Markets Wired

---

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. (June 11, 2019) – Buying a home can be confusing, so the National Credit Union Administration has created a new video that makes the process easier to understand.

The NCUA video, Understanding the Basics of Obtaining a Home Mortgage (opens new window), guides potential homebuyers through the steps of shopping for the right mortgage loan and what to expect during the home buying process.

“An educated consumer is a smarter homebuyer,” NCUA Chairman Rodney E. Hood said. “Knowing what to expect in the process helps give people the confidence they need to make financial decisions for themselves. I encourage credit unions to add these resources to their educational outreach to members.”

The video is part of the agency’s digital campaign for National Homeownership Month (opens new window). Throughout the month, the NCUA will regularly post home buying tips and resources on its Facebook (opens new window) and Twitter (opens new window) sites that credit unions, their members, and consumers in general can use and share.

Consumers can also get basic homeownership information (opens new window) on finding the right home (opens new window), buying a home (opens new window), and owning a home (opens new window) on the agency’s consumer site, MyCreditUnion.gov. All resources are available in Spanish (opens new window).

ALEXANDRIA, Va. (June 14, 2019) – Federally insured credit unions generally saw continued positive trends in the first quarter of 2019, according to the latest NCUA Quarterly U.S. Map Review (opens new window).

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-six percent of federally insured credit unions reported positive net income at the end of the first quarter. Median annual loan growth in the year ending in the first quarter was 5.8 percent, and median annual asset growth 1.6 was percent.

ALEXANDRIA, Va. (June 20, 2019) – National Credit Union Administration Board Chairman Rodney E. Hood has appointed Johnny E. Davis, Jr. as Special Advisor to the Chairman for Cybersecurity.

“Cybersecurity is one of my top priorities as Chairman of the NCUA,” Hood said. “I have great confidence in Johnny’s experience and judgment in this critical area. I will be relying on Johnny to not only provide strategic counsel on cybersecurity policy but also to engage with other federal financial institutions regulators and external stakeholders.”

Davis currently serves as the NCUA’s Division Director for Critical Infrastructure, a role he will continue to fill along with this new responsibility.

Davis has more than 25 years’ experience in information security and infrastructure operations in the military, federal government, and private sector. Prior to joining the NCUA in 2015 as Chief Information Security Officer, Davis served as the Director of Critical Infrastructure Protection for the Department of Veterans Affairs. He also has served as Deputy Chief Information Security Officer at the departments of Interior, Health and Human Services, and the Environmental Protection Agency.

Davis holds a master’s degree in management and information systems from Webster University in St. Louis, Missouri, and a bachelor’s degree in the same discipline from Park University, also in St. Louis. He also holds numerous professional certifications, including: Certified Information Systems Security Professional, Certified Information Systems Auditor, Certified in Risk and Information Systems Control, and Certified Business Continuity Professional.

Davis assumes his duty as Special Advisor on June 20.

Board Action Bulletin

ALEXANDRIA, Va. (June 20, 2019) – The National Credit Union Administration Board held its sixth open meeting of 2019 at the agency’s headquarters today and approved one item:

• A proposed rule delaying the effective date of the agency’s risk-based capital rule to Jan. 1, 2022.

RBC Delay Would Give More Time for Study

The effective date of the NCUA’s risk-based capital rule would move to Jan. 1, 2022, under a proposed rule (opens new window) approved by a 2-1 Board vote.

“This is an appropriate time to consider additional improvements to the risk-based capital rule,” NCUA Board Chairman Rodney E. Hood said. “We have a strong economy, and credit unions are very well-capitalized, with a net worth above 11 percent. As a regulator and steward of the National Credit Union Share Insurance Fund, I am committed to a system of prudent capital standards as required by the Federal Credit Union Act.”

Comments on the proposed rule must be received within 30 days after publication in the Federal Register.

The proposed delay will provide the NCUA Board time to holistically consider additional improvements to credit union capital standards, such as subordinated debt authority, capital treatment for asset securitization, and a community bank leverage ratio equivalent for credit unions. It also will give the agency time to integrate changes into the rule before it goes into effect. During the extended delay period, the NCUA’s current prompt corrective action requirements would remain in effect.

The Board approved the risk-based capital rule at its October 2015 meeting and scheduled it to go into effect Jan. 1, 2019.  At its October 2018 meeting, the Board unanimously approved a rule that delayed the effective date to Jan. 1, 2020, and raised the asset threshold for a complex credit union from $100 million to $500 million.

Based on Call Report data from the end of 2018, if the NCUA’s risk-based capital rule were to go into effect today, 545 complex credit unions would be subject to its requirements, and more than 99 percent of all complex credit unions would be considered well-capitalized.

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.

Chairman Hood Praises the Act’s “Democratization of Banking and Credit”

ALEXANDRIA, Va. (June 26, 2019) – To mark the 85^th anniversary of the Federal Credit Union Act, the National Credit Union Administration has launched a digital outreach initiative, “85 Years of Community, Service, and Savings.”

