Supervisory Committee Audit Rule Changes Proposed

Board Action Bulletin

ALEXANDRIA, Va. (Feb. 14, 2019) – The National Credit Union Administration Board held its second open meeting of 2019 at the agency’s headquarters today and unanimously approved one item:

• A proposed rule to clarify and provide additional flexibility in the agency’s regulation covering required credit union supervisory committee audits.

The Office of the General Counsel briefed the Board on a final interagency rule covering loans in special flood hazard areas.

Supervisory Committee Audit Changes Will Simplify Compliance

The NCUA Board approved a proposed rule amending the supervisory committee audit regulation for federally insured credit unions.

Comments on the rule must be received within 60 days of publication in the Federal Register.

The rule makes two major changes:

• Replaces the current optional audit procedure described in the Supervisory Committee Guide with a targeted list of minimum procedures contained in a new Appendix A.
• Eliminates the current 120-day time limit for receiving a third-party audit report and gives credit unions the ability to negotiate a delivery date.

The proposed rule implements recommendations contained in the agency’s Regulatory Reform Task Force’s reform agenda.

Rule Requires Credit Unions to Accept Certain Private Flood Insurance Policies

The Board approved, by notation vote on Jan. 31, a final interagency rule requiring federally insured credit unions to accept certain private flood insurance policies in addition to National Flood Insurance Program policies.

Federal flood insurance statutes require regulated lending institutions, including federally insured credit unions, to ensure the purchase of flood insurance for loans secured by improved real property located in areas having special flood hazards.

Five federal agencies, including the NCUA, issued the rule, which will take effect July 1. The rule requires federally insured credit unions to accept private flood insurance policies meeting statutory requirements and allows federally insured credit unions, under certain restrictions, to accept policies that do not meet these requirements.

The NCUA tweets all open Board meetings live. Follow @TheNCUA on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.