New opportunity to weigh in on simplifying share insurance and succession planning rules

Responding to an Executive Order, the NCUA issued a request for comment to reevaluate two final rules that are not currently in effect:  

• A rule requiring credit unions to establish and adhere to processes for succession planning; and  
• A rule simplifying share insurance regulations by establishing a “trust accounts” category, to provide for coverage for funds in both revocable and irrevocable trusts.

Comments on both are due to the agency June 23. America’s Credit Unions will reissue Regulatory Comments to seek feedback on the final rules.

America’s Credit Unions was supportive of the share insurance simplifications, which would also provide consistent share insurance treatment for all mortgage-servicing account balances held to satisfy principal/interest obligations to a lender. The changes also increase flexibility for NCUA to consider various records in determining share insurance coverage in liquidations.

However, there are serious concerns with the succession planning rule, with many acknowledged in the final rule. It still requires the succession plan to address a federally insured credit union’s strategy for recruiting candidates with the potential to assume certain covered positions.  America’s Credit Unions previously outlined several recommendations as the rulemaking proceeds, noting the agency should:

• Clarify what steps a board of directors would be expected to take to achieve a “working familiarity” with a credit union’s succession plan;
• Be clear about the potential impact on a credit union if an examiner determines a credit union’s succession plan to be inadequate;
• Ensure confidentiality of a credit union’s succession plan; and
• Provide clarity on the steps a credit union should take if it is unable to adhere to its succession plan.