NCUA Board Seeks Input on 2022-2023 Budget; Passes Shared Facilities Rule

In a meeting today, the National Credit Union Administration Board passed a final rule providing multiple-common-bond federal credit unions additional flexibility in adding underserved areas; discussed its proposed budget; noted the forthcoming release of its strategic plan; and discussed the status of the NCUSIF.

1. Quarterly NCUSIF Briefing: The assets of the insurance fund have passed the $20 billion threshold. The Board is requesting updated investment policies and reports to more efficiently assess the performance of the portfolio to maximize the benefits to insured credit unions.
   
   The report reflects six failed credit unions year-to-date. The fund’s equity ratio, which is updated twice annually, stood at 1.23%, as of June 30, 2021. (Note: 1.38% is the normal operating level set by the board). Some good news here is that the projected Year-End ratio of 1.28% should further tamp down any moves to impose a premium in the near term. Of note, insured credit unions are expected to fall below 5,000 during the 4th Quarter, reflecting continued industry consolidation.
   
   
2. The NCUA Board is actively engaged in finalizing the 2022-2023 budget, of which a draft has been posted for viewing. Board member Hood indicated that, at present, he cannot support the budget due to the expected increased expenditures, including 50 new employees. He stated a desire for a year-over-year reduction of expenses. Chairman Harper noted that the budget is a work in progress. The draft budget has also been submitted for publication in the Federal Register, and the comment period is open until Dec. 9. The agency will also hold a public budget briefing on Wednesday, Dec. 8, beginning at 2 p.m. The meeting will be livestreamed on NCUA.gov.

   To Comment on the Proposed Budget:
   - Submit comments on Docket # NCUA-2021-0149 at the Federal eRulemaking Portal by Dec. 9.
   - Comments should provide specific, actionable recommendations.
   We want to hear from you! Your League will be commenting on the budget proposal, and we would appreciate your input. Please email us your thoughts - pr@vacul.org

3. The NCUA strategic plan will be published for review and public comment.
    
4. The final Shared Facilities Rule passed 3-to-0. In its final form, the rule has been scaled back from the proposed rule. Multiple-common-bond credit unions will be able to rely upon shared facilities to expand into underserved areas regardless of ownership interest.
   
   The shared or leased facility (including a kiosk, for example) must be capable of taking deposits, accepting loan applications and disbursing loans. The Board members also acknowledged their support of legislative proposals that would expand the pool of credit unions eligible to pursue underserved expansion.
   
   The scaled-back portions of the original proposal would have allowed credit union websites, banking applications on mobile phones, and leased ATMs to be considered a service facility for a  multiple-common-bond FICU.
   
   - Chairman Harper's Statement on the Rule
    
5. The NCUA modernized examination tools were reviewed for the Board including new platforms for examinations. Secure file uploads and downloads are part of the functionality and well as tracking applications for the status of exam findings.

Related: NCUA Board Meeting Coverage: Get Ready for the Return of Examiners
Related: NCUA Board Meeting Coverage: New Rule for Serving Underserved Communities is Approved
Related: NCUA Posts Draft Budget for 2022-23 for Comment; NAFCU Expresses 'Disappointment' in Proposed Increases for Travel, Other Issues
Related: NCUA Board Meeting Coverage: Agency Shares Strat Plan Draft, Addresses Climate Change