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NCUA unveils 2013 reg review results, including MBL recommendations
ALEXANDRIA, Va. (1/16/14)--Amendments to member business lending (MBL) regulations could be proposed by a National Credit Union Administration committee early this year, the National Credit Union Administration's Office of General Counsel said in its review of agency regulations.

The OGC recommended that MBL regulations "should be revisited and updated to reflect the current business climate and to address certain other pressing issues facing credit unions." The Credit Union National Association has been urging the agency to provide more flexibility to credit unions under its MBL rule.

The OGC said the agency could consider:
  • Whether 'soft costs' should be included in calculating the market value of a construction and development project;
  • Clarifying the meaning of 'associated borrower';
  • Changing collateral valuation;
  • Determining appropriate financial analysis practices as part of the underwriting process;
  • Exempting well-capitalized credit unions with sufficient CAMEL ratings from the MBL rule's personal guarantee requirement;
  • Replacing the two-year direct experience requirement with a more flexible, user friendly method of ensuring a credit union is utilizing qualified individuals in its business lending program; and
  • Updating the rule to clarify the legal relationship between NCUA and state supervisors.
Appraisals and the Central Liquidity Facility are also addressed in the document. The general counsel recommended that the agency eliminate any redundant requirements on credit unions to provide copies of appraisals upon request. Technical changes to CLF language were also suggested.

Other items on the list include:
  • 711 Management Official Interlocks;
  • 712 Credit Union Service Organizations;
  • 713 Fidelity Bond and Insurance Coverage for Federal Credit Unions;
  • 714 Leasing;
  • 715 Supervisory Committee Audits and Verifications;
  • 716 Privacy of Consumer Financial Information;
  • 717 Fair Credit Reporting;
  • 721 Incidental Powers;
  • 724 Trustees and Custodians of Certain Tax-Advantaged Savings Plans;
  • 740 Accuracy of Advertising and Notice of Insured Status;
  • 741 Requirements for Insurance;
  • 745 Share Insurance and Appendix; and 
  • 747 Administrative Actions, Adjudicative Hearings, Rules of Practice and Procedure, and Investigations.
The NCUA reviews all of its rules every three years, scheduling a look at about one-third of its rules each year on a rotating basis. The 2014 list of regulations up for review has not been released.

The agency says its goal is to ensure that all regulations are clearly articulated and easily understood, a goal that the Credit Union National Association endorses.

The CUNA Councils last year reviewed the listed rules and filed comments with the agency. CUNA continues to advocate for a reduction in regulatory burden and other changes that would increase regulatory relief for credit unions.

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