Berger Calls on NCUA Board to Finalize Contentious Rules

National Association of Federally-Insured Credit Union President/CEO B. Dan Berger on Tuesday asked the National Credit Union Administration board to finalize several proposed rules even though board Chairman Todd Harper has made it clear he opposes them.

“NAFCU applauds the NCUA in its efforts to provide COVID-19 relief to credit unions, but it has been more than a year since the COVID-19 pandemic began, and some critical relief measures have yet to be finalized,” Berger wrote, in a letter to the board.

The backlog—at least in part—appears to stem from efforts by Republicans on the board to pass proposed rules before President Biden was sworn in and Harper assumed chairmanship of the board.

During the board’s April meeting, board member Rodney Hood, who chaired the board when President Trump was in office, asked Harper to work on rules that have yet to be finalized. Harper said that he would try to work with Republican members on a bipartisan basis to resolve any conflicts over the proposals.

However, none of the issues are scheduled to be addressed when the NCUA board meets on Thursday. Harper, as chairman, generally controls the meeting agenda, although the two Republicans on the board can, with proper notice, add subjects.

Some of the issues that Berger cited have been particularly contentious.

For instance, he asked the board to finalize a proposed rule on overdrafts.

In December, the board approved a proposed rule to require credit unions to establish specific time limits for members to either deposit funds or obtain a loan to cover each overdraft. Currently, the NCUA rules prescribe a 45-day time limit for members to solve overdraft problems. Harper opposed the rule, saying that particularly during the pandemic, credit unions needed more assistance with overdraft problems.

In his letter to the board, Berger said, “No consumer protection argument in support of a 45-day timeframe, as opposed to a 60-day or 90-day timeframe, has been raised and indeed there are no policy reasons for maintaining this shorter timeframe.”

Berger also called on the board to finalize a proposed expansion of its field of membership rule.

In December, Republicans on the board approved a proposed rule that would include any shared branch, shared ATM, or shared electronic facility in the definition of “service facility” for a Multiple Common Bond federal credit union that participates in a shared branching network. The proposal also includes a question of whether the definition of “shared facility” should be changed to include a federal credit union’s website or mobile banking application.

Harper questioned the legality of that proposal. “I do not find that a leased ATM, among other proposed structures, creates a sufficient field of membership nexus under the Federal Credit Union Act,” he said at the time.

Berger said the rule is needed. “As the economic effects of the pandemic endure and the credit union industry continues to experience growing consolidation, credit unions need the tools and mechanism to reach new consumers who are not currently being served,” he wrote.

Berger also asked the board to address the issue of risk-based capital again.

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