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WASHINGTON—Five federal regulatory agencies issued a joint final rule (opens new window) to implement provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 requiring regulated institutions to accept certain private flood insurance policies in addition to National Flood Insurance Program policies.

The rule, which takes effect July 1, 2019:

• Implements the Biggert-Waters Act requirement that regulated lending institutions accept private flood insurance policies that satisfy criteria specified in the Act;
• Allows institutions to rely on an insurer’s written assurances in a private flood insurance policy stating the criteria are met;
• Clarifies that institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria; and
• Allows institutions to accept certain flood coverage plans provided by mutual aid societies, subject to agency approval.

Regulations implementing the federal flood insurance statutes prohibit regulated lending institutions from making loans secured by improved real property located in special flood hazard areas unless the property has adequate flood insurance coverage.

Media Contacts

Agency	Contact	Phone
Federal Reserve Board	Susan Stawick	202.452.2955
FCA	Toni DeLancey	703.883.4056
FDIC	David Barr	202.898.6992
NCUA	John Fairbanks	703.518.6330
OCC	Bryan Hubbard	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”

Board Action Bulletin

ALEXANDRIA, Va. (Feb. 14, 2019) – The National Credit Union Administration Board held its second open meeting of 2019 at the agency’s headquarters today and 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.

Supervisory Committee Audit Changes Will Simplify Compliance

The NCUA Board approved a proposed rule (opens new window) amending the supervisory committee audit regulation for federally insured credit unions.

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

The rule makes two major changes:

• Replaces the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures contained in a new Appendix A.
• Eliminates the current 120-day time limit for receiving a third-party audit report and gives credit unions the ability to negotiate a delivery date.

The proposed rule implements recommendations contained in the agency’s Regulatory Reform Task Force’s reform agenda.

Rule Requires Credit Unions to Accept Certain Private Flood Insurance Policies

The Board approved, by notation vote on Jan. 31, a final interagency rule (opens new window) requiring federally insured credit unions to accept certain private flood insurance policies in addition to National Flood Insurance Program policies.

Federal flood insurance statutes require regulated lending institutions, including federally insured credit unions, to ensure the purchase of flood insurance for loans secured by improved real property located in areas having special flood hazards.

Five federal agencies, including the NCUA, issued the rule, which will take effect July 1. The rule requires federally insured credit unions to accept private flood insurance policies meeting statutory requirements and allows federally insured credit unions, under certain restrictions, to accept policies that do not meet these requirements.

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.

Opinions Cover Share Insurance Fund, Operating Fund, CLF and CDRLF

ALEXANDRIA, Va. (Feb. 15, 2019) – The National Credit Union Administration’s four funds earned unmodified, or “clean,” audit opinions for 2018, according to audited financial statements released today by the agency’s Office of the Inspector General.

The complete 2018 financial statement audits (opens new window) are available on NCUA.gov.

The financial statements, audited by the independent auditor KPMG LLP, cover the National Credit Union Share Insurance Fund, the agency’s Operating Fund, the Central Liquidity Facility, and the Community Development Revolving Loan Fund.

The Share Insurance Fund, which held $15.8 billion in assets on Dec. 31, 2018, protects the deposits of more than 115 million members at about 5,400 federally insured credit unions.

ALEXANDRIA, Va. (Feb. 25, 2019) – The video recording of the Jan. 17, 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 January open meeting, the Board unanimously approved two items:

• The agency’s 2019 Annual Performance Plan, which outlines the strategies and indicators the NCUA will use to improve performance and set priorities for achieving the agency’s mission and strategic goals described in the 2018-2022 Strategic Plan.
• A request from the Illinois Department of Financial and Professional Regulation to revise its member business lending rule to provide parity with NCUA’s rule.

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

The Office of Public and Congressional Affairs briefed the Board on the agency’s website redesign.

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. (Feb. 28, 2019) – The National Credit Union Administration issued one prohibition order in February. This individual is prohibited from participating in the affairs of any federally insured financial institution.

