Markets Wired

Executive Director Mark Treichel to Retire After a Long and Distinguished Career

ALEXANDRIA, Va. (Jan 23, 2020) – National Credit Union Administration Chairman Rodney E. Hood announced today that the NCUA Board unanimously approved several changes to the agency’s leadership:

Larry Fazio Named NCUA’s New Executive Director

Examination and Insurance Director Larry Fazio will serve as the agency’s new Executive Director, the highest senior career position at the NCUA. Fazio will assume these duties on March 1.

“Larry’s knowledge and expertise are of tremendous value to the NCUA and for credit unions,” Chairman Hood said. “He was instrumental in helping the agency successfully navigate the failure of the corporate credit unions during the Financial Crisis a decade ago. He also has led efforts to not only modernize NCUA’s policies to ensure the continued safety and soundness of credit unions, but also enhance the agency’s examination program. I look forward to Larry serving in this role.”

Fazio succeeds Mark Treichel, who is retiring after more than 33 years of distinguished service at the NCUA, including the last seven as Executive Director. His retirement will become effective June 30 to allow for a smooth transition in leadership. 

“Mark’s professionalism, leadership and judgment have long benefited this agency,” Hood said. “On behalf of the entire NCUA Board, I sincerely thank Mark for his exceptional and long-standing service and life’s work to the nation’s system of cooperative credit. I know all NCUA employees will miss his guidance, and I wish him well as he enters a new and exciting chapter of his life.”

Fazio joined the NCUA in 1991 as an examiner in Chicago. During his career, he has served as a supervision analyst, a supervisory examiner in Detroit, the director of supervision in the former-Chicago regional office, and the director of risk management, the Deputy Director and Director of the Office of Examination and Insurance, and the NCUA’s Deputy Executive Director.

Fazio graduated from Lewis University with a degree in accounting, and he has a master’s degree in organizational management from The George Washington University in Washington D.C.

Rendell Jones Named Deputy Executive Director and Chief Operating Officer

Chief Financial Officer Rendell Jones has been named Deputy Executive Director and will assume these duties on Feb. 2.

Jones came to the NCUA from U.S. Citizenship and Immigration Services, where he was Associate Director for Management and served as the agency’s Acting Deputy Director from December 2013 to July 2014. Prior to that appointment, he served as USCIS’s Chief Financial Officer. He previously served as Deputy Budget Director at the Department of Homeland Security. His career in federal service began in 1996 at the Department of Justice.

Jones holds a master’s degree in public administration from North Carolina State University and a bachelor of science degree in finance from Virginia Commonwealth University. He received the Presidential Rank Medal for Meritorious Service and the Secretary’s Silver Medal for his service at the Department of Homeland Security.

John Kutchey Named Director of the Eastern Region

John Kutchey has been named Regional Director for the Eastern Region after eight years as Deputy Executive Director. He will assume his new duties on Feb. 2.

Prior to his appointment as Deputy Executive Director, Kutchey served as the agency’s Deputy Director of the Office of Examination and Insurance. Within the NCUA, he has also held positions as director of risk management and then-Region II’s director of supervision. He also served as a supervisory examiner, a problem case officer and a principal examiner. Prior to joining the NCUA, he worked for various credit unions.

Kutchey has a bachelor’s degree in business administration from the University of Baltimore.

Towanda Brooks Named Chief Human Capital Officer

Towanda Brooks, Director of the Office of Human Resources, has been named Chief Human Capital Officer for the agency. She will assume her expanded duties on Feb. 2.

Prior to coming to the NCUA in 2018, Brooks served as Chief Human Capital Officer for the Department of Housing and Urban Development. Her career includes 30 years’ service in human resources at the Department of Commerce, the National Nuclear Security Administration, the Department of Homeland Security, the U.S. Secret Service, the Department of Agriculture, and the Library of Congress.

She holds a bachelor’s degree from George Mason University in Fairfax, Virginia, and a master’s degree from The American University in Washington, D.C. She also received a professional certificate in executive leadership from Georgetown University. She received the 2017 Presidential Meritorious Rank Award.

Frank Kressman Continues to Serve as Acting General Counsel

Frank Kressman will continue to serve as Acting General Counsel while the NCUA continues its search for a permanent General Counsel.

