Regulatory Update, 1-8-20, NCUA’s 2020 Supervisory Priorities & Operating Fee Schedule

by Joe Guilfoy | Jan 08, 2020
The National Credit Union Administration (NCUA) issued two letters to credit unions this week providing information on NCUA’s supervisory priorities and updated operating fee schedule.
Supervisory Priorities
NCUA issued its annual letter to credit unions (20-CU-01) listing its 2020 supervisory priorities as well as updates on regulations and the agency’s modernization programs.
The agency’s 2020 supervisory priorities are:
  • Bank Secrecy Act and anti-money-laundering compliance;
  • Consumer financial protection, which NCUA states at a minimum examiners will review Reg E, Fair Credit Reporting Act, Gramm-Leach-Bliley Act (Privacy), small dollar lending, Reg Z, Military Lending Act, and Servicemembers Civil Relief Act;
  • 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 January 6; and the amended public unit and nonmember shares rule, which takes effect January 29.
Operating Fee Schedule
NCUA sent a letter to federal credit unions (20-FCU-01) this week adjusting the operating fee schedule for 2020. Included in the schedule is a link to NCUA’s online calculator for federal credit unions to calculate the exact amount owed in 2020. The average operating fee rate increase for 2020 is 1.13%, which NCUA states is a result of two main factors: the overhead transfer rate (OTR) level and changes in NCUA’s capital investment program. In the letter NCUA indicates that the invoice for the operating fee will be sent in March and will also include any adjustment required to the credit union’s 1 percent of insured shares capitalization deposit. Payment to NCUA will be due by April 15.
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