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Three Final Rules on NCUA Board’s Agenda

During the National Credit Union Administration (NCUA) Board’s upcoming monthly meeting this week (Thursday Sept. 19), agenda items include the Share Insurance Fund Quarterly Report; Final Rule Part 715 (Supervisory Committee Audits); Final Rule Part 701 Appendix A (Federal Credit Union Bylaws); and Final Rule Part 701 (Payday Alternative Loans II).

The California and Nevada Credit Union Leagues have summarized the following:

Final Rules
Supervisory Committee Audits: In February of this year, the NCUA issued a proposed rule to clarify and simplify the audit process for federally insured credit unions with assets less than $500 million and provide them with additional flexibility. The Leagues generally agreed with and supported the proposed amendments.

Federal Credit Union Bylaws: In June 2019, the NCUA issued a proposed rule to modernize the federal credit union bylaws. The proposed amendments were meant to: update and conform the bylaws to legal opinions issued by the NCUA’s Office of General Counsel; provide greater flexibility to federal credit unions; remove outdated or obsolete provisions; make certain clarifications; and improve readability by incorporating plain English writing principles.

The Leagues supported many of the proposed changes and additions of clarifying staff commentary. However, there were several proposed amendments, particularly in Articles IV-Meetings of Members and V-Elections, that, based on feedback from member credit unions, the Leagues did not support. Many of the proposed provisions were not progressive and constituted overreach by the regulator.

Payday Alternative Loans (PALs): In June 2018, the NCUA proposed a rule that would retain the current PALs product (renamed PALs I) and provide an additional option with different terms and conditions, a new PALs II product.

The Leagues recommended a different approach; specifically, a single PALs program that provides ranges under which FCUs may offer short-term, small-dollar loans. This parameters-based approach would provide credit unions with flexibility to tailor their loan products to meet the needs of the consumers in their communities.

This Week’s Meeting
The Leagues will monitor the NCUA Board meeting and provide an update on the final rules soon after.

NCUA Board meetings are broadcast via livestream video and can be accessed from NCUA’s homepage at www.ncua.gov. Open board meetings are also tweeted live; follow @TheNCUA on Twitter.