Recent Comment Call & Final Rules

CUNA
August 27, 2007 | COMMENTS

NCUA Seeks Comments in Permissible Foreign Currency Investments

The NCUA Board issued an Advanced Notice of Proposed Rulemaking on amending its investment rules to permit natural person federal credit unions (FCUs) and corporate credit unions (corporates) to make certain investments denominated in foreign currency.

The Board is considering whether to permit FCUs and corporates to invest foreign currency in deposits and instruments issued by federally insured banks, corporates, and government-sponsored enterprises (GSEs) domiciled in the U.S. or its territories.

Credit unions would have to establish an appropriate process to measure, monitor and control foreign exchange risk with these investments.

NCUA is considering establishing a maximum limit on the out-of-balance amount when assets and liabilities denominated in a particular foreign currency are not in balance.

Credit unions would be required to manage other risks these investments pose, such as credit risk, interest rate risk, liquidity risk, transaction risk, compliance risk, strategic risk, and reputation risk.

NCUA is also considering requiring credit unions to develop an exit strategy to facilitate divestiture of all investments in a particular currency.

Additional reporting would be required to adequately monitor foreign currency exposure.

The need to establish certain internal controls, policies, and procedures would likely be addressed to manage these investments.

It is likely that there would be an approval process for an FCU or corporate to engage in foreign currency denominated investments and deposits.

You may access a copy of NCUA's proposed rule here. http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-14849.pdf

Comments are due to NCUA by October 30, 2007. Please submit your comments to CUNA by October 19, 2007. Please feel free to fax your responses to CUNA at 202-638-7052 or e-mail them to CUNA Deputy General Counsel Mary Dunn at mdunn@cuna.com. You may also contact her at 800-356-9655, ext. 6736.

To read more about this comment call, please visit: http://www.cuna.org/regadvocacy/regcall/rcc_080107.html

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Fed Adjusts the Amount of Mortgage Fees that Trigger Additional Disclosures Under Truth in Lending

•  The Federal Reserve Board (Fed) has announced its annual adjustment of the dollar amount of points and fees that trigger additional disclosures and prohibitions under the Truth in Lending Act (TILA) for certain mortgage loans.

•  The dollar amount will be adjusted from $547 for 2007 to $561 for 2008, which is based on the Consumer Price Index.

•  This adjustment will be effective as of January 1, 2008.

•  These adjustments are required under the Home Ownership and Equity Protection Act of 1994, and the disclosures and prohibitions will now apply when total points and fees on a loan exceed $561 or 8 percent of the loan amount, whichever is greater.

If you have questions about this announcement, please feel free to contact Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.coop or by telephone at (800) 356-9655, extension 6736, or contact Senior Assistant General Counsel Jeffrey Bloch at jbloch@cuna.coop or by telephone at (800) 356-9655, extension 6732. If you would like a copy of the Fed's announcement, contact Jeff by e-mail or by telephone. You may also obtain a copy on the Internet at the following address:

http://www.federalreserve.gov/boarddocs/press/bcreg/2007/20070801/attachment.pdf

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FEMA Fee Schedules

•  The Federal Emergency Management Agency (FEMA) has issued a revised fee schedule for National Flood Insurance Program maps and insurance products.

•  The fee schedule is effective for all requests that are dated on or after October 1, 2007.

•  The revisions to the fee schedule are intended to more fully recover the costs associated with providing these products.

If you have questions about the fee schedule, please contact Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.coop or by telephone at (800) 356-9655, extension 6736, or contact Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.coop or by telephone at (800) 356-9655, extension 6732. If you would like a copy of the fee schedule, contact Jeff by e-mail or by telephone. You may also obtain a copy on the Internet at the following address:

http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-14712.pdf