NCUA Board Chairman Rodney E. Hood urged credit unions to make use of the agency’s digital resources.

“On this 85^th anniversary of the signing of the Federal Credit Union Act, we should feel a great sense of accomplishment, but we should also accept the challenge to do more,” Hood said. “I encourage credit unions and their members to take advantage of the information resources NCUA has available. An educated credit union member is a more financially secure member.

“The Federal Credit Union Act led the way for a further democratization of banking and credit that contributed to the economic rebirth of the country following the Depression,” Hood said. “Through times of relative peace and times of conflict, through economic booms and busts, through societal and technological changes, credit unions have continued serving their members and communities. They have kept the promise of people helping people by fostering greater financial inclusion, accessibility, and opportunity for all Americans.”

The full text of Chairman Hood’s remarks is available online.

The digital outreach effort includes a commemorative page on its main website, NCUA.gov, that traces the history of the Federal Credit Union Act, the agency, and the credit union system. The page will feature a new credit union timeline, a special consumer infographic (opens new window), and a commemorative seal (opens new window). A new page (opens new window) on the agency’s MyCreditUnion.gov (opens new window) consumer website highlights how credit unions help their members build secure financial futures.

The NCUA is sharing significant events in credit union history, its leadership, and its work on its Facebook page (opens new window) and its Twitter accounts, @TheNCUA (opens new window) and @MyCUgov (opens new window). Credit unions and members can follow and share in this initiative using the hashtag, #FCUAct85.

Today, there are 5,335 federally insured credit unions serving more than 117 million members and holding assets of more than $1.5 trillion.

Hood Attends Ceremonial Swearing-In Administered by Vice President Pence

WASHINGTON, D.C. (June 27, 2019) – National Credit Union Administration Chairman Rodney E. Hood today recounted how values of humility, integrity, hard work, compassion, and service to others have shaped his outlook and his career.

“I did not set out to dedicate my work life to financial services,” Hood said. “My first choice of a career, stemming from my time spent working as a church missionary in Africa, was to enter the ministry. As it turned out, life had other plans for me. But that urge to service I felt as a young man did point the way to my future path. Once I embarked on my banking career, I always saw our primary mission in simple terms: people helping people.

“Credit unions arose and grew not out of government fiat,” Hood said. “Instead, they grew from a grassroots movement of people who were forgotten and were being left behind. At every step, it was about the promise of people helping people. It was the promise of people working together to use their assets to invest in their communities.”

Hood spoke at a ceremonial swearing-in administered by Vice President Michael R. Pence at the Eisenhower Executive Office Building in Washington, D.C. The full text of his remarks is available online.

“Rodney Hood has been a leader in the financial industry for 25 years,” Pence said. “He’s dedicated his career to helping others achieve their dreams. And now, he’s stepped up to serve our country in an even bigger way by protecting consumers from harm and ensuring integrity, accountability, and transparency throughout the financial industry. President Trump promised to fight for the prosperity of all Americans, and I am confident that Rodney will help us succeed in this great task.”

President Donald J. Trump nominated Hood to the NCUA Board on January 16. He was confirmed by the Senate on March 14 and officially took office April 8. His term will expire on August 2, 2023.

Prior to rejoining the NCUA Board, where he previously served as Vice Chairman, Hood served as a corporate responsibility manager for JPMorgan Chase, managing national partnerships with non-profit organizations promoting financial inclusion and shared prosperity for underserved communities.

He also held the position of associate administrator of the Rural Housing Service at the U.S. Department of Agriculture and was a member of the Board of Governors for the University of North Carolina.

Before entering public service, Mr. Hood held management positions in retail finance, commercial banking, affordable housing and community development at G.E. Capital, Bank of America, Wells Fargo and North Carolina Mutual Life Insurance Company.

Hood holds a bachelor’s degree in business, communications, and political science from the University of North Carolina at Chapel Hill.

ALEXANDRIA, Va. (July 12, 2019) – Catherine Galicia has been named senior policy counsel to National Credit Union Administration Board Member Todd M. Harper.

Galicia joins the NCUA from the Consumer Financial Protection Bureau, where she directed legislative affairs. She assumed her duties July 8.

“For more than two decades, Catherine has deeply impressed me with the breadth and depth of her knowledge of financial services and consumer financial protection policy,” Harper said. “In advising lawmakers, regulators, and industry leaders, she has demonstrated excellent judgment, regularly built trust among stakeholders to forge bipartisan coalitions, and strategically resolved differences between parties. I look forward to working with her to protect the safety and soundness of the credit union system and the interests of the 117 million Americans who place their faith in that system.”

Galicia has worked on financial services policy in the public and private sectors since 1995. Her experience includes service as senior counsel for the Senate Banking, Housing, and Urban Affairs Committee; as associate vice president for legislative affairs at the Mortgage Bankers Association; as vice president and director of government affairs at Banco Popular; and as counsel and legislative staff in the U.S. Senate and House of Representatives.