Before today’s action, he served as Acting General Council on as part of a short-term detail. Before his selection, Kressman served as a Deputy General Counsel to the NCUA. He joined the agency in 1998 as a staff attorney. His previous experience includes work as an attorney at the Federal Deposit Insurance Corporation and the Commodity Futures Trading Commission.

Kressman holds a bachelor’s degree from Dickinson College in Carlisle, Pennsylvania, a Juris Doctor from the Gonzaga University School of Law in Spokane, Washington, and a Master of Laws degree from The American University Washington School of Law in Washington, D.C.

Linda Dent Will Continue to Serve as Acting Deputy General Counsel

Linda Dent will continue to serve as Acting Deputy General Counsel. Before today’s action, she served in this capacity as part of a short-term detail.

Dent previously served as the Associate General Counsel for Information and Access Law, where she established a new office focused on federal information laws and practices. During her NCUA career, she has also served as the Associate General Counsel for Administrative Law and the Acting Director of the Office of Minority and Women Inclusion.

Dent joined the NCUA in 2006 after a lengthy career directing and implementing compliance, financial analysis, and organizational efficiency initiatives for commercial and non-profit financial industry entities. She holds degrees from the Pennsylvania State University in State College, Pennsylvania, and the George Mason University Antonin Scalia Law School in Arlington, Virginia.

Board Action Bulletin

2020 Annual Performance Plan, CMP Adjustments, Interest Rate Ceiling Approved

ALEXANDRIA, Va. (Jan. 23. 2020) – The National Credit Union Administration Board held its first open meeting of 2020 at the agency’s headquarters today and unanimously approved four items:

• A proposed rule to permit low-income-designated credit unions, complex credit unions, and newly chartered federal credit unions to issue subordinated debt.
• A proposed rule that provides greater clarity on the regulations governing transactions where a federally insured credit union proposes to assume liabilities from or merge with another institution that is not a credit union.
• The 2020 Annual Performance Plan, which outlines the strategies and initiatives the NCUA will use to achieve the performance measures and outcomes described in the 2018–2022 Strategic Plan.
• An extension of the current 18-percent interest ceiling on most federal credit union loans until September 2021.

The Office of the General Counsel briefed the Board on inflation adjustments required by federal law to the agency’s civil monetary penalties.

Proposed Rule Would Update Authority to Issue Subordinated Debt

The NCUA Board approved a proposed rule (opens new window) that would update its regulations to allow eligible credit unions to issue subordinated debt for regulatory capital standards.

“Federal credit unions borrowing in the form of subordinated debt is squarely within the statutory authority provided under law,” NCUA Board Chairman Rodney E. Hood said. “I support giving complex credit unions the authority to use subordinated debt prudently as an additional tool to comply with risk-based capital requirements and newly chartered credit unions the ability to use this tool to get up and running.”

The proposed rule would better organize certain NCUA regulations, improve clarity and transparency, and incorporate enhanced investor protections. The rule would amend parts of the NCUA’s regulations to update the authority low-income-designated credit unions have to issue subordinated debt. The rule also would authorize complex credit unions subject to the agency’s risk-based capital requirements and new credit unions to use subordinated debt under certain circumstances.

In particular, the proposed rule would:

• Add a new section to NCUA’s regulations addressing limits on loans to other credit unions;
• Clarify application requirements to issue subordinated debt;
• Expand requirements for note disclosures and offering documents;
• Update the borrowing rule to clarify that federal credit unions can borrow from any source; and
• Add new safe harbors for repudiation and interest payments.

Any secondary capital issued before the effective date of a final rule would be grandfathered under the new rule.

Comments on the proposed rule must be received no later than 120 days after publication in the Federal Register.

Proposed Combination Transactions Rule Clarifies Requirements

Federally insured credit unions interested in merging with or assuming liabilities of financial institutions that are not credit unions would benefit from greater clarity about that process under a Board-approved proposed rule (opens new window).

“The number of credit union acquisitions of bank assets and certain liabilities is small relative to any standard,” Chairman Hood said. “As we continue to see the evolution in the marketplace, one of my priorities as Chairman is to be forward-thinking. Credit unions as well as banks have asked for clarity on this process. I am glad the Board is considering this rule to add even more transparency to the process, and I welcome the public’s comments.

