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Board Action Bulletin

ALEXANDRIA, Va. (March 14, 2019) – The National Credit Union Administration Board held its third open meeting of 2019 at the agency’s headquarters today and unanimously approved one item:

• A final rule making regulations regarding loans and lines of credit to members clearer and easier to follow.

The Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund.

Share Insurance Fund Continues Positive Trends

The Share Insurance Fund (opens new window) reported a net income of $226.5 million and a net position of $15.7 billion for 2018.

The fund’s assets declined to $15.8 billion at the end of the year from $16.7 billion at the end of 2017.

As of Dec. 31, 2018, the Share Insurance Fund’s calculated equity ratio was 1.39 percent. The equity ratio is calculated on an insured share base of $1.1 trillion. As the equity ratio was higher than the normal operating level of 1.38 percent, the Board, by notation vote March 6, approved a $160.1 million Share Insurance Fund distribution to eligible federally insured credit unions.

For the fourth quarter of 2018:

• The number of CAMEL codes 4 and 5 credit unions decreased to 193 from 203 in the third quarter of 2018. Assets for these credit unions increased 2.6 percent from the third quarter of 2018, to $11.8 billion from $11.5 billion.
• The number of CAMEL code 3 credit unions decreased to 940 from 1,001 in the third quarter of 2018. Assets for these credit unions decreased 5.7 percent from the third quarter of 2018, to $52.7 billion from $55.9 billion.

There were eight involuntary liquidations and assisted mergers during 2018, compared to 10 credit union failures in 2017. The total amount of losses associated with failures in 2018 was $792.5 million, compared to $24.4 million the previous year.

The Chief Financial Officer reported the agency’s four funds—the Share Insurance Fund, the Operating Fund, the Central Liquidity Facility and Community Development Revolving Loan funds—each received an unmodified, or “clean,” audit opinion with no reportable conditions for 2018 from the agency’s independent auditor, KPMG LLP.

Final Lending Rule Gives Clarity and Eases Compliance

Credit unions will find compliance with NCUA regulations covering loans and lines of credit to members easier following the Board’s approval of a final rule (opens new window) amending those regulations.

The final rule, part of the agency’s ongoing regulatory reform agenda, makes the regulation easier to follow in three ways:

• Putting all maturity limits applicable to federal credit union loans in one section;
• Clarifying that the maturity for a new loan under GAAP is calculated from the new date of origination; and
• Clearly describing the limits for loans to a single borrower or group of associated borrowers.

The final rule will become effective 30 days after publication in the Federal Register.

The 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. The NCUA also live streams, archives and posts videos of open Board meetings online.

ALEXANDRIA, Va. (March 14, 2019) – Federally insured credit unions generally saw continued positive trends in the fourth quarter of 2018, according to the latest NCUA Quarterly U.S. Map Review.

The review tracks performance indicators for federally insured credit unions in all 50 states and the District of Columbia and includes information on two important state-level economic indicators: the unemployment rate and home prices.

Nationally, overall membership growth continued and the strongest growth continued to be concentrated in larger credit unions. Eighty-eight percent of federally insured credit unions reported positive net income during 2018. Median annual loan growth in the year ending in the fourth quarter was 5.9 percent, and median annual asset growth was 1.7 percent.

ALEXANDRIA, Va. (March 15, 2019) – The video recording of the Feb. 14, 2019, open meeting of the National Credit Union Administration Board is now available on the agency’s website.

The NCUA posts archived videos of past Board meetings on its Board Meetings, Agendas, and Results webpage, and each video remains on the page for one year.

At the February open meeting, the Board unanimously approved one item:

• A proposed rule to clarify and provide additional flexibility in the agency’s regulation covering required credit union supervisory committee audits.

The Office of the General Counsel briefed the Board on a final interagency rule covering loans in special flood hazard areas.

The NCUA posts board meeting 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 Meetings, Agendas, and Results page also has 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. (March 25, 2019) – Registration is now open (opens new window) for an “Ask the Regulators” webinar on coming changes to the Current Expected Credit Losses accounting standard.

The April 11 webinar, scheduled to begin at 2 p.m. Eastern, will cover the significant differences financial institutions should expect in their accounting procedures following the CECL changes, scheduled for 2022. Participants will use the registration link to log into the webinar.

The webinar will focus on how CECL changes will affect smaller institutions and will include a detailed discussion of the weighted average remaining maturity method for estimating the allowance for credit losses. There will be a question-and-answer session, and participants also may submit questions in advance at [email protected].

