Typically, by this time of year, about six “letters to credit unions” (LTCUs) – which detail or outline issues deemed of special importance – would have been issued by the federal regulator of credit unions to those institutions that are included under its supervisory umbrella (about 5,500 federally insured credit unions).
So far this year, not a single LTCU (that is, to all federally insured credit unions) has been issued.
According to a tally of LTCUs over the last 10 years, the National Credit Union Administration (NCUA) issued 161 LTCUs during the period 2008-17. About half of that total (77 letters) came during the three-year period 2008-10, when the financial crisis was peaking and the agency was taking follow up efforts to resolve problems at credit unions affected by the crisis.
In the years following the crisis, 2011-17, the agency ramped back its communications to credit unions, issuing 84 LTCUs over the seven-year period. More than half of the letters issued in those years were sent in the first seven months.
But 2018 has been markedly different from past years, without a single LTCU issued. The last letter sent to credit unions was in December 2017, outlining the agency’s “supervisory priorities” for the following year.
According to NCUA’s website, LTCUs are intended to “provide guidance on specific NCUA policies and procedures, compliance requirements and other timely issues that affect all federally insured credit unions.”
In contrast to the credit union regulator, the Federal Deposit Insurance Corp. (FDIC) in 2018 has issued 40 “financial institution letters” (FILs) dealing with a variety of topics, including: disaster relief, statement on the implementation of regulatory relief legislation enacted in May (the Economic Growth, Regulatory Relief, and Consumer Protection Act, or EGRRCPA); Volcker Rule changes; exam procedures under the Bank Secrecy Act; due dates for consolidated reports of condition and income; and, among other topics, new accounting and reporting implications under the new tax law. Nine FILs were issued in April alone.
In past years, NCUA has also issued letters on similar topics as those covered this year by the FDIC in its FILs. For example, in 2017, the agency issued an LTCU on “FFIEC Uniform HMDA Resubmission Guidelines”; a similar FIL was issued by the FDIC to member banks last year as well.
In 2018, however, the credit union agency has chosen to rely more on press releases rather than the LTCU communication. In May, the agency issued a press release on the Federal Financial Institution Examination Council’s (FFIEC) new “Customer Due Diligence and Beneficial Ownership Examination Procedures.” By contrast, the FDIC issued an FIL (FIL-26-2018).
With a new month beginning Wednesday, the agency enters its eighth month without issuing a direct communication to credit unions via an LTCU. August, in the past, has been a slower month for issuing the letters – but LTCUs have been issued during the month. Between 2008-17, the agency issued 16 letters (nine during the financial crisis period) during August.
NCUA did issue a “letter to federal credit unions” at the beginning of the year to the nearly 3,500 federally chartered credit unions (FCUs). That “LTFCU” covered adjustments to the “operating fees” that the federal credit unions pay to cover expenses of the agency. The letter, however, only went to FCUs and not the broader based of federally insured credit unions.