“Additionally, credit union acquisitions of banks may be particularly beneficial for underserved and rural areas, which have seen a severe contraction in access to financial services over the last decade as financial institutions shut down branches,” Hood said.

The proposed rule adds a new Subpart D to Part 708(a) of the NCUA’s regulations that:

• Simplifies the basic requirements that apply to combination transactions between a federally insured credit union and another type of financial institution;
• Ensures that the directors of a federally insured credit union proposing such a transaction understand the nature and ramifications of the proposed transaction; and
• Makes regulatory provisions applicable to all asset purchases and lists other NCUA regulations that apply to each particular transaction.

All such transactions require the NCUA’s approval, and state-chartered, federally insured credit unions also must obtain approval from their state regulator.

Comments on the proposed rule must be received no later than 60 days following publication in the Federal Register.

Annual Performance Plan Sets 2020 Agency Priority Goals

The Board approved the NCUA’s 2020 Annual Performance Plan (opens new window), which provides specific direction and guidance to implement the overarching goals listed in the 2018–2022 Strategic Plan (opens new window).

The performance plan describes how the agency will reach its strategic goals and its monitor progress in 2020. The plan identifies four agency priority goals:

• Fully and efficiently execute the requirements of the agency’s examination and supervision program;
• Effectively identify and evaluate risk in complex credit union portfolios;
• Promulgate efficient, targeted regulation tailored to offer meaningful relief without undermining safety and soundness; and
• Implement secure, reliable, and innovative technology solutions.

The NCUA developed the 2020 performance plan simultaneously with the 2020–2021 budget (opens new window). The performance plan, in combination with the 2020–2021 budget, executes the agency’s strategic plan.

Board Extends Loan Interest Rate Ceiling to September 2021

After reviewing recent trends in money-market rates and financial conditions among federal credit unions (opens new window), the Board extended the current interest rate ceiling of 18 percent on most federal credit union loans through Sept. 10, 2021.

The Federal Credit Union Act caps the interest rate on federal credit union loans at 15 percent; however, the NCUA Board has discretion to raise that limit for 18-month periods if interest-rate levels could threaten the safety and soundness of credit unions. The 18-percent cap applies to all federal credit union lending except originations made under NCUA’s payday alternative loan program, which are capped at 28 percent currently.

An NCUA staff analysis concluded that money market rates have risen over the preceding six-month period and that lowering the rate ceiling below the current 18-percent maximum would threaten the safety and soundness of individual credit unions, due to anticipated adverse effects on liquidity, capital, earnings, and growth. The Federal Credit Union Act requires both those conditions exist for the Board to allow the interest rate ceiling to be higher than 15 percent.

The analysis also found that a reduction in the loan rate cap would likely result in a reduction in payday alternative lending, a reduction in federal credit union earnings and some members turning to payday lenders to meet short-term borrowing needs.

The Board will continue to monitor market rates and credit union financial conditions to determine whether a change should be made to the maximum loan rate. The Board may take action sooner than 18 months, if circumstances warrant.

Final Rule Confirms Required Inflation Adjustments to Civil Monetary Penalties

The Office of General Counsel briefed the Board on the required inflation adjustments for the maximum amounts for civil monetary penalties (opens new window) under its jurisdiction, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

The act requires agencies to adjust the maximum amounts of civil monetary penalties annually to account for inflation. The NCUA Board previously approved these adjustments by notation vote on Jan. 7, 2020. The final rule will become effective upon 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. (Jan. 21, 2020) – National Credit Union Administration Executive Director Mark Treichel today announced the selection of Julie Cayse as associate regional director of operations for the agency’s Western Region.

Cayse began her NCUA career in 2010 as an examiner after several years working in financial services in the private sector. She has served as a supervision analyst, supervisory examiner, director of supervision, and, most recently, as director of risk management in the agency’s Office of Examination and Insurance. She assumed her duties in the Western Region’s Tempe, Arizona, office on Jan. 5.

Cayse holds a bachelor’s degree in economics and management from the University of Kentucky and a master’s degree in business administration from Xavier University in Cincinnati, Ohio. She is a graduate of the Executive Leadership Program at The Graduate School in Washington, D.C. and participates in the NCUA’s Executive Training Program.

