Johnson's First NCUA Board Meeting as Chairman Runs Smoothly, Nothing Controversial

ALEXANDRIA, Va. – With just two non-controversial items on the agenda, NCUA Chairman JoAnn Johnson’s first board meeting in that position went off without a hitch despite the fact that Johnson and other remaining board member Debbie Matz are from opposite political parties. The first item on the agenda was a notice of a proposed rulemaking to permit federal credit unions to serve as trustees or custodians for Health Savings Accounts, which the Medicare Prescription Drug Improvement and Modernization Act of 2003 provides for. The agency has proposed to amend part 724 of its regulations to make room for these new types of accounts. NCUA has also proposed the incidental powers rule be amended to include Health Savings Accounts in the list of preapproved activities for federal credit unions to serve as trustees or custodians. The agency does not expect to create a new category of insurance coverage for health savings accounts, which is in line with the Federal Deposit Insurance Corporation’s plans. Though the Internal Revenue Service has not completed its guidelines yet, NCUA’s Board Action Memorandum read, “NCUA anticipates that HSA trustees and custodians will be required to provide initial disclosures and monitor deposits mad to the account to assure they do not exceed permissible annual contributions limitations and we expect the guidelines will also require certain reporting to the IRS and to the account owner.” The board issued the proposal for a 30 day comment period in an unanimous vote. The NCUA Board also considered a notice of proposed rulemaking on disposal of consumer information to bring the rules in line with the Fair and Accurate Credit Transactions Act. The proposal requires federal credit unions to develop, implement, and maintain appropriate measures to properly dispose of consumer information taken from credit reports consistent with NCUA’s Guidelines for Safeguarding Member Information. The agency has consulted with the other federal financial services regulators and issued the rule with a 45-day comment period. The NCUA attorney making the presentation to the board, Chrisanthy Loizos, pointed out that even though this rule only applies to federal credit unions and that federally insured state charters are under the authority of the Federal Trade Commission, they too could be benefited by following this rule when it becomes final. “This should not create a huge burden on credit unions,” Chairman Johnson noted. NCUA Board Member Debbie Matz added, “This is a natural extension of the responsibility credit unions have to safeguard their members information.” Under the proposal, federal credit unions would have three months to come into compliance after the final rule is approved. A final rule is required by Dec. 4, 2004. The proposal was issued for a 45-day comment period by a 2-0 vote. -