The webinar, hosted by the Federal Reserve Bank of St. Louis, will be presented by staff from the NCUA, the Financial Accounting Standards Board, the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and the Conference of State Bank Supervisors.

The NCUA will post updated frequently asked questions about the anticipated CECL changes in the near future.

The webinar will be archived (opens new window) approximately three weeks following the live event. The archive will require a separate registration.

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the state regulators, collectively the agencies, recognize the serious impact of flooding in the Midwest on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision.  The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities.

A complete list of the affected disaster areas can be found at https://www.fema.gov/disasters (opens new window).

Lending: Financial institutions should work constructively with borrowers in communities affected by flooding in the Midwest.  Prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism.  Modifications of existing loans should be evaluated individually to determine whether they represent troubled debt restructurings.  This evaluation should be based on the facts and circumstances of each borrower and loan, which requires judgment, as not all modifications will result in a troubled debt restructurings. In supervising institutions affected by flooding in the Midwest, the agencies will consider the unusual circumstances these institutions face.  The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest.

Temporary Facilities: The agencies understand that many financial institutions face staffing, power, telecommunications, and other challenges in re-opening facilities after the flooding in the Midwest.  In cases in which operational challenges persist, the primary federal and/or state regulator will expedite, as appropriate, any request to operate temporary facilities to provide more convenient availability of services to those affected by flooding in the Midwest.  In most cases, a telephone notice to the primary federal and/or state regulator will suffice initially to start the approval process, with necessary written notification being submitted shortly thereafter.

Publishing Requirements: The agencies understand that the damage caused by flooding in the Midwest may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities under various laws and regulations.  Institutions experiencing disaster-related difficulties in complying with any publishing or other requirements should contact their primary federal and/or state regulator.

Regulatory Reporting Requirements: Institutions affected by flooding in the Midwest that expect to encounter difficulty meeting the agencies’ reporting requirements should contact their primary federal and/or state regulator to discuss their situation.  The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the agencies’ regulatory reporting requirements if those institutions are unable to fully satisfy those requirements because of the effects of flooding in the Midwest.  The agencies’ staffs stand ready to work with affected institutions that may be experiencing problems fulfilling their reporting responsibilities, taking into account each institution’s particular circumstances, including the status of its reporting and recordkeeping systems and the condition of its underlying financial records.

Community Reinvestment Act (CRA): Financial institutions may receive CRA consideration for community development loans, investments, or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas.  For additional information, institutions should review the Interagency Questions and Answers Regarding Community Reinvestment at https://www.ffiec.gov/cra/qnadoc.htm (opens new window).

Investments: The agencies realize local government projects may be negatively affected by flooding in the Midwest.  Institutions should monitor municipal securities and loans affected by flooding in the Midwest.  Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.

For more information, refer to the Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster, which is available as follows:

CSBS:  https://www.csbs.org/interagency-supervisory-examiner-guidance-institutions-affected-major-disaster (opens new window)
FDIC:  https://www.fdic.gov/news/news/financial/2017/fil17062.html (opens new window)
FRB:  https://www.federalreserve.gov/supervisionreg/srletters/sr1714a1.pdf (opens new window)
OCC:  https://www.occ.gov/news-issuances/bulletins/2017/bulletin-2017-61.html (opens new window)
NCUA:  https://www.ncua.gov/Resources/Documents/SL-17-02-examiner-guidance-institutions-affected-major-disaster-enclosure.pdf (opens new window)

Media Contacts

Agency	Contact	Phone
CSBS	James Kurtzke	202.728.5733
Federal Reserve	Darren Gersh	202.452.2955
FDIC	Julianne Fisher Breitbeil	202.898.6895
NCUA	John Fairbanks	703.518.6330
OCC	Stephanie Collins	202.649.6870

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NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At MyCreditUnion.gov (opens new window), NCUA also educates the public on consumer protection and financial literacy issues.

“Protecting credit unions and the consumers who own them through effective regulation”

Member Services Continue; Deposits Remain Protected by Share Insurance Fund

ALEXANDRIA, Va. (March 29, 2019) – Members of C B S Employees Federal Credit Union are now members of University Credit Union following today’s liquidation by the National Credit Union Administration.

The new University Credit Union members should experience no interruption in services. Members’ accounts remain insured by the National Credit Union Share Insurance Fund. Administered by the 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.

