NCUA Takes Aim At More Regulatory Red Tape In 12th Round Of Proposed Changes
By CU Today Staff —
WASHINGTON—The NCUA is proposing to ease requirements governing credit union fidelity bond coverage, streamline the process for federal credit unions seeking approval to exercise new powers, and simplify Central Liquidity Facility rules as part of the 12th round of its sweeping deregulation initiative.
The proposals announced Wednesday include:
12 CFR 704 and 12 CFR 713--Fidelity Bond and Insurance Coverage
NCUA proposes to amend 12 CFR 704 and 12 CFR 713 to simplify fidelity bond requirements for FICUs and corporate credit unions. The proposal would remove or modify certain requirements related to fidelity bond purchases and renewals, approved bond forms, and guidance on bond coverage levels.
"The proposed rule would continue to require credit unions to maintain adequate fidelity bond coverage and would preserve NCUA oversight of approved bond forms. The board believes these changes would reduce unnecessary regulatory burden while maintaining protection against fraud, dishonesty, theft, and other covered losses," NCUA stated.
CFR 721 – Incidental Powers (Powers of Federal Credit Unions)
NCUA proposes to clarify that FCUs may apply directly to the board for approval of an activity that is not already recognized as an authorized incidental power. While FCUs may still seek guidance from the NCUA Office of General Counsel, the board notes that obtaining an advisory opinion has always been optional. The proposed rule would remove language that has caused confusion about whether an advisory opinion is required before submitting an application to the board, the agency said.
12 CFR 725 – Central Liquidity Facility
NCUA proposes to update 12 CFR 725 by incorporating certain regulatory changes adopted during the COVID-19 pandemic, removing outdated provisions, and simplifying CLF membership and reporting requirements. The proposal would also provide additional flexibility for capital stock subscription adjustments and make technical updates to improve clarity and consistency.
"The board believes these changes would reduce regulatory burden and modernize the CLF regulations while maintaining the CLF's role as a contingent liquidity source for credit unions," NCUA said.
Find a detailed summary for each proposal at https://ncua.gov/news/deregulation-project/.
Originally reported by CU Today.