Section 1- Overview of NCUA's Regulations Flashcards
What are the three parts to the Federal Credit Union Act?
- General Provisions
- Share Insurance
- Central Liquidity Facility
NCUA’s authority to establish regulations is established by what?
The Federal Credit Union Act (FCU Act)
How many members are on the NCUA Board?
Three
Who nominates the NCUA Board members?
The President, and is confirmed by the US Senate
How long is the term of an NCUA Board member?
Six years
The three conditions in which the Central Liquidity Facility (CLF) can lend money to Credit Unions?
- Short term adjustment credit
- Seasonal credit
- Protracted adjustment credit
What is short term credit under the CLF?
To assist in meeting temporary requirements for
funds.
What is seasonal credit under the CLF?
To assist in meeting seasonal needs for funds arising from expected patterns of movement in deposits and loans.
What is protracted adjustment credit under the CLF?
For unusual or emergency circumstances
of a longer-term nature resulting from national, regional, or local difficulties.
Under the Federal Credit Union Act, federal credit unions are subject to what kinds of federal, state, or local taxes?
Real property or personal property taxes that are imposed on other businesses.
What taxes are federal credit unions exempt from?
Federal and state income taxes.
Because state-chartered credit unions are not “federal instrumentalities”, what tax are they subject to that federally insured credit unions aren’t?
Unrelated business income taxes (UBIT)
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.
Letters to Credit Unions
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.
Interpretive Rulings and Policy Statements (IRPS)
NCUA directives that govern a particular topic and have a substantial impact on credit union operations
NCUA Rules and Regulations
Advises federally insured credit unions about regulatory changes affecting their compliance requirements.
Regulatory Alerts
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.
Legal Opinion Letters
Issued after an official notice and comment period of 30-120 days giving credit unions at least 30 days before compliance is mandatory.
Final Regulation
Issued immediately because of a pressing agency concern such as a safety or soundness problem or the enactment of a new law.
Interim final regulation
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
True
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)
Call Report
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.
Financial Performance Report
Agreements between the credit union and the regulator that require the credit union to take specific corrective action
Letters of Understanding and Agreement
Prohibits a credit union from engaging in activity described in the order and/or requires the correction of a condition resulting from a violation.
Cease and Desist Orders
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.
Removal and Prohibition Orders
A three-tier penalty program against federally insured credit unions or institution-affiliated party ranging from $5,000 to $1million a day.
Civil Money Penalties
The NCUA Board takes immediate control of a Federally insured CU with no notice or hearing required.
Conservatorship
When NCUA Board requires an FCU or FISCU to maintain special reserves to protect the interests of the members.
Order for Special Reserves
Applies only to FISCUs and could mean the involuntary liquidation of the CU
Termination of insurance
The authority to close an insolvent federal credit union, eliminating that credit union as a legal entity.
Involuntary Liquidation