ALEXANDRIA, Va. (Jan. 10, 2020) – In the wake of the recent earthquakes in Puerto Rico, the National Credit Union Administration will be ready to assist the seven federally insured credit unions there with maintaining or restoring operations, if necessary.

“We are closely monitoring the aftermath of the recent earthquakes affecting Puerto Rico,” NCUA Chairman Rodney E. Hood said. “The NCUA stands ready to assist credit unions with their operational needs, if necessary. Credit unions and members can find more information and resources on the NCUA’s website.”

The NCUA’s Office of Credit Union Resources and Expansion can provide urgent needs grants (opens new window) up to $7,500 to low-income credit unions that experience sudden costs to restore operations interrupted by the storm.

Members’ deposits remain protected 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 insurance coverage can find information online at the Share Insurance Coverage (opens new window) page of the NCUA’s MyCreditUnion.gov (opens new window) website.

To the extent possible, credit union members are encouraged to contact their institutions for updates on operating status and member services. Members also may contact the NCUA’s Consumer Assistance Center at 800-755-1030 Monday through Friday between 8 a.m. and 5 p.m. Eastern.

ALEXANDRIA, Va. (Jan. 7, 2020) – The National Credit Union Administration today issued its annual letter to credit unions listing its 2020 supervisory priorities as well as updates on regulations and the agency’s modernization programs.

The full letter is available in the Letters to Credit Unions and Other Guidance section of NCUA.gov.

“This is going to be an exciting and productive year for the NCUA,” Chairman Rodney E. Hood said. “We made important strides in 2019 towards updating regulations, easing burdens on credit unions, as well as modernizing our examination process. These efforts will continue in the new year.

“Credit unions and their members can be assured the NCUA’s commitment to safety and soundness and to protecting the Share Insurance Fund is the foundation for everything we do,” Hood said. “By providing a modern regulatory system and supervision framework that is effective without being excessive, we will maintain a strong credit union system that promotes innovation, inclusion, and member services.”

The agency’s 2020 supervisory priorities are:

• Bank Secrecy Act and anti-money-laundering compliance;
• Consumer financial protection;
• Cybersecurity;
• Credit risk and liquidity risk;
• Continue monitoring the implementation of  the new standard for current expected credit losses, or CECL; and
• Planning for the transition from the London Interbank Offered Rate, or LIBOR, as the benchmark for setting interest rates.

The letter also describes the NCUA’s modernization efforts, including the planned general release of NCUA Connect, the agency’s new user portal, and MERIT, the new examination platform.

Finally, the letter summarizes statutory and regulatory updates, including additional guidance on serving legal hemp businesses; changes in the appraisal threshold for commercial real estate transactions; the amended supervisory committee audits rule, which took effect Jan. 6; and the amended public unit and nonmember shares rule, which takes effect Jan. 29.

ALEXANDRIA, Va. (Dec. 17, 2019) – Federally insured credit unions generally saw continued positive trends in the third quarter of 2019, according to the latest NCUA Quarterly U.S. Map Review (opens new window).

Growth trends in the credit union system continued in the third quarter of 2019, though loan growth slowed from a year earlier. Median loan growth in the year ending in the third quarter was 3.8 percent, and median asset growth was 1.9 percent. Almost 90 percent of federally insured credit unions reported positive net income at the end of the quarter.

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.

Board Action Bulletin

Risk-Based Capital Rule Delayed; Normal Operating Level Stays at 1.38 Percent

ALEXANDRIA, Va. (Dec. 12, 2019) – The National Credit Union Administration Board held its eleventh open meeting of 2019 at the agency’s headquarters today and approved two items:

• Operating, capital, and National Credit Union Share Insurance Fund budgets for 2020 and 2021.
• A two-year delay for the effective date of the agency’s risk-based capital rule.

The Board also received a staff briefing on the National Credit Union Share Insurance Fund’s normal operating level.

Agency Budgets Set for 2020, 2021

Board members approved, by a 2 to 1 vote, the agency’s budgets for 2020 and 2021 (opens new window). The combined operating, capital, and Share Insurance Fund administrative budgets for 2020 will be $347.4 million. The combined budgets for 2021 will be $360.1 million.

