On 11/12/2020, the NCUA issued a final rule to amend the NCUA’s corporate credit union regulation. As explained in the Federal Register, the final rule updates, clarifies, and simplifies several provisions of the NCUA's corporate credit union regulation, including: Permitting a corporate credit union to make a minimal investment in a credit union service organization (CUSO) without the CUSO being classified as a corporate CUSO under the NCUA's rules; expanding the categories of senior staff positions at member credit unions eligible to serve on a corporate credit union's board; and amending the minimum experience and independence requirement for a corporate credit union's enterprise risk management expert.
Regarding the categories of senior staff positions as member credit unions eligible to serve on the board, the final rule changes language from listing specific positions that can sit on the board to using a more generic term of “senior staff position.” While the previously identified titles of CEO, CFO, COO and Treasurer/Manager are still provided as examples of senior staff positions, two additional titles have been added as examples: chief information officer (CIO) and chief risk officer (CRO).
Current rules for corporate credit unions include several specific requirements regarding an independent risk management expert, who is required to be part of the organizations enterprise risk management committee (ERMC). Prior rules required that the risk management expert must have at least five years of experience in identifying, assessing, and managing risk exposures and that this experience must be commensurate with the size of the corporate credit union and the complexity of its operations. The new final rule removes the experience requirements and also removes a prior independence requirement. The NCUA justifies these changes by saying that they believe corporate credit unions are in the best position to determine the appropriate level of experience necessary for an independent risk management expert and that the risk management expert may report directly to the ERMC or the corporate credit union's board.
This rule becomes effective on December 14, 2020.
The final rule can be found in the Federal Register here.