Learn how NAFCU’s five-point plan will bring regulatory relief to credit unions

(June 17, 2014) — In February 2013, NAFCU was the first trade association to call on this Congress to provide comprehensive broad-based regulatory relief for credit unions. As part of this effort, NAFCU sent Congress a five-point plan for regulatory relief that will significantly enhance credit unions’ ability to create jobs, help the middle class, and boost our nation’s struggling economy. The five-point plan is built on a solid framework of recommendations that provide regulatory relief through the following:

1. Administrative Improvements for the Powers of the NCUA

› Allow a federal credit union to petition NCUA for a waiver of a federal rule in favor of a state rule.

  • ›  Provide NCUA the authority to delay implementation of CFPB rules that affect credit unions andto tailor those rules for credit unions’ unique structure.
  • ›  Require a cost/benefit analysis of all rules that includes a three-year look back and reevaluation of rules that cost 20 percent or more than their original cost estimate.
  • ›  Enact new examination fairness provisions to help ensure timeliness, clear guidance and an independent appeal process free of examiner retaliation.
  • ›  Improve the Central Liquidity Facility by removing the subscription requirement for membership and permanently removing the borrowing cap.2. Capital Reforms for Credit Unions

    › Direct NCUA and industry representatives to conduct a study on prompt corrective action and recommend changes.

  • ›  Modernize capital standards by directing the NCUA Board to design a risk-based capital regime for credit unions that takes into account material risks and allows the NCUA Board to authorize supplemental capital.
  • ›  Establish special capital requirements for newly chartered federal credit unions that recognize the unique nature and challenges of starting a new credit union.3. Structural Improvements for Credit Unions

    › Direct NCUA, with industry input, to conduct a study of outdated corporate governance provisions in the Federal Credit Union Act and make recommended changes to Congress.

› Improve the process for expanding a federal credit union’s field of membership by allowing voluntary mergers among multiple common bond credit unions, easing the community charter conversion process and making it easier to include those designated as “underserved” within a credit union’s field of membership.

4. Operational Improvements for Credit Unions

› Raise the arbitrary cap on member business loans to 27.5% or raise the exemption on MBL loans from $50,000 to $250,000, adjusted for inflation, and exempt loans made to non-profit religious organizations, businesses with fewer than 20 employees and businesses in “underserved areas.”

  • ›  Remove requirements to mail redundant and unnecessary privacy notices on an annual basis, if the policy has not changed and new sharing has not begun since the last distribution of the notice.
  • ›  Allow credit unions greater authority and flexibility in how they invest.
  • ›  Provide NCUA the authority to establish longer maturities for certain credit union loans and greaterflexibility in responding to market conditions.
  • ›  Provide federal share insurance coverage for Interest on Lawyers Trust Accounts (IOLTAs).5. 21st Century Data Security Standards

    › Establish national standards for safekeeping of all financial information.
    › Establish enforcement standards for data security that prohibit merchants from retaining financial

    data, and require merchants to disclose their data security policies to customers.

› Hold merchants accountable for the costs of a data breach, especially when it was due to their own negligence; shift the burden of proof in data breach cases to the party that incurred a breach and require timely disclosures in the event of a breach.

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