NEWS: Last week, The League filed comment letters on the four proposals in Round 1 of the NCUA’s Deregulation Project:
- We voiced our credit unions’ backing for an NCUA proposal to amend its regulations on supervisory committee audits.
The changes would let federally insured credit unions (FICUs) and auditors apply current, industry-accepted frameworks for evaluating internal controls; end the requirement to verify members’ accounts against the records “of the treasurer” and state more generally that members’ accounts must be verified against the credit union’s records; remove an overly prescriptive requirement that the engagement letter for an outside auditor must be signed by both parties; remove a sentence that requires a supervisory committee to provide NCUA with a copy of audit reports upon request (since the NCUA has the authority to access all FICUs’ books and records); and remove two sentences from the rules that describe the objective of a financial statement audit compelled by the NCUA.
The letter included this: “Wisconsin credit unions say that they welcome this proposal because it will promote efficiency and clarity, plus align the rules with industry best practices.”
- We voiced support for the NCUA proposal to remove Appendix A to part 748, “Guidelines for safeguarding member information,” from its regulations. Appendix A sets standards for FICUs to protect the security and confidentiality of customer records and information and to protect against unauthorized access to or use of such records.
The NCUA has said that the contents of Appendix A would be published as a Letter to Credit Unions and that this change would not alter the expectations for FICUs to safeguard member information. Instead, it would allow for “more efficient revisions, streamline the NCUA’s regulations, and ensure that guidance is conveyed as guidance.”
“Wisconsin credit unions believe that this change will enhance regulatory flexibility and efficiency without reducing member protections,” the letter said.
- We wrote in support of an NCUA proposal to remove Appendix B to part 748, “Guidance on response programs for unauthorized access to member information and member notice,” from its regulations.
Appendix B gives federally insured credit unions (FICUs) guidance for creating programs to address and respond to instances of unauthorized access to member information. The contents of Appendix B would be published as guidance. The NCUA has said that the change would not alter the expectations for FICUs to respond when member information is accessed without authorization. Instead, publishing it as guidance would “be a better vehicle for conveying and updating this information and will help to streamline NCUA’s regulations.”
“Wisconsin’s credit unions say that this change will improve regulatory agility and clarity without reducing consumer protection,” our letter said.
- We told the NCUA that Wisconsin credit unions back their proposal to amend its regulations by removing the requirement that a corporate credit union’s asset and liability management committee must have at least one member who is also a member of the corporate credit union’s board of directors.
According to the NCUA, “this requirement is overly prescriptive and inflexible, and corporate credit union boards should have discretion to determine their ALCO membership.”
The proposal would also remove filing and notification requirements related to a corporate credit union’s annual report and any management letter or other report issued by its independent public accountant. The NCUA has said that these changes would reduce burdens on board members. “Eliminating these filing requirements would remove unnecessary and unduly burdensome requirements on corporate credit unions,” the NCUA has written.