• Deborah N. Peters, a former institution-affiliated party of Wilkes-Barre City Employees Federal Credit Union in Wilkes-Barre, Pennsylvania, agreed and consented to the issuance of a prohibition order and agreed to comply with all of its terms to settle and resolve the NCUA Board’s claims against her.

Prohibition and administrative orders are searchable by name, institution, city, state, and year at the NCUA’s Administrative Orders webpage. The webpage also provides links to the enforcement actions of federal banking agencies against other institutions or their affiliated parties.

You may view NCUA enforcement orders online or inspect them at NCUA’s Office of General Counsel between 9 a.m. and 4 p.m. Eastern, Monday through Friday. You also may order copies by mail from NCUA at 1775 Duke St., Alexandria, VA 22314-3428.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

ALEXANDRIA, Va. (March 6, 2019) – Data on the financial performance of federally insured credit unions for the quarter ending Dec. 31, 2018, are now available from the National Credit Union Administration.

The NCUA’s Quarterly Credit Union 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 graphics packages illustrating financial trends in federally insured credit unions.

The Federal Financial Institutions Examination Council (FFIEC) members today issued principles to promote consistency, clarity and ease of reference for the presentation of information in examination reports. The FFIEC Policy Statement on the Report of Examination (opens new window) was developed as part of the FFIEC’s Examination Modernization Project (opens new window), which is aimed at reducing unnecessary regulatory burden on community financial institutions.

The federal banking agencies, consisting of the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), are rescinding their 1993 Interagency Policy Statement on the Uniform Core Report of Examination, and replacing it with this FFIEC policy statement.

The FFIEC was established in March 1979 to prescribe uniform principles, standards, and report forms and to promote uniformity in the supervision of financial institutions. It also conducts schools for examiners employed by the five federal member agencies represented on the FFIEC and makes those schools available to employees of state agencies that supervise financial institutions. The Council consists of the following six voting members: a member of the FRB; the Chairman of the FDIC; the Director of the Consumer Financial Protection Bureau (CFPB); the Comptroller of the Currency; the Chairman of the NCUA; and the Chairman of the State Liaison Committee (SLC).

Media Contacts

Agency	Contact	Phone
FDIC	Julianne Fisher Breitbeil	202.898.6895
FRB	Darren Gersh	202.452.2955
NCUA	John Fairbanks	703.518.6330
OCC	Stephanie Collins	202.649.6870
SLC	James Kurtzke	202.728.5733
CFPB	David Eskola	202.435.7425

ALEXANDRIA, Va. (March 7, 2019) – The National Credit Union Administration Board today approved a $160.1 million equity distribution from the National Credit Union Share Insurance Fund that will be paid to eligible credit unions in the second quarter of 2019.

“While continuing to advance the objectives of protecting member deposits and maintaining a safe and sound credit union system, we have worked prudently to issue the second largest distribution in the history of the Share Insurance Fund,” NCUA Board Chairman, J. Mark McWatters said. “This action, along with others taken by the NCUA Board, including closing the Stabilization Fund in 2017, kept $1.3 billion at work in credit unions by negating the need for insurance fund premiums and put nearly $900 million back to work in credit unions and their communities with the last two Share Insurance Fund distributions.”

“This is the second largest distribution to credit unions in the history of the Share Insurance Fund — only last year’s distribution was larger,” NCUA Board Member Rick Metsger said. “I am pleased that NCUA’s successful management of the NGN program and its successful lawsuits against the firms that sold toxic assets to corporate credit unions have made it possible for us to return funds to credit unions two years in a row.”

A financial institution that filed a quarterly Call Report as a federally insured credit union for at least one reporting period in calendar year 2018 will be eligible for a pro rata distribution. The eligibility criteria for credit unions to receive an equity distribution is detailed in a final rule (opens new window) approved by the NCUA Board in February 2018.

