NCUA Shifting toward E-Communications with CUs; MBL Rule Being Carefully Considered

BOSTON-NCUA Vice Chair JoAnn Johnson announced a new cost-saving measure at NCUA at NAFCU’s 36th Annual Conference. She noted that NCUA currently spends about $1 million a year distributing information to credit unions. If just 50% agreed to receive those communications electronically, the agency’s savings would be substantial, Johnson observed. Not only would the agency avoiding printing and postage costs, but also the time it takes for the mail to be delivered. “Our senior staff is currently working on a proposal that will give credit unions the option of receiving most NCUA correspondence electronically,” Johnson said. Under the proposal, the vice chair explained, credit unions would be given a PIN to access the e-mail system. Then the e-mail addresses of the credit union’s appropriate staff can be entered to receive agency correspondence. Another advantage of this method is that the credit unions can easily keep its e-mail list up-to-date. Johnson also spoke about NCUA’s activities over the last year since NAFCU’s last Annual Conference, such as updates to the corporate credit union rule, prompt corrective action, fields of membership, and investment rule. She also noted the agency’s efforts in the ongoing battle to update the member business lending rule. “Credit unions are the perfect ally for assisting small businesses with their credit needs and deposit services,” Johnson said. “With a focus on members’ small business lending, credit unions can play a pivotal role in sustaining economic growth in America.” She pointed out that by year-end 2002, there were 39 more credit unions participating in Small Business Administration-backed loan programs. “What a tremendous opportunity to serve your members while at the same time not having to utilize your member business lending limitations on the government guaranteed portion of the loan,” Johnson said. “As a matter of fact there is more room for collaboration to occur. As of year-end, only 16% of all credit unions were engaged in member business lending.” She also provided the credit union community’s first glimpse into the final rule when she said, “In response to the comments we have received, we are considering whether there is a way to strike a balance whereby credit unions will be able to place excess funds in good, solid loans offered by credit unions while alleviating the concern that credit unions will swap loans to avoid the cap.” NCUA’s proposal would exclude the purchase of business loan participations from the purchasing credit union’s aggregate member business loan limit. Aside from the bankers, the Treasury Department also raised this concern. -