The NCUA board of directors yesterday held its second open meeting of 2019 and unanimously approved a final proposed rule to clarify and provide additional flexibility in the agency’s regulation covering required credit union supervisory committee audits. The rule amends the supervisory committee audit regulation for federally insured credit unions.

The proposed rule makes two major changes:

• it replaces the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures contained in a new Appendix A; and
• eliminates the current 120-day time limit for receiving a third-party audit report and gives credit unions the ability to negotiate a delivery date.

The Office of the General Counsel also briefed the board on a final interagency rule covering loans in special flood hazard areas, which was approved by the board on Jan. 31.

Federal flood insurance statutes require regulated lending institutions, including federally insured credit unions, to ensure the purchase of flood insurance for loans secured by improved real property located in areas having special flood hazards.

Five federal agencies, including NCUA, issued the rule, which will take effect July 1. The rule requires federally insured credit unions to accept private flood insurance policies meeting statutory requirements and allows federally insured credit unions, under certain restrictions, to accept policies that do not meet requirements.