Based on the total of insured shares reported in the fourth quarter Call Reports, the equity ratio of the Share Insurance Fund was 1.39 percent at the end of 2018, which is above the Board approved normal operating level of 1.38 percent. To reduce the equity ratio to the approved normal operating level, a $160.1 million distribution is required.

The NCUA Board will continue to monitor the health and risk exposure of the Share Insurance Fund, and will evaluate the normal operating level each year to determine its appropriate level, based on an analysis of data and trends as they evolve overtime.

Additional information on the Share Insurance Fund’s equity ratio and normal operating level is available on the NCUA’s website.

ALEXANDRIA, Va. (March 12, 2019) – By working together in a bipartisan manner, the NCUA Board enacted a number of regulatory reforms and modernization initiatives to meet its statutory obligation of ensuring a safe and sound credit union system while providing credit unions with measures of regulatory relief, National Credit Union Administration Board Chairman J. Mark McWatters and Board Member Rick Metsger said today.

“Over a period spanning both of our chairmanships, we oversaw a reform and modernization effort allowing both the NCUA and the credit union system to navigate a rapidly evolving financial services marketplace while still maintaining safety and soundness,” McWatters said. “I want to thank Rick for his support and willingness to work with me on our shared regulatory reform agenda.”

“What I am most proud of over the last three years is that we implemented these reforms, through a bipartisan — or, more accurately, non-partisan — consensus of what needed to be done,” Metsger said. “It has truly been a partnership and one that has benefited credit unions, their members, and the nation as a whole.”

Chairman McWatters and Board Member Metsger made these remarks while participating in a panel discussion at the Credit Union National Association’s annual Governmental Affairs Conference in Washington, D.C.

During McWatters’ and Metsger’s tenure as a two-person Board, the NCUA undertook several initiatives strengthening the credit union system and enhancing the agency’s ability to execute its mission in a more efficient and effective manner. Key accomplishments include:

• Implementing an extended examination cycle for well-capitalized and well-managed credit unions;
• Modernizing the NCUA’s field-of-membership rules to promote greater access to affordable financial services;
• Closing the Temporary Corporate Credit Union Stabilization Fund in 2017 and transferring its assets and obligations to the National Credit Union Share Insurance Fund.
• Returning nearly $900 million in share insurance dividends to eligible institutions in 2018 and 2019;
• Implementing an agency-wide realignment consolidating several agency functions and closing two regional offices;
• Delaying the implementation date of the 2015 risk-based capital rule for one year and raising the asset threshold defining complex credit unions;
• Improving and centralizing the NCUA’s appeal process to make it more efficient, consistent, and transparent;
• Making sizeable investments in new technology allowing the agency to conduct its examination and supervision functions in the future more efficiently and with fewer disruptions to credit union operations; and
• Enhancing the transparency and accountability of the NCUA’s decisions, operations, and budget.

The panel discussion also addressed potential future challenges for the credit union system and for the NCUA. Both Board Members agreed that increasing cybersecurity risks, fluctuating interest rate risks, changing demographics, growing competition from new financial service providers, and continuing industry consolidation are significant challenges for federally insured credit unions going forward.

“All credit unions need to consider whether their product and service mix is consistent with their members’ future needs,” Metsger said. “This will require new ideas and investments in people, processes, and technology. The old ways of doing things will not work in this era of fintechs, mobile banking, and increasing competition. Each one of us, the regulator and the regulated, have a role to play in shaping the future of the credit union movement.”

McWatters added that these challenges mean the NCUA must modernize its examination and supervision program, replace outdated technology and systems, and reduce its regulatory footprint where possible.

“The NCUA has several initiatives in process to improve and modernize how the agency conducts its examination and supervision program,” McWatters said. “This means modifying our processes and procedures, leveraging technology, collaborating with state supervisors, and moving to more off-site supervision. It will take time to develop and implement these improvements and systems, but they will transform how the agency approaches its safety and soundness mission in the future.”