ALEXANDRIA, Va.—The NCUA board Thursday will consider a final rule on involuntary liquidations and will also issue a notice of proposed rulemaking related to payday alternative loans (PALs).
As CUToday.info reported, payday alternative loans were included on the NCUA's spring rulemaking agenda released last week.
The board will also receive a quarterly report on the National Credit Union Share Insurance Fund.
The agency issued a proposal seeking to update and clarify its involuntary liquidation procedures for those federally-insured credit unions that enter involuntary liquidation during its January board meeting. More specifically, the proposal would amend the current rule's payout priority provision relating to severance claims. The change would clarify the application of the NCUA's regulation on golden parachute payments to severance claims submitted by employees of liquidated credit unions, NAFCU explained.
NAFCU’s Agenda
Commenting on the proposal in April, NAFCU agreed with many of the changes but also suggested that executive-level severance claims should also be a permitted claim in liquidation: "NAFCU is concerned that restrictions on the provability of separately negotiated executive severance agreements will impair credit unions' ability to recruit, motivate, and retain talented managers and executives," wrote NAFCU Regulatory Affairs Counsel Andrew Morris.
NCUA’s PALs proposal would not be a replacement for the current program, but an alternative. Specifically, this proposal (PALs II) would differ from the current PALs rule by modifying the minimum and maximum amount of the loans, eliminating the minimum membership requirement and increasing the maximum maturity for these loans, NAFCU said.