CUNA Regulatory Comment Call

October 29, 2008

EXECUTIVE SUMMARY

• The National Credit Union Administration (NCUA) has issued an interim final rule to amend its share insurance rules so it is consistent with recent actions by Congress that temporarily increases the maximum share insurance amount from $100,000 to $250,000 and increases the coverage for custodial loan accounts, which will now be referred to as mortgage servicing accounts. The increase in the share insurance amount will be in effect until December 31, 2009, unless it is extended or made permanent.
• The rule provides the following options with regard to the extent changes need to be made to the official sign to reflect the temporary increase in the maximum share insurance limit:
  • Continue to display the current sign, and there will be no penalty for credit unions that choose this option.
  • Display the sign that NCUA will distribute and post on its website that reflects the temporary increase.
  • Alter the current sign to reflect the temporary increase, by hand or otherwise, as long as the altered sign is legible. This could be done by placing a sticker that reads “$250,000” over the portion of the current sign that reads “$100,000.”
  • Credit unions that do not alter the current signs may post additional signs in their lobbies or place a notice on their websites.
  For the mortgage servicing accounts, share insurance coverage will be expanded by insuring the principal and interest portion of a borrower’s payment separately from the borrower’s individual accounts. Until now, these accounts were combined with the borrower’s other accounts at the credit union for purposes of share insurance coverage. The taxes and insurance portion of these payments will continue to be combined with the borrower’s other accounts at the credit union for share insurance purposes. These rules for mortgage servicing accounts will now be consistent with the coverage provided by the Federal Deposit Insurance Corporation for banks and thrifts.
• The rule is effective as of October 22, 2008 and comments will be accepted until December 22, 2008. Please submit your comments to CUNA by December 11, 2008.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.coop and to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6732, if you have questions or would like a copy of the interim final rule. You may also access here.

• NCUA believes this rule will minimize burdens and provide the greatest flexibility possible with regard to displaying the official sign that incorporates the new insurance limits, while also providing members with the necessary information. Do you agree the rule accomplishes this goal? Do you have any suggestions that would provide further improvements?
  
  

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• Other comments?
  
  

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