The National Credit Union Administration (NCUA) Board met briefly on October 18, 2012, to issue a proposal to extend the period that eligible credit unions have to accept the low-income designation, receive a report on the National Credit Union Share Insurance and Corporate Credit Union Stabilization Funds, and approve a community charter conversion. Below is the summary with a few more details of the meeting.
Low-Income Credit Union Proposed Rule
The NCUA Board issued a proposed rule to amend the low-income credit union regulation by extending the time qualified credit unions have to accept a low- income designation. Under the current rule, an FCU that has received notification from NCUA that it qualifies for a low-income designation has 30 days to notify NCUA that it wishes to receive the designation. The proposed rule would extend the response period to 90 days, and also makes minor technical amendments to NCUA’s insurance regulation to reflect current agency practices. Previously, regional directors had the delegated authority to designate FCUs as low-income credit unions but NCUA’s Office of Consumer Protection now has that authority. The proposal would update and amend § 741.204 to remove references to “regional directors” and to replace to those references with “NCUA.” Comments will be accepted for thirty days after publication. While not covered by this proposal, an eligible state chartered credit union may obtain a LICU designation from its state regulator, with NCUA’s approval.
NCUSIF and Stabilization Fund Reports
NCUA staff reported that the NCUSIF’s equity ratio was at 1.32% as of September 30, 2012. The NCUSIF’s reserves stand at approximately $484.9 million, which includes $170.9 million in reserves for specific natural person credit unions and $314.0 million in non-specific reserves. The number of credit unions failures year-to-date is 16. The insurance loss expense decreased by $147.0 million for the month of September.
NCUA reported there are currently 382 CAMEL 4 and 5 credit unions, which represent 2.82% of insured shares, or approximately $23.5 billion. NCUA staff also noted that there are 1,639 CAMEL 3 credit unions, which represent 13.97% of total insured shares, or $116.5 billion. Combined, insured shares in CAMEL 3, 4 and 5 credit unions represent approximately 16.79% of total insured shares.
The Stabilization Fund reported approximately $810 billion in total earned revenues for the quarter ended September 30, 2012.
Charter Conversion Approved
The Board also approved an application for conversion to a community charter for BMI Federal Credit Union in Columbus, Ohio and will allow it to serve businesses and other legal entities in the Columbus, Ohio Metropolitan Statistical Area consisting of Delaware, Fairfield, Franklin, Licking, Madison, Morrow, Pickaway, and Union Counties, Ohio.