Credit unions may see a final rule approved next week that would remove the need to obtain real estate appraisals for certain commercial real estate loans under $1 million.
The National Credit Union Administration (NCUA) Board has a final rule on real estate appraisals on its agenda for its July 18 open meeting, along with a final rule on fidelity bonds, a proposed interpretative rule on certain prohibitions, and a mid-year review and possible reprogramming of the agency’s 2019 operating budget.
Last year, the agency board issued a proposal that would raise from $250,000 to $1 million the transaction amount threshold below which appraisals would not be required for non-residential real estate transactions. It also proposed to exempt from the NCUA’s appraisal regulation certain federally related transactions involving real estate where the property is located in a rural area, valued below $400,000, and no state certified or licensed appraiser is available (in keeping with the Economic Growth, Regulatory Relief, and Consumer Protection Act [EGRRCPA, S. 2155]).
The board issued proposed changes on fidelity bonds that would, in part, codify a 2017 NCUA Office of General Counsel legal opinion that permits a natural person credit union’s fidelity bond to include coverage for certain credit union service organizations (CUSOs). The proposed rule was issued to update and clarify NCUA’s requirements for fidelity bond coverages at corporate and natural-person credit unions.
The July 18 open meeting begins at 10 a.m. ET; a closed meeting follows.