Budget	2020	2021
Operating budget	$315.9 million	$328 million
Capital budget	$25.1 million	$25.2 million
Share Insurance Fund budget	$6.5 million	$6.9 million

Operating budgets for both years assume 1,185 full-time equivalent positions.

Overhead Transfer Rate Set at 61.3 Percent; Operating Fee Rises 1.13 Percent

The 2020 overhead transfer rate will be 61.3 percent, and the operating fee will increase by an average of 1.13 percent for natural-person federal credit unions with assets of more than $1 million.

Detailed information on the overhead transfer rate and operating fee is available in the 2020–2021 Budget Justification (opens new window).

Federal credit unions will fund 70 percent of the NCUA’s 2020 operating budget, and federally insured, state-chartered credit unions will fund 30 percent.

The NCUA will charge federal credit unions the operating fee in March 2020, and payments will be due in April 2020.

The NCUA uses the operating fee to pay the agency’s costs of regulating federal credit unions. The overhead transfer rate is a transfer from the Share Insurance Fund to cover insurance-related expenses paid by both federal credit unions and federally insured, state-chartered credit unions.

Risk-Based Capital Implementation Delayed to 2022

The NCUA’s risk-based capital rule will become effective on Jan. 1, 2022, under a final rule (opens new window) approved by a 2 to 1 vote.

Normal Operating Level Remains at 1.38 Percent 

The normal operating level (opens new window) of the National Credit Union Share Insurance Fund will remain at 1.38 percent.

The normal operating level is the equity level set by the NCUA Board based on an economic stress analysis. The Federal Credit Union Act allows the NCUA Board to set the normal operating level between 1.20 percent and 1.50 percent. Funds available beyond the established normal operating level are distributed to credit unions when all of the statutory criteria are met.

The agency reviews the normal operating level annually.

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. (Dec. 6, 2019) – Data on the financial performance of federally insured credit unions for the quarter ending Sept. 30, 2019, are now available (opens new window) from the National Credit Union Administration.

Beginning with the third-quarter data report, the NCUA has added a new feature: a spreadsheet listing all federally insured credit unions active as of Sept. 30, including key metrics.

The NCUA’s Quarterly Data Summary Reports include an overview of the quarterly Call Report data as well as tables showing the recent history of major credit union performance indicators.

The NCUA also makes extensive credit union system performance data available in the Credit Union Analysis section of NCUA.gov. The analysis section includes quarterly data summaries as well as detailed financial information and a graphics package illustrating financial trends in federally insured credit unions.

WASHINGTON – Five Federal financial regulatory agencies today issued a joint statement on the use of alternative data in underwriting by banks, credit unions, and non-bank financial firms.

The statement from the Federal Reserve Board (Federal Reserve), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) notes the benefits that using alternative data may provide to consumers, such as expanding access to credit and enabling consumers to obtain additional products and more favorable pricing and terms. The statement explains that a well-designed compliance management program provides for a thorough analysis of relevant consumer protection laws and regulations to ensure firms understand the opportunities, risks, and compliance requirements before using alternative data.

Alternative data includes information not typically found in consumers’ credit reports or customarily provided by consumers when applying for credit. Alternative data include cash flow data derived from consumers’ bank account records. The agencies recognize that use of alternative data in a manner consistent with applicable consumer protection laws may improve the speed and accuracy of credit decisions and may help firms evaluate the creditworthiness of consumers who currently may not obtain credit in the mainstream credit system.

Attachment: Interagency Statement on the Use of Alternative Data in Credit Underwriting (opens new window)

Agency	Contact	Phone
Federal Reserve	Susan Stawick	202.452.2955
FDIC	Brian Sullivan	202.898.6534
OCC	Paul Ross	202.649.6870
CFPB	Marisol Garibay	202.435.5160
NCUA	John Fairbanks	703.518.6336

Board Action Bulletin

NCUA Seeks Comment on Higher Real Estate Appraisal Threshold

ALEXANDRIA, Va. (Nov. 21, 2019) – The National Credit Union Administration Board held its tenth open meeting of 2019 at the agency’s headquarters today and unanimously approved two items:

• A final interpretive ruling and policy statement to expand career opportunities for individuals convicted of certain minor offenses.
• A proposed rule raising the threshold for requiring a residential real estate appraisal from $250,000 to $400,000.

