Section 1- Overview of NCUA's Regulations

Question 1

What are the three parts to the Federal Credit Union Act?

Answer 1

1. General Provisions
2. Share Insurance
3. Central Liquidity Facility

Question 2

NCUA’s authority to establish regulations is established by what?

Answer 2

The Federal Credit Union Act (FCU Act)

Question 3

How many members are on the NCUA Board?

Answer 3

Three

Question 4

Who nominates the NCUA Board members?

Answer 4

The President, and is confirmed by the US Senate

Question 5

How long is the term of an NCUA Board member?

Answer 5

Six years

Question 6

The three conditions in which the Central Liquidity Facility (CLF) can lend money to Credit Unions?

Answer 6

1. Short term adjustment credit
2. Seasonal credit
3. Protracted adjustment credit

Question 7

What is short term credit under the CLF?

Answer 7

To assist in meeting temporary requirements for
funds.

Question 8

What is seasonal credit under the CLF?

Answer 8

To assist in meeting seasonal needs for funds arising from expected patterns of movement in deposits and loans.

Question 9

What is protracted adjustment credit under the CLF?

Answer 9

For unusual or emergency circumstances
of a longer-term nature resulting from national, regional, or local difficulties.

Question 10

Under the Federal Credit Union Act, federal credit unions are subject to what kinds of federal, state, or local taxes?

Answer 10

Real property or personal property taxes that are imposed on other businesses.

Question 11

What taxes are federal credit unions exempt from?

Answer 11

Federal and state income taxes.

Question 12

Because state-chartered credit unions are not “federal instrumentalities”, what tax are they subject to that federally insured credit unions aren’t?

Answer 12

Unrelated business income taxes (UBIT)

Question 13

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.

Answer 13

Letters to Credit Unions

Question 14

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.

Answer 14

Interpretive Rulings and Policy Statements (IRPS)

Question 15

NCUA directives that govern a particular topic and have a substantial impact on credit union operations

Answer 15

NCUA Rules and Regulations

Question 16

Advises federally insured credit unions about regulatory changes affecting their compliance requirements.

Answer 16

Regulatory Alerts

Question 17

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.

Answer 17

Legal Opinion Letters

Question 18

Issued after an official notice and comment period of 30-120 days giving credit unions at least 30 days before compliance is mandatory.

Answer 18

Final Regulation

Question 19

Issued immediately because of a pressing agency concern such as a safety or soundness problem or the enactment of a new law.

Answer 19

Interim final regulation

Question 20

If a state chartered CU has federal share insurance, NCUA has the right to examine the CU, but usually relies on the state regulator to do the examination? True or False

Answer 20

True

Question 21

What is the report required by the NCUA that all federally insured CUs submit a summary of their financial and statistical data quarterly. (The Financial and Statistical Report)

Answer 21

Call Report

Question 22

A report drawn from the call report data providing CUs a five-year review of the data and showing how the CUs peers are performing.

Answer 22

Financial Performance Report

Question 23

Agreements between the credit union and the regulator that require the credit union to take specific corrective action

Answer 23

Letters of Understanding and Agreement

Question 24

Prohibits a credit union from engaging in activity described in the order and/or requires the correction of a condition resulting from a violation.

Answer 24

Cease and Desist Orders

Question 25

An order to remove a CU board member or employee after a notice and hearing and an order to ban CU officials and employees as well as affiliated parties from serving or being employed by any federally insured FI.

Answer 25

Removal and Prohibition Orders

Question 26

A three-tier penalty program against federally insured credit unions or institution-affiliated party ranging from $5,000 to $1million a day.

Answer 26

Civil Money Penalties

Question 27

The NCUA Board takes immediate control of a Federally insured CU with no notice or hearing required.

Answer 27

Conservatorship

Question 28

When NCUA Board requires an FCU or FISCU to maintain special reserves to protect the interests of the members.

Answer 28

Order for Special Reserves

Question 29

Applies only to FISCUs and could mean the involuntary liquidation of the CU

Answer 29

Termination of insurance

Question 30

The authority to close an insolvent federal credit union, eliminating that credit union as a legal entity.

Answer 30

Involuntary Liquidation