CUNA’s Compliance team provides a concise overview of the items covered at the National Credit Union Association’s (NCUA) September Board meeting.  CUNA’s summary, which is outlined on the CUNA CompBlog is outlined below:

Share Insurance Fund Quarterly Report:  The dividend payout made to credit unions in July is not reflected in this report because the report is as of the quarter end – June 30, 2018.

Appointment of Administrative Law Judges (ALJ): This was a briefing as the Board had already approved NCUA’s appointment of two ALJs.  The action was executed notation vote due to its procedural nature and time sensitivity.  The ALJs are not NCUA employees or officers through this action as they are FDIC officers and are considered FDIC employees.

Proposed Rule, Part 722, Real Estate Appraisals:  the four objectives of the proposal include:

  1. The proposed rule would increase the threshold below which appraisals would not be required for non-residential real estate transactions to $1,000,000. Federally-insured credit unions would still be required to obtain a written estimate of market value of the real estate collateral.
  2. Restructuring 722.3 to make more clear when the following are required: a written estimate of market value; an appraisal conducted by a state-licensed appraiser; an appraisal conducted by a state-certified appraiser.
  3. Exempts certain federally related transactions involving real estate where the property is in a rural area, valued below $400,000, and no state certified or licensed appraiser is available. This is consistent with S. 2155. 
  4. Conforming amendments to certain definitions.

In addition to the changes detailed in the four objectives above, the proposed rule seeks comment on the following:

  • Are there other factors that should be considered in evaluating the current threshold for 1 to 4 family residential transactions? Should it be raised?
  • Should the definition of “new loan” be linked to Generally Accepted Accounting Principles?
  • Do specific areas of the proposal impact a credit union’s use of a U.S. government agency’s or sponsored agency’s insurance or guarantee program(s)? If so, how?
  • Should there be a de minimis dollar amount for exempting transactions from the written estimate of market value? If so, what level?
  • Do the proposed changes make clear the type of transactions that require an appraisal or written estimate of market value?

There is a 60-day comment period after publication in the Federal Register.

Texas Member Business Rule:  The State of Texas amended its Texas Member Business Loan rule to create consistency between their Texas MBL rule and the NCUA rule that became effective June 5, 2018.  The Texas MBL rule was approved by the NCUA Board and applies to both federally and privately insured state-chartered credit unions in Texas. 

Additional information about the meeting can also be found on NCUA’s Board Action Bulletin here.