ALEXANDRIA, Va.–While its proposal related to risk-based capital is getting most of the attention, the NCUA board also took action on several other items during its meeting here, including putting out for comment proposals around loans to members.
Suspension & Debarment
The board voted 2-0 in favor of issuance of final suspension and debarment procedures and amendment of NCUA Delegation of Authority PRO 16. Agency staff noted the final procedures mirror those proposed in March 2018 and generally follow procedures that agencies following Federal Acquisition Regulations have adopted, and further ensure a commitment to contractor due process developed over years of seeking public comment on expenditure practices.
“This may be a yawner, but it is really, really important,” said NCUA Chairman Mark McWatters. “We have said to contractors, ‘Here are the rules. If there is a disagreement, there is a procedure.’
Loans to Members
The board voted 2-0 to approve a proposal that makes a number of clarifying and technical changes on loans to members, on which it is seeking comment.
it put out for 60-day comment is a rule that would amend the NCUA’s regulations regarding loans to members and lines of credit to members to reduce regulatory burden, improve clarity, and make compliance easier.
“Specifically, the proposed rule will make the NCUA’s loan maturity requirements more user friendly by identifying in one section all of the various maturity limits applicable to federal credit union loans,” NCUA said. “The proposed rule will also make explicit in the regulations that the maturity date for a ‘new loan’ under generally accepted accounting principles (GAAP) is calculated from the new date of origination. Additionally, the proposed rule will seek comment on whether the agency should provide longer maturity limits for 1-4 family real estate loans and other loans permitted by §§ 107(5)(A)(i)-(ii) of the Federal Credit Union Act, such as home improvement, mobile home, and second mortgage loans. Finally, the proposed rule will amend the regulations to more clearly express the limits for loans to a single borrower or group of associated borrowers.”
The board also voted to continue the 18% ceiling on loan interest rates at federal credit unions.