Four actions – including on appraisals, response to coronavirus crisis – on federal credit union regulator’s meeting agenda for April 16

Rules related to regulatory relief in response to the coronavirus crisis, as well as those implementing legislative changes related to the agency’s liquidity facility for credit unions, are on the agenda for the board of the federal credit union regulator at its meeting April 16 in Alexandria, Va.

The board will also consider at the meeting – which will be streamed live via the Internet, but will not be open to an in-person public audience – rules related to real estate appraisals for both regulatory relief and threshold levels.

The meeting is set to begin at 10 a.m. ET.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which became law March 27, contains at least four provisions affecting the Central Liquidity Facility (CLF) of the agency. Those provisions:

  • Remove the “primarily serving natural persons” reference under the Federal Credit Union (FCU) Act’s definition of “liquidity needs” to permit temporary access for corporate credit unions in addition to natural-person credit unions.
  • Amend the act’s membership provision for the CLF to provide greater flexibility to corporate credit unions serving as agent members with respect to the amount they must pay to subscribe to the capital stock of the CLF.
  • Alter the FCU Act provision regarding member applications for extensions of credit by removing the reference to the NCUA Board disapproving applications that are filed with the intent to expand credit union portfolios. “Instead, under the CARES Act, the applicant must provide evidence to the Board that they have made reasonable efforts to first use primary sources of liquidity, including balance sheet and market funding sources, to address its liquidity needs,” the agency said.
  • Temporarily increase (to 16 times, up from 12 times, the subscribed capital stock and surplus of the CLF) the NCUA’s borrowing authority on behalf of the facility. “Together, these amendments enhance the CLF’s ability to serve as an effective liquidity provider to credit unions,” the agency said.

Regarding appraisals, in November the board proposed a rule that would increase the threshold level below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000. The agency said that, consistent with the requirement for other transactions that fall below applicable appraisal thresholds, federally insured credit unions (FICUs) would be required to obtain written estimates of market value of the real estate collateral, consistent with safe and sound banking practices in lieu of an appraisal. Comments closed on the proposal in late January.

Sunshine Act: Notice of NCUA Board Meeting (April 16)