NCUA Reg Agenda: Bank Purchases, Overdrafts

During the next six months the National Credit Union Administration board may issue final rules governing overdrafts and the purchase of a bank by a credit union, the agency said in its Fall regulatory agenda, released late last week.

Federal Executive agencies and many independent agencies released their agendas late last week as part of the Unified Agenda of Regulatory and Deregulatory Actions.

In its list of possible rules, the NCUA noted that it has issued a proposed rule governing bank purchases and that the comment period on the proposal closed on June 15, 2020.

The board also said that the comment period on a proposed overdraft rule has closed. That proposed rule allowed credit unions to establish a specific time limit for a member to settle an overdraft that is reasonable and applicable to all members. The current rule calls for a 45-day calendar-day time limit.

Several banks and credit unions have decided to eliminate the fees that they charge for overdrafts. Consumer Financial Protection Bureau Director Rohit Chopra said his agency will be closely examining overdraft programs. NCUA Chairman Todd Harper has questioned overdraft programs that simply lock members in a cycle of debt.

In its regulatory agenda, the NCUA also said it may attempt to modernize the agency’s investment rule, saying that current rules may be overly restrictive and unnecessary. A revised rule could provide federal credit unions with more flexible investment options.

The agency also is considering whether to revise its regulation prohibiting federal credit unions from making golden parachute and indemnification payments to an institution-affiliated party under certain circumstances. The proposed rule could, among other things, include a section on merger-related financial arrangements, according to the NCUA.


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