ALEXANDRIA, Va.—NCUA has issued its annual letter to credit unions listing its 2020 supervisory priorities, as well as the 2020 operating fee schedule.
The agency said a chief priority this year will be compliance with the Bank Secrecy Act (BSA), with examiners paying close attention to customer due diligence (CDD) and beneficial ownership requirements.
“This is going to be an exciting and productive year for the NCUA,” Chairman Rodney E. Hood said. “We made important strides in 2019 towards updating regulations, easing burdens on credit unions, as well as modernizing our examination process. These efforts will continue in the new year.
“Credit unions and their members can be assured the NCUA’s commitment to safety and soundness and to protecting the Share Insurance Fund is the foundation for everything we do,” Hood continued. “By providing a modern regulatory system and supervision framework that is effective without being excessive, we will maintain a strong credit union system that promotes innovation, inclusion, and member services.”
The 2020 Priorities
NCUA said its 2020 supervisory priorities are:
- Bank Secrecy Act and anti-money-laundering compliance
- Consumer financial protection
- Cybersecurity
- Credit risk and liquidity risk
- Continue monitoring the implementation of the new standard for current expected credit losses, or CECL
- Planning for the transition from the London Interbank Offered Rate, or LIBOR, as the benchmark for setting interest rates
The letter also describes the NCUA’s modernization efforts, including the planned general release of NCUA Connect, the agency’s new user portal, and MERIT, the new examination platform. Finally, the letter summarizes statutory and regulatory updates, including additional guidance on serving legal hemp businesses; changes in the appraisal threshold for commercial real estate transactions; the amended supervisory committee audits rule, which took effect Jan. 6; and the amended public unit and nonmember shares rule, which takes effect Jan. 29.
The full letter is available in the Letters to Credit Unions and Other Guidance section of NCUA.gov.
2020 Operating Fee
Separately, NCUA in a letter to credit unions announced the operating fee schedule for 2020. The fee scale has been raised 1.13% due to the Overhead Transfer Rate (OTR) level and changes in the agency’s capital investment program.
The fee scale applies to consumer-based federal credit unions, but those with less than $1 million in assets remain exempt from the fees. Federal credit unions with assets totaling more than $1 million can expect to receive the invoice for their respective operating fee in March and payments are due to the NCUA Wednesday, April 15, the agency said.
The agency said it uses the OTR to determine how much of the NCUA's operating budget is funded by the National Credit Union Share Insurance Fund (NCUSIF). If the OTR decreases, the operating fee collected increases. For 2020, the OTR increased from 60.5% to 61.3%, decreasing the operating fee. However, increased cash needs for capital investments planned for 2020 and the increased budget level resulted in increases to the operating fee, NAFCU noted.
In December, the NCUA board approved the agency's 2020 and 2021 budgets, which estimate $316.2 million and $325.9 million in spending, respectively. The agency's 2020 operating budget represents a 57% increase in the NCUA's budget over the past decade, while the industry has seen a 32% reduction over the same period.