NCUA Requirements - 1 - NCUA’s Regulations and Supervisory Authority Flashcards
The Central Liquidity Facility was established to address the economic conditions of the 1970s and to lend money to credit unions under certain circumstances. What are the three circumstances listed in this book?
Short-term adjustment credit to help meet temporary requirements for funds; seasonal credit to help meet seasonal needs for funds; and protracted adjustment credit to help meet needs in unusual or emergency circumstances of longer-term nature. (Page 1-8)
Federal credit unions are subject to what kinds of federal, state, or local taxes under the Federal Credit Union Act?
FCUs are exempt from federal and state income taxes and franchise taxes but are subject to the same real property taxes and personal property taxes that are imposed on other businesses. (Page 1-9)
Because state-chartered credit unions are not “federal instrumentalities” what tax are they subject to that federally chartered credit unions are not?
Unrelated business income taxes — UBIT (Page 1-10)
Documents that credit unions need to review in order to be in compliance with the agency’s requirements: NCUA Rules and Regulations
NCUA directives that govern a particular topic and have a substantial impact on credit union operations.
Documents that credit unions need to review in order to be in compliance with the agency’s requirements: Interpretive Rulings and Policy Statements
provide NCUA interpretations on what a law means on a particular subject generally requiring credit unions to comply and follow the guidance provided in them.
Documents that credit unions need to review in order to be in compliance with the agency’s requirements: Letters to Credit Unions
issued by the NCUA board to provide clarifying information about a specific regulation, express concern about credit union compliance, issue warnings, or announce changes in accounting rules, operating fee assessments or examination procedures and generally sent to all federally
insured credit unions.
Documents that credit unions need to review in order to be in compliance with the agency’s requirements: Regulatory Alerts
advise federally insured credit unions about regulatory changes affecting their compliance requirements.
Documents that credit unions need to review in order to be in compliance with the agency’s requirements: Legal Opinion Letters
written responses to inquiries made to NCUA representing their legal staff’s interpretation of the law and regulations that are posted on the NCUA website but not sent directly to credit unions.
The Federal Credit Union Act gives the NCUA authority to issue regulations and other guidance to direct the operations of federal credit unions and federally insured state-chartered credit unions. What is the difference between a “final regulation” and an “interim final regulation”?
A final regulation is issued after an official “notice and comment period” of 30 days to 120 days giving credit unions at least 30 days before compliance is mandatory. An “interim final regulation” is issued because of a pressing agency concern such as a safety or soundness problem or the enactment of a new law. (Page 1-13)
If a state-chartered credit union has federal share insurance, NCUA has the right to examine the credit union, but in most cases the NCUA relies on the state regulator to actually do the examination. Yes or No
Yes. (Page 1-22)
What is the difference between a “call report” and a “financial performance report”?
Call reports — the Financial and Statistical Report — NCUA requires all federally insured credit unions to submit a summary of their financial and statistical data quarterly.
Financial Performance Report — a report drawn from the call report data providing credit unions a five-year review of the data and showing how the credit union’s peers are performing. (Page 1-22)
NCUA Tool: Letters of Understanding and Agreement
agreements between the credit union and the regulator that require the credit union to take specific corrective action. (Page 1-26)
NCUA Tool: Cease and Desist Orders
prohibits a credit union from engaging in an activity described in the order and/or requires the correction of a condition resulting from a violation. (Page 1-27)
NCUA Tool: Removal and Prohibition Orders
an order to remove a credit union board member or employee after a notice and hearing and an order to ban credit union officials and employees as well as affiliated parties from serving or being employed by any federally insured financial institution. (Page 1-28)
NCUA Tool: Civil Money Penalties
a three-tier penalty program against federally insured credit unions or institution-affiliated party ranging from $5,000 to $1 million a day. (Page 1-28)
