Regulatory Modernization Initiative

Results from 2011 through 2016.

Improved Rules
NCUA Actions Benefits

Expanded Regulatory Relief Eligibility for Small and Non-Complex Credit Unions

  • Expanded NCUA’s regulatory exemptions for credit unions with assets of less than $100 million (up from $10 million in 2012)
  • Eased compliance requirements for small credit unions to access emergency liquidity
  • More than doubled the number of small credit unions eligible for regulatory relief in future NCUA rulemakings (4,500 out of 6,000 CUs)
  • Exempted non-complex credit unions (75 percent of all CUs) from risk-based capital requirements

Eliminated Fixed Assets Cap

  • Eliminated federal credit unions’ 5 percent cap on fixed assets
  • Removed the need to apply for regulatory waivers
  • Empowering federal credit unions to make their own business decisions on purchases of land, buildings, office equipment, and technology

Pre-Approved Associational Common Bonds

  • Pre-approved 12 categories of associations that federal credit unions may automatically add to their fields of membership:
    • alumni associations
    • athletic booster clubs
    • Chamber of Commerce groups
    • electric cooperatives
    • ethnic organizations
    • fraternal organizations
    • homeowners’ associations
    • labor unions
    • occupational organizations
    • parent-teacher associations
    • religious organizations
    • scouting groups

Expanding Fields of Membership

  • Proposed a modernized field of membership rule to:
    • Designate each Congressional District as a well-defined local community
    • Serve Combined Statistical Areas with populations up to 2.5 million
    • Raise potential membership to 1 million for federal credit unions in rural areas
    • Extend membership eligibility to honorary discharged veterans, contractors, and businesses in industrial parks
    • Recognize full-service websites and electronic applications as service facilities for select employee groups
    • Modernize the definition of “underserved area”
  • Finalized a principles-based rule on member business lending to:
    • Remove non-statutory limits on member business loans
    • Empower each credit union to write their own business loan policy and set their own limits under the law
    • Eliminate the requirement for all business owners to pledge personal guarantees
    • Remove unnecessary barriers on business loan participations which help credit unions diversify risks

Eased Troubled Debt Restructuring

  • Facilitated credit union loan modifications
  • Ended manual reporting of modified loans
  • Prevented unnecessary foreclosures
  • Kept more credit union members in their homes throughout the housing crisis

Authorized “Plain Vanilla” Derivatives

  • Permits qualified federal credit unions to use “plain vanilla” derivatives to reduce interest rate risks
  • Protects the credit union system from interest rate risks at large credit unions by providing an additional interest rate risk mitigation tool
  • Allows approved federal credit unions to maintain appropriate levels of mortgage loans in portfolios

Approved Treasury Inflation-Protected Securities

  • Offers federal credit unions an additional investment backed by the Federal Government with zero credit risk

Established Charitable Donation Accounts

  • Empowers federal credit unions to safely pool investments designed to primarily benefit national, state, or local charities

Eliminating Full Occupancy Requirement

  • Proposed eliminating a requirement that federal credit unions must plan for and eventually reach full occupancy of acquired premises
Streamlined Processes
NCUA Actions Benefits

“Opt-In” Low-Income Credit Union Designation

  • Implemented an “Opt-In” notification process whereby eligible credit unions can simply reply “Yes” to receive their Low-Income Designation
  • Doubled the number of Low-Income Designations in three years, reaching 2,300 credit unions serving 30 million members
  • Low-Income Credit Unions are authorized by statute to:
  • Expand member business lending beyond the statutory cap
  • Count supplemental capital toward the net worth leverage ratio
  • Raise non-member deposits
  • Apply for Community Development Revolving Loan Fund grants and loans
  • Provided policy flexibility for Low-Income Credit Unions to redeem secondary capital when investors request

Expedited Examinations for Smallest Credit Unions

  • Created an expedited exam process for well-managed credit unions with CAMEL ratings of 1, 2 or 3 and assets up to $50 million
  • Focused expedited exams on issues most likely to pose risks to the smallest credit unions

Referring Member Complaints

  • Referring member complaints directly to federal credit unions
  • Providing supervisory committees with 60 days to resolve each complaint before NCUA intervenes

Approving Fields of Membership

  • Provided a 5-page template for community charter applications rather than requiring hundreds of pages of community documentation
  • Upgraded NCUA’s technology platform to allow credit unions applying to expand their fields of membership to track the status of their applications on-line throughout the approval process

Certifying Credit Unions as Community Development Financial Institutions

  • Signed agreement with US Treasury to double the number of credit unions certified as Community Development Financial Institutions by January 2017
  • Automating existing NCUA data to pre-qualify Low-Income Credit Unions as certified CDFIs eligible for multi-million-dollar grants from Treasury’s CDFI Fund

Cutting Reporting Burdens

  • Beginning with the September, 30, 2016, Call Report, credit unions will only be required to submit aggregate loan and investment information about credit union service organizations
Improved Rules
NCUA Actions Benefits

Authorized “Network Credit Union” Model

  • Creates a cooperative structure where small credit unions can merge without losing their identity or member services flexibility

Extended Loan Maturities

  • Permits loan maturities up to 40 years after loan modifications
  • Significantly reduces monthly payments for borrowers in need

Permitted Indirect Loan Participations

  • Allows credit unions to sell portions of indirect loans to raise liquidity
  • Provides buyers another option to diversify loan portfolios

Expanded Vehicle Fleets

  • Expanded “fleets” from 2 to 5 vehicles for member business loans
  • Increases access to credit for small businesses and startups

Modernized Service Facilities

  • Includes full-service video tellers in the definition of federal credit union “service facilities”
  • Empowers federal credit unions to expand services in underserved areas

Changing Charters in Mergers

  • Permits credit unions to change charters to facilitate voluntary mergers
  • Enhances credit union services for members of merging credit unions
Last modified on
03/05/21