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Joint Release:

• Board of Governors of the Federal Reserve System
• Federal Deposit Insurance Corporation
• National Credit Union Administration
• Office of the Comptroller of the Currency

For Immediate Release: October 17, 2017

WASHINGTON — Responding to widespread damage caused by Hurricanes Harvey, Irma, and Maria, four federal financial institution regulatory agencies today took action to facilitate the recovery process by temporarily easing appraisal requirements for real estate-related financial transactions in areas declared to be a major disaster.

The agencies will not require financial institutions to obtain appraisals for affected transactions (1) if the properties involved are located in areas declared major disasters; (2) if there are binding commitments to fund the transactions within 36 months of the date the areas were declared major disasters, and (3) if the value of the real properties support the institutions’ decisions to enter into the transactions.

The exceptions apply to transactions in areas of Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands and expire three years after the date the president declared each area a major disaster. The exceptions are being made under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and its implementing regulations.

Financial institutions that use the appraisal exception must maintain information estimating the collateral’s value that sufficiently supports their credit decision to enter into the transaction. The agencies will monitor institutions’ real estate lending practices to ensure the transactions are being originated in a safe and sound banking manner.

 

Attachment:
Temporary Exceptions to FIRREA Appraisal Requirements in Areas Affected by Severe Storms and Flooding Related to Hurricanes Harvey, Irma, and Maria (opens new window)

Comments on the Proposed Budget Due by Oct. 27

ALEXANDRIA, Va. (Oct. 18, 2017) – The National Credit Union Administration’s proposed 2018-2019 budget process continued today with a public briefing, and Board members encouraged credit union stakeholders to provide the agency with comments.

During the briefing today, NCUA Board Chairman J. Mark McWatters said the proposed budget reflects the Board’s efforts to “discharge our responsibilities with transparency, thoughtfulness, and deliberateness.”

“Board Member Metsger and I have worked diligently to balance the NCUA’s mission of ensuring safety and soundness of the credit union system and the Share Insurance Fund,” McWatters said. “The 2018-2019 budget proposal exemplifies this same ethos: forward-looking strategies that enable the agency to meet future challenges and take advantage of opportunities. It is another step in the NCUA’s broader effort to realign its resources to meet the needs of an evolving credit union system in a cost-effective manner. I hope credit union stakeholders will study the proposed budget carefully and provide us with thoughtful, but specific suggestions on where we can make improvements.”

“We are re-tooling our business model to reflect changes in the industry while making sure agency staff have the resources they need to fulfill their responsibilities,” Board Member Rick Metsger said. “This process does come with some near-term costs but will also yield long-term benefits as NCUA works smarter and more efficiently.”

A detailed budget proposal and budget presentation, totaling approximately 150 pages, from today’s briefing are available on the agency’s
Budget and Supplementary Materials webpage. The page also includes extensive agency budget documents—including frequently asked questions, office-by-office budget breakdowns, and budget justifications—from previous years.

Credit union stakeholders presented comments during the briefing, and written comments can be submitted to the agency until Friday, Oct. 27, at 5 p.m. Eastern. Those should be submitted by email to
[email protected] and should provide specific, actionable recommendations rather than general remarks about the size or structure of the budget.

A video of today’s briefing will be available on the agency’s website in the near future.

In the last year, the NCUA has taken significant steps to become more efficient. The agency in July announced
its restructuring plan that includes closing 40 percent of its regional offices, eliminating overlapping office functions, and re-tooling its business model.

In November 2016, the Board adopted a 2017 budget incorporating recommendations from the
Exam Flexibility Initiative (opens new window) that included cost-saving measures such as an extended examination cycle and a smaller agency footprint in credit unions.

NCUA Offers Online Resources for Credit Unions and Members

ALEXANDRIA, Va. (Oct. 19, 2017) – International Credit Union Day, being celebrated today, is a good opportunity to promote financial literacy, and the National Credit Union Administration offers online resources to help credit unions and members reach that goal.

The NCUA’s MyCreditUnion.gov (opens new window) and Pocket Cents (opens new window) websites provide up-to-date information to consumers about saving, borrowing, managing credit and protecting themselves from frauds and scams. These resources are available in English and Spanish.

The NCUA also offers two fun and engaging interactive financial education tools, “Hit the Road” and “World of Cents” on the Pocket Cents (opens new window) site.