The NCUA liquidated C B S Employees, located in Studio City, California, and discontinued its operations after determining the credit union was insolvent with no prospect of restoring viable operations on its own. University Credit Union, located in Los Angeles, immediately assumed C B S Employees’ assets, loans, and all member shares.

University Credit Union is a federally insured, state-chartered credit union that, prior to its assumption of C B S Employees, served 37,057 members and had assets of $654,577,105, according to the credit union’s most recent Call Report. Members with questions can call University Credit Union at 800-828-4510 between 7 a.m. and 5 p.m. Pacific Monday through Friday and between 9 a.m. and 3 p.m. on Saturday. Members with questions about Share Insurance coverage can find information on the Share Insurance section (opens new window) of NCUA’s consumer website, MyCreditUnion.com (opens new window).

At the time of liquidation and subsequent purchase and assumption by University Credit Union, C B S Employees served 2,798 members and had assets of $21,037,558, according to the credit union’s most recent Call Report. Chartered in 1961, C B S Employees Federal Credit Union provided financial services to employees of CBS, Inc., Mary Tyler Moore Productions, and CBS/MTM who work in Studio City, California.

Consumer Financial Protection Bureau (CFPB) Director Kathleen L. Kraninger today becomes the Chairman of the Federal Financial Institutions Examination Council (FFIEC). Her two-year term runs from April 1, 2019, through March 31, 2021. Chairman Kraninger succeeds Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation. The FFIEC named National Credit Union Administration Board Chairman J. Mark McWatters as its new Vice Chairman for the same two-year term.

“The FFIEC provides a platform for members of the Council to promote collaboration and consistency in the supervision of financial institutions,” said Director Kraninger. “I look forward to engaging with my colleagues and remain committed to finding effective ways to collaborate on supervisory matters, including the use of appropriate technology. Under my leadership, I plan to focus on building a culture of compliance that prevents consumer harm in the first place,” she said. “This prevention of harm is one of my primary goals, and using all available tools will better protect consumers, taxpayers, and the financial system.”

Director Kraninger is the second confirmed Director of the CFPB. The U.S. Senate confirmed her as Director on December 6, 2018, for a five-year term. Prior to her confirmation, Director Kraninger served as the Policy Associate Director at the Office of Management and Budget, where she oversaw the budgets for executive branch agencies including the Departments of Commerce, Justice, Homeland Security, Housing and Urban Development, Transportation, and Treasury, as well as 30 other government agencies.

Director Kraninger graduated magna cum laude from Marquette University and earned a law degree from Georgetown University. She served as a U.S. Peace Corps Volunteer in Ukraine.

Media Contacts

Agency	Contact	Phone
Federal Reserve	Susan Stawick	202.452.2955
CFPB	Marisol Garibay	202.435.7170
FDIC	Greg Hernandez	202.898.6984
NCUA	Ben Hardaway	703.518.6330
OCC	Stephanie Collins	202.649.6870
SLC	Jim Kurtzke	202.728.5733

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NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At MyCreditUnion.gov (opens new window), NCUA also educates the public on consumer protection and financial literacy issues.

“Protecting credit unions and the consumers who own them through effective regulation”

ALEXANDRIA, Va. (April 2, 2019) – Online registration (opens new window) is open for an April 24 webinar discussing programs and initiatives the National Credit Union Administration’s Office of Credit Union Resources and Expansion has planned for 2019.

The webinar, “What’s Happening in CURE for 2019,” is scheduled to begin at 2 p.m. Eastern and run approximately 60 minutes. Participants will be able to log into the webinar and view it on mobile devices using the registration link, and they should allow pop-ups from this website.

Martha Ninichuk and JeanMarie Komyathy, Director and Deputy Director of the Office of Credit Union Resources and Expansion, will discuss topics including:

• Programs and initiatives for Minority Depository Institutions;
• The credit union chartering process;
• The upcoming grant round for low-income credit unions;
• CURE’s training programs schedule; and
• New upgrades for the agency’s Learning Management Service (opens new window).

The NCUA will offer live Twitter updates during the webinar on @TheNCUA. Participants can submit questions over Twitter anytime during the presentation and in advance at [email protected]. The email’s subject line should read, “What’s Happening in CURE.” Technical questions should be emailed to [email protected].

This webinar will be closed captioned and archived online approximately three weeks following the live event.

NCUA’s Office of Credit Union Resources and Expansion supports low-income-designated credit unions and credit unions interested in a low-income designation; minority credit unions; credit unions seeking changes in their charters, bylaws, or fields of membership; and groups organizing to start new credit unions.