NCUA Increases Low Income Designations in Bid to Aid MBLs

August 8, 2012 at 7:55 am Leave a comment

Yesterday, NCUA sent out notices to more than 1,000 credit unions that the agency had reviewed the necessary criteria and designate them Low-Income Credit Unions.  This means that federally chartered credit unions that received this designation are no longer subject to the member business loan cap and are eligible to receive secondary capital. 

In making the announcement, NCUA explained in a letter to credit unions that the recipients of the letter must simply acknowledge that they wish to opt into the designation.  Eligible state-chartered credit unions also received notice of the designation, but in accompanying Q&A, NCUA explained that NCUA must work with state regulators to finalize any approval.  Actual Low-Income Credit Union designation benefits can also vary by state, based on state law.  For New York credit unions this shouldn’t be a problem since the criteria used by NCUA in determining Low-Income Credit Union designation is identical to that used by the Department of Financial Services.

NCUA didn’t change any of the requirements for qualifying credit unions.  It simply reviewed the necessary information and determined which credit unions meet the criteria without making them fill out the necessary paper work.

The NCUA deserves a lot of credit on this one for creative and aggressive use of its regulatory powers.  By streamlining the designation process it will give more credit unions the flexibility that all credit unions are seeking as part of our federal legislative agenda.  In addition, by having the regulatory relief included in a package of White House initiatives to aid areas impacted by the Midwest drought, NCUA underscores the importance of credit unions as instruments of economic growth.  Something tells me that a banking lobbyist stayed up last night coming up with new and creative ways to criticize the NCUA for this initiative, even though they are constantly complaining that credit unions don’t do enough to help the underserved.

New Changes to Remittance Regulations

Yesterday the CFPB announced further amendments to its remittance regulations. These regulations, which take effect February 7, 2013, impose extensive new disclosure requirements as well as dispute resolution procedures on institutions that remit funds to foreign countries.  I have not been able to look closely at the 168 page regulation but its major thrust seems to be that institutions providing 100 or fewer remittances in a year will not be subject to many of these new regulations.





Entry filed under: Advocacy, Compliance, Regulatory. Tags: , , , , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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