Galicia holds a bachelor’s degree from the University of Connecticut and a Juris Doctor from the Rutgers University School of Law.

ALEXANDRIA, Va. (July 12, 2019) – Credit unions in the path of Tropical Storm Barry are advised to take precautions as it approaches the Gulf Coast, the National Credit Union Administration said today.

“We are urging credit unions in the path of the storm to take steps to protect their staff and secure their operations,” NCUA Board Chairman Rodney E. Hood said. “The NCUA will be closely monitoring Barry’s progress, and we will be ready to assist credit unions with maintaining or restoring operations, if necessary. Credit unions and members can find information on staying safe from several online resources, and we encourage everyone to be alert for official announcements and media reports as the storm draws near.”

The NCUA maintains a hurricane and disaster information page on its website as well as on the MyCreditUnion.gov (opens new window) consumer information page. The National Hurricane Center (opens new window) has regular updates on the storm as it approaches landfall, and the Department of Homeland Security has an information page on being prepared for hurricanes (opens new window).

Credit union members with questions may contact the NCUA’s Consumer Assistance Center at 800.755.1030 Monday through Friday between 8 a.m. and 5 p.m. Eastern. The NCUA’s Office of Credit Union Resources and Expansion can provide urgent needs grants (opens new window) of up to $7,500 to low-income credit unions that experience sudden costs to restore operations interrupted by the storm.

Board Action Bulletin

ALEXANDRIA, Va. (July 18, 2019) – The National Credit Union Administration Board held its seventh open meeting of 2019 at the agency’s headquarters today and approved three items:

• A final rule amending the agency’s regulation requiring real estate appraisals for certain transactions to provide greater clarity and a measure of regulatory relief.
• A proposed interpretive rule and policy statement that would expand career opportunities for individuals convicted of certain minor offenses.
• A final rule updating the agency’s fidelity bond requirements for corporate and natural-person credit unions.

The Chief Financial Officer briefed the Board (opens new window) on the agency’s revised 2019 budget estimates, which currently project redistributing $5.3 million to agency priorities.

Final Appraisal Rule Increases Real Estate Appraisal Requirement Threshold

The Board approved a final rule (opens new window) that amends the agency’s real estate appraisal requirements for certain transactions as part of the NCUA’s regulatory reform agenda.

“This rule is part of a commonsense approach to regulation that will help put more resources into our communities,” NCUA Board Chairman Rodney E. Hood said. “Rethinking the appraisal rule is an example of regulatory reform that is positive and can help boost economic activity and job creation, particularly in some of our nation’s more hard-pressed areas.”

The final rule accomplishes four agency objectives:

• Increases the threshold for required appraisals in commercial real estate transactions from the current $250,000 to $1 million;
• Reorganizes the appraisal regulation to make it easier to  determine when a written estimate or an appraisal is required;
• Exempts real estate transactions located in rural areas from appraisal requirements if certain conditions are met; and
• Amends the definitions section of the rule to reflect these changes.

The final rule will become effective 90 days after publication in the Federal Register.

Policy Changes Would Offer Second Chances on Some Prohibitions

Board members approved a proposed interpretive ruling and policy statement (opens new window) that would allow individuals convicted of certain minor offenses to return to work in the credit union industry without applying for the Board’s approval.

“I have heard it said that forgiveness is less about changing the past than it is about changing the future,” Chairman Hood said, “and this rulemaking before us today keeps 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 proposed changes would reduce the number of offenses that would require that application.

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

Budget Projects Redistributing $5.3 Million

The Board approved the Chief Financial Officer’s recommendation to redistribute $5.3 million to agency needs.

Projected staff levels for the remainder of 2019 show employee pay and benefits will be approximately $4.2 million below the approved Operating budget. That money and other funding will be applied to certain administrative and contracted services, high-priority capital projects, and additional staffing in the current Office of Public and Congressional Affairs, which will be renamed the Office of External Affairs and Communications.

At its November 2018 open meeting, the Board approved a $304.4 million Operating budget, a $22 million Capital budget, and an $8.4 million Share Insurance Fund Administrative Expenses budget.

Fidelity Bond Requirements Updated

The Board approved a final rule (opens new window) amending the agency’s fidelity bond requirements to better ensure safe and sound credit union operations and protect the National Credit Union Share Insurance Fund.

The final rule, part of the agency’s regulatory reform agenda, will:

• Strengthen oversight of fidelity bond coverage by a credit union’s board of directors;
• Create a one-year discovery period following a credit union’s liquidation;
• Codify the Office of General Counsel’s September 2017 legal opinion (opens new window) permitting a natural-person credit union to extend bond coverage to certain credit union service organizations; and
• Clarify the documents subject to the NCUA Board’s approval and require all bond forms receive approval every 10 years.

The final rule does not require a credit union’s supervisory committee to review its fidelity bond renewal.

The final rule will become effective 90 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.