Despite the matter of taxi medallions nowhere on the NCUA Board agenda yesterday, several members of the New York Taxi Workers Alliance attended the meeting, many holding signs saying “Don’t sell us out” and Debt forgiveness now!”
At issue is the debate over the potential sale of the agency’s taxi medallion loans. New York Credit Union Association President/CEO William J. Mellin, CUNA President/CEO Jim Nussle, Illinois Credit Union League President/CEO Tom Kane and CrossState Credit Union Association President/CEO Patrick Conway urged NCUA Chairman Rodney Hood in a letter yesterday not to sell the loans.
In more formal matters, the NCUA board of directors yesterday unanimously approved four items, including a proposed rule expanding eligibility to issue subordinated debt.
Under the proposal, low-income-designated credit unions, complex credit unions and newly chartered federal credit unions would be permitted to issue subordinated debt. According to the agency, this proposed rule will:
- add a new section to NCUA’s regulations addressing limits on loans to other credit unions;
- clarify application requirements to issue subordinated debt;
- expand requirements for note disclosures and offering documents;
- update the borrowing rule to clarify that federal credit unions can borrow from any source; and
- add new safe harbors for repudiation and interest payments.
The proposal is subject to a 120-day comment period.
Another proposed rule approved by the board would provide greater clarity on the regulations governing transactions where federally insured credit unions propose to assume liabilities from or merge with another institution that is not a credit union.
According to the agency, this proposed rule adds a new Subpart D to Part 708(a) of the NCUA’s regulations that simplifies the basic requirements that apply to combination transactions between a federally insured credit union and another type of financial institution, and seeks to ensure that the directors of a federally insured credit union proposing such a transaction understand the nature and ramifications of the proposed transaction. The new rule would also make regulatory provisions applicable to all asset purchases and lists other NCUA regulations that apply to each particular transaction.
The board also approved the 2020 Annual Performance Plan, which outlines the strategies and initiatives the NCUA will use to achieve the performance measures and outcomes described in the 2018–2022 Strategic Plan. Included in the plan are four agency priorities, including:
- fully and efficiently executing the requirements of the agency’s examination and supervision program;
- effectively identifying and evaluating risk in complex credit union portfolios;
- promulgating efficient, targeted regulation tailored to offer meaningful relief without undermining safety and soundness; and
- implementing secure, reliable, and innovative technology solutions.
Further, the board approved an extension of the current 18% interest ceiling on most federal credit union loans until September 2021. The act requires agencies to adjust the maximum amounts of civil monetary penalties annually to account for inflation, according to the agency. The board previously approved these adjustments by notation vote on Jan. 7, 2020. The final rule will become effective upon publication in the Federal Register.
For more information on yesterday’s board meeting, visit NCUA’s website.