The NCUA’s consumer Twitter feed, @MyCUgov (opens new window), provides personal finance tips covering a wide range of topics.

International Credit Union Day (opens new window) has been celebrated annually since 1948. The day recognizes the credit union system’s history and achievements with the goal of raising awareness about the work credit unions are doing around the world to provide affordable financial services through a not-for-profit cooperative business model.

Under the Federal Credit Union Act, promoting financial literacy is a core credit union mission. While credit unions serve the needs of their members and promote financial literacy within the communities they serve, the NCUA works to reinforce credit union efforts, raise consumer awareness and increase access to credit union services. The NCUA also participates in national financial literacy initiatives, including the Financial Literacy and Education Commission, an interagency group created by Congress to improve the nation’s financial literacy and education.

Board Action Bulletin

Share Insurance Fund Posts Quarterly Loss Due to Increased Loss Provisions

ALEXANDRIA, Va. (Oct. 19, 2017) – The National Credit Union Administration Board held its eighth open meeting of 2017 at the agency’s headquarters here today and unanimously approved four items:

• A final rule enhancing due process and providing consistency with other federal financial institutions regulators in the supervisory appeals process.
• A final rule providing uniform, comprehensive procedures to govern the agency’s regulatory appeals process.
• A proposed rule to reduce regulatory burdens by removing some of the capital planning and stress testing requirements currently applicable to federally insured credit unions with assets of $10 billion or greater.
• A request for information to be published in the Federal Register on standardizing the loan, deposit, and investment information collected electronically during examinations.

The Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund, which posted a net loss for the third quarter due to increased provisions for insurance losses.

Appeals Process for Agency Decisions Improved

The process of appealing agency decisions to the NCUA Board will be more efficient, consistent, and transparent under a final rule (new Part 746, Subpart B) approved by the Board.

Several current NCUA regulations include an embedded appeals process, but the new rule will replace those provisions with a uniform, comprehensive set of procedures that will apply in cases in which a decision by a regional director or other program office director is appealed to the Board.

The new rule will affect appeals of decisions in areas including chartering and field of membership, investment authority, conversions and mergers, creditor claims in liquidations, and share insurance determinations. Certain areas, such as formal enforcement actions, prompt corrective action, and material supervisory determinations, would not be covered under the new rule.

The new rule, available online here (opens new window), will become effective Jan. 1, 2018.

Agency Enhances Due Process in Supervisory Review Committee Appeals

The Board approved a final rule (new Part 746, Subpart A) that will create better due process in appeals of material, examination-related supervisory determinations.

Changes in the appeals process include:

• Expansion of the number of material supervisory determinations that can be appealed to the agency’s Supervisory Review Committee;
• Creation of an optional intermediate level of review before an appeal goes to the Committee; and
• Changes in the nature and composition of the Committee.

Under the new rule, an appeal at any level would not affect, delay, or impede any formal or informal supervisory or enforcement action in progress. Likewise, it would not affect NCUA’s authority to take any supervisory or enforcement action against a federally insured credit union.

The new rule, available online here (opens new window), will become effective Jan. 1, 2018.

Proposed Changes to Capital Planning, Stress Testing Would Tailor Requirements

The NCUA’s capital planning and stress testing requirements would become more tailored to the size, complexity, and financial condition of covered credit unions and provide a measure of regulatory relief under a proposed rule (Part 702) approved by the Board.

The NCUA Board approved a final rule requiring capital planning and stress testing for federally insured credit unions with assets of $10 billion or greater in April 2014. That rule anticipated the possibility of covered credit unions being allowed to conduct stress tests, once the NCUA had completed three stress tests. The rule proposed today would authorize federally insured credit unions with assets of $10 billion or greater to conduct their own stress tests in accordance with the NCUA’s requirements and allow those credit unions to incorporate the stress test results into their capital plan submissions to the agency.

The proposed rule would break covered credit unions into three tiers, with tailored requirements:

• Tier 1—Credit unions with assets greater than $10 billion in their first three capital planning cycles. Stress testing would not be required.
• Tier 2—Credit unions with three or more capital planning cycles, but with less than $20 billion in assets. These credit unions would run stress tests under the NCUA’s scenarios and guidance, but they would not be subject to the 5 percent minimum stress-test ratio.
• Tier 3—Credit unions with $20 billion or more in total assets. These credit unions would run stress tests under the NCUA’s scenarios and guidance and be subject to the 5 percent minimum stress-test ratio.

