The NCUA board of directors held its monthly board meeting Thursday, rejecting a proposed final rule Thursday that amended one of the requirements federal credit unions must adopt as a part of their written overdraft policy.
“While it is rare for an open Board meeting to include an item that does not pass, it does occasionally happen,” said NCUA Chairman Rodney Hood. “If I only bring forth ideas to the Board that we know we have the votes for, it does not allow for an honest, open, and full debate. I brought this issue forth because I believe it is important. And the public has a right to transparency on this matter.”
Lacking a second after Hood proposed the motion, the matter was tabled. Hood may, however, bring the proposed final rule before the board at a later date.
The board approved two items, including a proposed rule on joint ownership share accounts and an interim final rule on prompt corrective action. The board also received a briefing on its quarterly report on the Share Insurance Fund.
The board unanimously approved the proposal that would amend the NCUA’s regulation governing the requirements for a share account to be separately insured as a joint account.
The proposed rule on joint ownership share accounts is meant to provide an alternative method to satisfy the membership card or account signature-card requirement. The proposal amends the regulation “to explicitly provide that the signature-card requirement could be satisfied by information contained in the account records of the insured credit union,” according to NCUA.
The board also unanimously approved an interim final rule that makes two temporary changes to the agency’s prompt corrective action regulations that provide relief to credit unions that temporarily fall below well capitalized.
“Because of the pandemic, I am concerned that credit unions may temporarily fall below the well-capitalized level and become subject to various prompt corrective action requirements, Hood said. “This rule provides relief to those that experience a decline in their net worth ratio because of efforts to help their members or because they have experienced a rapid increase in shares because of the flight to safety.”
Finally, it was reported that the Share Insurance Fund reported a net income of $1.2 million and a net position of $17.5 billion for the first quarter of 2020. The fund’s total assets increased to $17.7 billion at the end of the quarter from $16.7 billion at the end of the fourth quarter of 2019.
To learn more about yesterday’s board meeting, visit NCUA’s website.