Credit unions’ federal regulator is proposing to remove the guidance portions of its regulation on record retention and castrophic act preparedness, clarify the regulation, and update its definitions, according to a Federal Register notice slated for publication Wednesday.
The proposal, which would revise 12 C.F.R. 749, constitutes the seventh round of the National Credit Union Administration (NCUA) Board’s deregulation project, the agency said.
The NCUA, in an announcement Tuesday, listed the following proposed changes:
- Remove of Appendix A, which provides guidance concerning the appropriate length of time credit unions should retain various types of operational records. The NCUA says removing it “will give credit union boards of directors more discretion and flexibility to determine the process for records destruction.”
- Remove of Appendix B, which provides guidance for developing a program for responding to a catastrophic act “to ensure duplicate vital records can be used for restoration of vital member services,” the current rule states. The NCUA says this “will provide clarity on what is required by regulation and what is meant to be guidance.”
- Define vital member services and vital records, currently only addressed in the rule by examples.
- Add the term “vital” to the regulation’s heading so that it will read “Vital Records Preservation Program.” The term “vital” would also be added to the regulation to further clarify the scope of part 749, which is vital records.
- Make clear that a records preservation log may be in electronic format. The agency said this will create more flexibility for credit unions to manage and store vital records.
- Permit destruction of older versions of records unless required by other law or regulation. The agency says this “will allow credit unions to get rid of and no longer be responsible for unnecessary records.”
- State clearly the NCUA’s expectation that, if a credit union contracts with a third-party service provider to maintain its vital records, the credit union must maintain effective oversight of the third-party service provider to ensure the credit union meets its obligations under part 749. “This change would provide clarity about the meaning of the regulation in a way that makes the regulation less burdensome for credit unions,” the agency said.
The NCUA will take public comments for 60 days following Federal Register publication, the notice says.
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