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CDRLF ad requirements addressed by board
ALEXANDRIA, Va. (5/20/11)—Hoping to improve transparency and ease credit union use of the Community Development Revolving Loan Fund (CDRLF), the National Credit Union Administration (NCUA) approved changes to its rules.
Click to view larger image NCUA Board members receive their monthly report on the status of the NCUSIF and corporate stabilization from NCUA CFO Mary Ann Woodson. Looking on in the foreground are CUNA Chief Economist Bill Hampel and CUNA Deputy General Counsel Mary Dunn. (CUNA Photo)
The proposed changes, however, would also impose new reporting and monitoring requirements, the Credit Union National Association (CUNA) has noted. The NCUA proposal, which was approved unanimously by the board, would change the CDRLF rule’s low-income credit union (LICU) designation criteria to use “median family income” in the standard for LICU determination instead of “median household income.” The NCUA in a release said that the CDRLF changes would likely increase loan demand “due, in part, to reduced program burdens on participating credit unions, thereby enhancing the provision of basic financial services for low-income households.” The proposal was released for a 60-day comment period, and CUNA will soon post a regulatory comment call on the release. The board also approved revisions to its advertising regulations to require radio and television ads to include a reference to National Credit Union Share Insurance Fund (NCUSIF) coverage. Ads that are less than 15 seconds would be exempted. The final rule applies to the cover page of credit union annual reports and main internet pages. Another final rule would implement the Dodd-Frank Act’s temporary unlimited share insurance for non-interest-bearing transaction accounts. The share insurance rule, which will continue until Dec. 31, 2012, applies only to traditional non-interest-bearing accounts, such as a demand checking or share draft accounts that are held by individual members or businesses. The insurance does not apply to negotiable order of withdrawal accounts, money-market accounts, or interest on lawyers trust accounts. Insurance and loan funds were also covered during the monthly briefing on the status of the agency’s NCUSIF and its corporate stabilization fund. NCUA Chief Financial Officer Mary Ann Woodson reported that the NCUSIF's equity ratio stood at 1.29% as of April 30, holding steady in line with last month’s number. The agency also did not write off any insurance loss expenses for the second month straight. The NCUSIF held $1.2 billion in reserves and the Temporary Corporate Credit Union Stabilization Fund had earned $7.2 million in revenues as of April 31. CAMEL 3, 4, and 5 credit unions represented a combined 22% of total insured shares. The number of CAMEL 4 and 5 credit unions increased by eight, totaling 374, while the number of CAMEL 3 credit unions dropped by four. While not discussed at the meeting the NCUSIF report indicates an insurance premium is not planned for this year. For more on the NCUA meeting, use the resource link.
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