NCUA has reserved the right to conduct stress tests on covered credit unions if it deems such action necessary.

Comments on the proposed rule, available online here (opens new window), must be received within 60 days of publication in the Federal Register.

Agency Seeks Stakeholder Comments on Proposed New Data Collection Format

The NCUA is seeking comments from credit union stakeholders on its plans to modernize formats for loan, deposit and investment data collected electronically during examinations after the Board’s approval of a Federal Register notice.

The proposed modernization is part of the agency’s Enterprise Solution Modernization Program and is expected to provide benefits to the agency and to credit unions, including a more consistent examination process, more efficient use of examiner time, reduced burdens on credit unions—including less time examiners spend onsite—improved data reliability and quality, and enhanced data analysis.

Responses to the request for information, available online here (opens new window), must be received within 60 days of publication in the Federal Register.

Share Insurance Fund Posts Net Loss Due to Insurance Loss Provisions

The Share Insurance Fund in the third quarter of 2017 posted a net loss of $74.6 million, primarily due to the increase of $76.9 million in the provision for insurance losses.

The fund’s assets increased to $13.7 billion at the end of the quarter due to the billing of $476.1 million for capital deposits from credit unions with assets greater than $50 million. Third-quarter investment and other income was $50.8 million. Operating expenses were $51.1 million.

As of September 2017, the calculated equity ratio is 1.25 percent. The equity ratio is calculated on an insured share base of $1.1 trillion and includes the recently billed capital deposits.

For the third quarter of 2017, the Chief Financial Officer reported:

• The number of CAMEL codes 4 and 5 credit unions decreased 2.9 percent from the second quarter of 2017 to 204 from 210.
• Assets in CAMEL codes 4 and 5 credit unions decreased 3.8 percent from the second quarter of 2017 to $10.2 billion from $10.6 billion.
• The number of CAMEL code 3 credit unions declined 0.2 percent from the second quarter of 2017 to 1,086 from 1,088.
• Assets in CAMEL code 3 credit unions declined 2.8 percent from the second quarter of 2017 to $55.1 billion from $53.6 billion.

There were two credit union failures during the third quarter of 2017, compared to one credit union failure in the third quarter of 2016. Year-to-date, four federally insured credit unions failed through September 2017, compared to 12 failures as of September 2016. Total year-to-date losses associated with credit union failures are $3.9 million, compared to $8.5 million through September 2016. Fraud was not a contributing factor for either failure during the quarter.

The third-quarter figures are preliminary and unaudited.

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.

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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”

Annual Diversity Self-Assessment Survey Now Under Way

ALEXANDRIA, Va. (Oct. 24, 2017) – Credit unions can learn about the many benefits of promoting diversity in their workforces and their membership on an upcoming webinar hosted by the National Credit Union Administration.

The webinar, “What, Why and How: Credit Union Diversity,” is scheduled for Thursday, Nov. 2, beginning at 2 p.m. Eastern. Online registration is available here (opens new window). Participants can use this same link to log into the webinar. Registrants should allow pop-ups from this website. There is no charge.

The webinar will feature credit union board members and staff leaders from Municipal Credit Union (opens new window), Brooklyn, New York; Self Help Credit Union (opens new window), Durham, North Carolina; and North Side Community Federal Credit Union (opens new window), Chicago, Illinois.

Registered users can submit questions in advance at [email protected]. The email’s subject line should read, “CU Diversity.” Participants with technical questions about accessing the webinar may email [email protected]. This webinar will be closed captioned and then archived online here approximately three weeks following the live event.

The webinar also will discuss how to use the NCUA’s Voluntary Credit Union Diversity Self-Assessment tool. This 28-question checklist is designed to support credit unions’ diversity efforts. All credit unions, but especially those with at least 100 employees, are encouraged to complete the checklist and submit it electronically to the NCUA’s Office of Minority and Women Inclusion by Dec. 30.

Submitting self-assessment results helps the NCUA analyze credit union diversity as required by Section 342 of the Dodd-Frank Act. The data received will be used to identify trends and create a baseline for evaluating diversity in the credit union system. Aggregated, anonymous data also will be used for the NCUA’s annual report to Congress. Credit unions are not required to complete the assessment, and it has no bearing on their CAMEL ratings.

ALEXANDRIA, Va. (Oct. 26, 2017) – The video recording of the Sept. 28, 2017, 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.

