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NCUA Board Meeting This Thursday: Proposed Rule and Other Updates

The National Credit Union Administration (NCUA) Board will meet on Thursday, May 23 at 7 a.m. (Pacific) to discuss the Share Insurance Fund Quarterly Report, a board briefing and update on the Office of Credit Union Resources and Expansion (CURE), and Proposed Rule, Part 701.32 (Public Unit and Nonmember Shares).

Regarding the proposed rule, federally-insured credit unions can receive payments on shares from public units and political subdivisions thereof and nonmember credit unions. Low-income designated credit unions may also receive payments on shares from other nonmembers.

When the board issued an Advanced Notice of Proposed Rulemaking on alternative capital in 2017, it also requested comments regarding the limits on public unit and nonmember shares. Currently the regulation limits total public unit and nonmember shares to 20 percent of the total shares of the credit union or $3 million, whichever is greater. Credit unions may apply for a waiver to exceed the limit.

Because the limitations the NCUA Board may prescribe to these accounts is not statutory, the board requested comments on revisions which would reduce the regulatory burden of the waiver process and still provide for adequate protection of the share insurance fund.

Also in 2017, the NCUA Regulatory Reform Task Force recommended raising the nonmember deposit limit from 20 to 50 percent, noting: “As the functional equivalent of borrowing, this will parallel the ability of credit unions to borrow from any source up to 50 percent of paid-in and unimpaired capital and surplus per § 1757(9) of the FCU Act.” In addition, the task force moved this recommendation from a Tier 2 to Tier 1 priority in its December 2018 second and final report.

The California and Nevada Credit Union Leagues will monitor the board meeting and provide an update 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.