December 17, 2013
Tuesday Edition
New NCUA capital rules coming in 2014

Credit unions should expect new capital rules early next year. NCUA Chairman Debbie Matz told the CU Journal that the old seven percent leverage capital standard was just a best guess by Congress in 1998. She says for many that mark will be sufficient, but not for risk-based credit unions.

Matz did not offer the trade publication more details except to say that it might happen in the first quarter. If the NCUA does release a proposal to credit unions, it would follow what other financial regulators are proposing for financial institutions. The hope is that by raising the capital buffers it will help avoid the shortages that helped to propel the financial crisis. 

The NCUA has already announced that it is working on building a new risk-based capital framework tailored to protect the credit union community from losses. Read the full story on the CU Journal's website. CUNA President/CEO Bill Cheney wrote an opinion piece on new capital requirements for the CU Times.  

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Washington wire

Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) agreed to a budget deal late Tuesday evening which provides an outline to fund the government through the end of fiscal year 2015. The deal passed the House on Thursday with a strong bi-partisan vote. It will be voted on by the Senate later this week.

The budget agreement presents no direct impact on credit unions: the agreement does not include comprehensive tax reform, nor does it include tax reform instructions for the Ways and Means Committee and the Finance Committee. While it does include new revenue, it generates that revenue through various fee increases, but no increases to Fannie Mae and Freddie Mac guarantee fees. 

From a process perspective, there are a few things to consider:

  • Congress has demonstrated it can work together on fiscal issues. There has also been a recognition that while the “grand bargain” may be too much to bite off, smaller efforts can still yield positive results.

  • The agreement sets a two-year budget. This will allow appropriators to get back to regular order. While Congress still needs to appropriate the funds consistent with the budget agreement, the spending parameters have been set. Work on the fiscal year 2015 appropriations will begin in January, giving appropriators nine months to move that legislation through the process. More importantly, the absence of a funding crisis will provide breathing room for tax writers and other committees to tackle pending business.

This could help speed things along for issues like tax reform. Chairman Ryan, Sunday on “Meet the Press,” certainly conveyed that hope, encouraging viewers to pay attention to the Ways and Means Committee in the first quarter of next year.

Click here to view the full Legislative Update.

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InfoSight spotlight: Information Sharing

Section 314(a) of the USA Patriot Act authorized law enforcement authorities to communicate with financial institutions about suspected money launderers and terrorists (§103.100). A request for information under section 314(a) (referred to as a “314(a) request”) will be made by the Financial Crimes Enforcement Network (FinCEN).

Credit unions are not required by a 314(a) request to close any account or take any other action with respect to an account or a transaction by virtue of a match with any named subject. Credit unions do not need to maintain the list of named subjects for the purpose of evaluating whether to open an account or to conduct a transaction, unless specific instructions accompanying a 314(a) request state otherwise.

A FinCEN 314(a) request is highly confidential, and a credit union may not disclose to any other person the fact that FinCEN has requested or obtained information, except to the extent necessary to comply with FinCEN’s request.

Use the resources that are included in Information Sharing topic of InfoSight to stay in compliance.

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Provide exam feedback to CUNA

Credit unions are encouraged to complete a CUNA Exam Survey following their state or federal exam by Jan. 10, 2014. The results of the survey are compiled to gain a greater perspective on the federal, as well as individual state, exam process. The data within the survey is confidential and no one outside of CUNA Marketing Services will see the individual data.

While many times the exam process is looked upon as a negative or can be tension-filled, there are exams, or examiners, that are positive. CUNA is looking for that feedback, as well. The results will help CUNA and leagues with their advocacy efforts, especially in the exam-related area. This is always one of CUNA and the League's highest priorities.

This is the second year for the CUNA Exam Survey. Visit CUNA and League Credit Union Exam Survey website to begin.

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In This Issue
Tuesday Edition
New NCUA capital rules coming in 2014
Washington wire
InfoSight spotlight: Information Sharing
Provide exam feedback to CUNA
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