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

Policy Changes Would Offer Second Chances on Some Prohibitions

The NCUA Board approved a final interpretive ruling and policy statement (opens new window) allowing people convicted of certain minor offenses to return to work in the credit union industry without applying for the Board’s approval.

“I am pleased with the NCUA Board’s approval of the final second chance rule,” NCUA Chairman Rodney E. Hood said. “The second chance final rule expands the list of exceptions to the application requirement, providing employment opportunities to those who pose no risk to the safety and soundness of the credit union system. This adjustment is not only about regulatory relief, but also it is simply the right thing to do. Expanding career opportunities for those who have taken responsibility for past indiscretions is consistent with Americans’ shared values of forgiveness and redemption.”

Section 205(d) of the Federal Credit Union Act prohibits anyone convicted of a criminal offense involving dishonesty or breach of trust, or who has entered into a pretrial diversion or similar program in connection with a prosecution for such an offense, from participating in the affairs of an insured credit union. An individual in those circumstances must apply to the NCUA Board for its consent in order to work in a credit union.

The policy change expands the list of exceptions to the application requirement. Specifically, convictions or program entries for offenses involving insufficient funds checks of aggregate moderate value, small dollar simple theft, false identification, simple drug possession, and isolated minor offenses committed by covered persons as young adults will not require an application.

Since the Board’s initial proposal in July, the Federal Deposit Insurance Corporation issued a notice of proposed rulemaking (opens new window) that also aims to expand employment opportunities in the banking system for those with a history of minor, non-violent offenses.

The interpretive rule and policy statement will become effective 30 days after publication in the Federal Register.

Proposed Rule Would Lift Residential Real Estate Appraisal Threshold

The threshold for requiring appraisals for real estate transactions secured by single 1-to-4-family residential property would increase from $250,000 to $400,000 under a proposed rule (opens new window) approved by the NCUA Board.

“The NCUA has taken another positive step forward in regulatory reform by raising the appraisal level for residential mortgage loans,” Hood said. “The process of securing a loan and purchasing a home can be time-consuming and stressful, particularly for middle- and working-class borrowers and those who live in underserved areas. So any reasonable steps we can take to reduce the time needed to complete real estate transactions, to simplify the process, and to lower costs are well worth considering.”

Federally insured credit unions would still need to obtain a written estimate of market value for properties that fall below the appraisal threshold, and the proposed rule incorporates the existing statutory requirement that appraisals be subject to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice.

The proposed change would align the NCUA’s appraisal rule with a final rule issued in October by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.

Comments on the proposed rule must be received within 60 days of publication in the Federal Register.

Strong Share Insurance Fund Operating Trends Continue

The National Credit Union Share Insurance Fund (opens new window) posted net income of $24.0 million in the third quarter of 2019, primarily due to strong investment income earnings.

The Share Insurance Fund’s net position was $16.7 billion at the end of the third quarter, and the equity ratio was 1.33 percent. The NCUA calculated the equity ratio on an insured share base of $1.2 trillion.

Third-quarter investment and other income was $80.1 million or a 1.4 percent decrease in income from $81.2 million during the second quarter of 2019. Operating expenses were $48.2 million. The provision for insurance losses increased by $7.9 million.

For the third quarter of 2019, the Chief Financial Officer reported:

• The number of CAMEL codes 4 and 5 credit unions decreased 2.0 percent from the second quarter of 2019 to 200 from 204. Assets for these credit unions increased 1.8 percent from the second quarter of 2019 to $11.2 billion from $11.0 billion.
• The number of CAMEL code 3 credit unions decreased 1.3 percent from the second quarter of 2019 to 861 from 872. Assets for these credit unions decreased 13.9 percent from the second quarter of 2019 to $43.4 billion from $50.4 billion.

Two federally insured credit unions failed through the third quarter of 2019, compared to six through the third quarter of 2018. Total year-to-date losses associated with failed credit unions is $40.3 million, compared to $752.5 million in the third quarter of 2018.

The third quarter figures are preliminary and unaudited.

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.