Regulatory Update, 11-19-2018, Weekly Regulatory Advocacy Report

by Tim Pierce and David Hawkins | Nov 19, 2018

NCUA Budgets Set for 2019, 2020

The NCUA Board approved the budgets for 2019 and 2020. The combined operating, capital, and Share Insurance Fund administrative budgets for 2019 will be $334.8 million. That’s a 1.1% increase from the 2019 funding levels approved by the Board at its November 2017 meeting. The budget for 2020 will be $343.9 million, a 2.7% increase from 2019.

Overhead Transfer Rate Set at 60.5%, Operating Fee Rises 2%

The 2019 overhead transfer rate will be 60.5%, and the operating fee will increase by an average of 2% for credit unions with assets more than $1 million.  Detailed information on the overhead transfer rate and operating fee is available in the 2019-2020 budget justification. Federal credit unions will fund 70.5% of the NCUA’s 2019 operating budget, and federally insured, state-chartered credit unions will fund 29.5%.

NCUA uses the operating fee to pay the agency’s costs of regulating federal credit unions.The overhead transfer rate is a transfer from the Share Insurance Fund to cover insurance-related expenses paid by both federal credit unions and federally insured, state-chartered credit unions.

NCUA will charge the fee in March 2019, and payments will be due April 17, 2019.

Proposed Rule Updates Fidelity Bond Requirements

The NCUA Board approved proposed amendments to fidelity bond requirements to ensure safe and sound credit union operations and protect the National Credit Union Share Insurance Fund.

The proposed rule is intended to:

  • Strengthen oversight of fidelity bond coverage by a credit union’s board of directors;
  • Ensure there is adequate time to discover and file claims following a credit union’s liquidation;
  • Formalize the Office of General Counsel’s September 2017 legal opinion 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 changes are part of the agency’s regulatory reform agenda.  The comment due date will be 60 days after the proposal’s publication in the Federal Register.

NCUA Letter 18-CU-05 Voluntary Credit Union Diversity Self-Assessment

Federally insured credit unions, especially those with 100 or more employees, are encouraged to conduct and submit the annual Voluntary Credit Union Diversity Self-Assessment to the NCUA’s Office of Minority and Women Inclusion before December 31, 2018. NCUA encourages credit unions to use the self-assessment as a source of diversity best practices and as a tool to assess and guide diversity efforts.

The recently updated self-assessment form, instructions for completing it, and several useful diversity-related tools and resources are available on the Credit Union Diversitywebpage. You can also access the self-assessment form at

This voluntary collection is not part of the NCUA or state regulatory examination process and has no impact on CAMEL ratings.  There is no penalty for credit unions with limited or no diversity practices in place and NCUA will not publish diversity information that identifies any particular credit union or individual without their consent.

Summarized in the NCUA Letter to Credit Unions 15-CU-05, the standards provide a framework for credit unions to create and strengthen their diversity policies and practices, including their organizational commitment to diversity, workforce profile and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion. Each credit union may use the standards in a manner that best aligns with its unique characteristics.  If you have any questions about the diversity self-assessment or would like to share a diversity best practice, please contact the NCUA’s Office of Minority and Women Inclusion at 703.518.1650 or

CECL Delayed Implementation made Official

The Financial Accounting Standards Board (FASB) has officially issued an update to its current expected credit losses (CECL) standard, delaying implementation for credit unions for fiscal years beginning after December 2021.

Pending Regulatory Comment Call

Upcoming Effective Dates

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