At the September open meeting, the Board unanimously approved three items:

• A plan to close the Temporary Corporate Credit Union Stabilization Fund on Oct. 1, 2017, nearly four years ahead of schedule, and set the Share Insurance Fund’s normal operating level at 1.39 percent.
• The agency’s proposed 2018–2022 Strategic Plan, issued with a 60-day public comment period.
• A notice of proposed rulemaking to revise the agency’s advertising rule to give credit unions greater flexibility and a measure of regulatory relief.

The Chief Financial Officer briefed the Board on the performance of the Temporary Corporate Credit Union Stabilization Fund as of June 30.

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.

Member Deposits Remain Protected by the Share Insurance Fund

ALEXANDRIA, Va. (Oct. 27, 2017) – The National Credit Union Administration today liquidated New York State Employees Federal Credit Union of New York, New York. 

Palisades Federal Credit Union of Pearl River, New York, immediately assumed most of New York State Employees Federal Credit Union’s assets and all members, shares and loans. Palisades Federal Credit Union is a federally chartered credit union that serves 13,832 members and has assets of nearly $200 million, according to the credit union’s most recent Call Report.

The new Palisades Federal Credit Union members should experience no interruption in services, and the existing New York State Employees Federal Credit Union office will remain open until the transition of services is complete.

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.

Members with questions about their accounts may contact Palisades Federal Credit Union at 800-438-7415 between 9 a.m. and 5 p.m. Eastern on Monday, Tuesday, Thursday, and Friday; from 10 a.m. to 5 p.m. on Wednesday; and from 9 a.m. to 1 p.m. on Saturday.

The NCUA made the decision to liquidate New York State Employees Federal Credit Union 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 Palisades Federal Credit Union, New York State Employees Federal Credit Union served 1,183 members and had assets of $2 million, according to the credit union’s most recent Call Report. Chartered in 1935, New York State Employees Federal Credit Union served various groups in New York.

New York State Employees Federal Credit Union is the fourth federally insured credit union liquidation in 2017.

Federally Insured Credit Unions Serve More Than 14 Million Service Members and Veterans

ALEXANDRIA, Va. (Nov. 9, 2017) –National Credit Union Administration Board Chairman J. Mark McWatters and Board Member Rick Metsger today issued statements on the eve of Veterans Day.

“Veterans’ Day is a day of recognition, reflection, and inspiration,” McWatters said. “We honor the men and women who have served in our country’s armed forces and their courage, skill, and devotion to our nation and its ideals. We acknowledge the sacrifices they and their families made, and we draw inspiration from their example. More than 14 million American service members, veterans, and their families belong to credit unions, and the credit union community will continue to support those who serve and meet their financial needs. In that same spirit, I will continue to be their advocate.”

“Our nation has a continuing obligation to veterans and to active-duty personnel, and credit unions plays their part by providing affordable financial services,” Metsger said. “When NCUA updated its field-of-membership rule last year, we added a provision to include within a credit union’s common bond honorably discharged veterans of any branch of the United States Armed Forces listed in its charter, which allowed them to continue their eligibility for  membership beyond active duty. It’s another way we can support service members and their families.”

The NCUA offers information tailored for members of the military and their families on its Pocket Cents (opens new window) consumer information website.

Veterans currently make up 17 percent of the NCUA’s employees and 12 percent of its senior staff. The agency has been recognized for its efforts to recruit veterans to its workforce. NCUA ranked second among mid-sized federal agencies in the 2016 Partnership for Public Service report (opens new window) as a “best place to work” for veterans.

The NCUA’s offices will be closed Nov. 10 in observance of the Veterans Day holiday.

ALEXANDRIA, Va. (Nov. 9, 2017) – The video recording of the Oct. 19, 2017, 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.

At the October open meeting, the Board unanimously approved four items:

• A final rule enhancing due process and providing consistency with other federal financial institutions regulators in the supervisory appeals process.
• A final rule providing uniform, comprehensive procedures to govern the agency’s regulatory appeals process.
• A proposed rule to reduce regulatory burdens by removing some of the capital planning and stress testing requirements currently applicable to federally insured credit unions with assets of $10 billion or greater.
• A request for information to be published in the
  Federal Register on standardizing the loan, deposit, and investment information collected electronically during examinations.

The Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund, which posted a net loss for the third quarter due to increased provisions for insurance losses.

The 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 the 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.