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NCUA Focuses on Chartering New CUs, Promoting MDIs; Notes CDRLF Grant Window Still Open

Authored By: Carrie Hunt on 6/22/2023

The National Credit Union Administration Board held its sixth open meeting of 2023 and approved a proposal about the agency’s minority depository institution preservation program and a notice and request for comment on the NCUA operating fee schedule methodology. The NCUA Board also was briefed on efforts to modernize the chartering process for federal credit unions. League President Carrie Hunt attended the meeting in person.

Proposed Changes to MDI Preservation Program IRPS Approved by Board

The NCUA Board unanimously supported a proposal on the agency’s Minority Depository Institution Preservation Program. The proposal would amend Interpretive Ruling and Policy Statement 13-1, approved on June 18, 2015, to reflect the transfer of the MDI preservation program administration from the agency’s Office of Minority and Women Inclusion to its Office of Credit Union Resources and Expansion, update the program’s features, and clarify the requirements for a credit union to receive and maintain an MDI designation.

Proposed amendments to the interpretive ruling and policy statement also include incorporating recent program initiatives, providing examples of technical assistance an MDI may receive, establishing a new standard for MDIs to assess their designation periodically, and updating how the NCUA will review an MDI’s designation status, among other changes.

“The Board noted that it is changing how it looks at MDIs. It is comparing MDI performance to other MDI credit unions rather than the total credit union population to achieve exam benchmarks. The League will provide our comments on how we believe NCUA can continue to support MDIs and the work that they do,” noted League President Carrie Hunt.

NCUA Requests Stakeholder Comments on Operating Fee Schedule Methodology

The NCUA Board unanimously approved the issuance of a notice and request for comment about adjustments to the methodology the Office of the Chief Financial Officer uses to determine how it apportions operating fees charged to federal credit unions. The Board uses these operating fees to fund part of the NCUA’s annual budget.

In the notice and request for comment, the Board proposes to increase the threshold below which federal credit unions are exempt from paying an operating fee from $1 million to $2 million and establish a process to update the exemption threshold in future years based on the credit union system’s annual asset growth. The request for comment also seeks views about whether and how the Board should modify the current three-tier operating fee schedule.

“Chairman Harper in particular is interested in getting feedback on whether operating fees should be regressive," noted Hunt. "We look forward to providing our comments on this matter.”

Comments are due 60 days after publication of the notice in the Federal Register.

Board Briefed on New Charter Modernization Efforts

The NCUA’s Office of Credit Union Resources and Expansion briefed the Board on the agency’s efforts to modernize the charter process. The briefing described the three phases of chartering and reviewed goals for the completion of each stage. Staff also discussed improvements the NCUA has made to its operations, including updates to the new chartering webpage and new templates and forms to help groups seeking to organize new credit unions.

As a result of these improvements, the time to review and approve a completed application has been reduced to approximately 130 days from start to finish. As such, the number of new charters increased from just one in 2020 to four each in 2021 and 2022.

In addition, staff outlined NCUA’s new charter management system and the provisional charter program the agency is piloting. Information on starting a new federal credit union and the chartering process is available on the NCUA’s website.

CDRLF Applications Must Be Filed by June 30

The agency also flagged that credit unions can still apply for assistance grants for one more week. Credit unions eligible for Community Development Revolving Loan Fund grants in 2023 must apply by June 30.

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