for his nomination to serve on the Board of Directors of the Export-Import Bank of the United States.

“It is an honor to be nominated by President Obama to serve on the Board of Directors of the Export–Import Bank,” said Board Member McWatters. “If confirmed by the U.S. Senate, I look forward to working with Chairman Hochberg and Vice Chair Felton. Until that time, I will continue to work on the critical regulatory issues and policies facing the credit union system as a member of the NCUA Board.”

President Barack Obama announced his intent to nominate McWatters to the Board of the Export–Import Bank earlier today. 

McWatters was nominated by President Obama to serve on the NCUA Board on Jan. 7, 2014. Following confirmation by the U.S. Senate on June 19, 2014, he took office as an NCUA Board Member on Aug. 26, 2014.

Board Member McWatters previously served as the Assistant Dean for Graduate Programs and as a Professor of Practice at the Southern Methodist University Dedman School of Law and as an Adjunct Professor at the Southern Methodist University Cox School of Business. He previously served as a member of the Troubled Asset Relief Program Congressional Oversight Panel. He also served on the Governing Board of the Texas Department of Housing and Community Affairs and the Advisory Committee of the Texas Emerging Technology Fund.

Board Member McWatters has more than 30 years of legal experience as a tax, corporate finance and mergers and acquisitions attorney. He is also licensed as a Certified Public Accountant.