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Compliance Update with Amy K By Amy Kleinschmit, Chief Compliance Officer Free NCUA Webinar - Tax Time Resources for Credit Unions and Consumers The NCUA and IRS will be co-hosting a free webinar on the Earned Income Tax Credit and Volunteer Income Tax Assistance (VITA) programs. The NCUA and the IRS encourage credit unions, their members, and others to participate in the webinar to learn more about the benefits of these tax programs. The presentation will include information on credit union Call Report data, Earned Income Tax Credit resources, and stakeholder partnerships. Both agencies will discuss their financial literacy efforts regarding the Earned Income Tax Credit and VITA, geared to low- and moderate-income families, and highlight the resources available to consumers at MyCreditUnion.gov and other websites. A Q&A segment will follow. Date: February 23 at 1:00 p.m. (CT). Register here. NCUA Final Rule – Joint Ownership Share Account The National Credit Union Administration (NCUA) approved a final rule at their recent board meeting relating to insurance requirements for joint ownership share accounts, which can be found here. This rule is effective 30 days after it is published in the Federal Register. Briefly, the final rule provides an alternative method to satisfy the membership card or account signature card requirement necessary for insurance coverage. However, this rule only relates to insurance coverage of joint accounts. Obtaining the member’s signature is needed beyond merely account insurance. As the NCUA stressed, “the Board strongly emphasizes that this final rule only affects a requirement in the NCUA’s regulations that must be satisfied for a share account to be separately insured as a joint account; it does not affect any other legal requirements applicable to FICUs. FICUs may, and likely will, for legal or other reasons, find it appropriate or necessary to continue collecting customers’ signatures.” The final rule amends § 745.8(c) Qualifying joint accounts and provides: “(1) A joint account is a qualifying joint account if each of the co-owners has personally signed a membership or account signature card and has a right of withdrawal on the same basis as the other co-owners. The signature requirement does not apply to share certificates, or to any accounts maintained by an agent, nominee, guardian, custodian or conservator on behalf of two or more persons if the records of the credit union properly reflect that the account is so maintained. (2) The signature card requirement of paragraph (c)(1) of this section also may be satisfied by information contained in the account records of the federally insured credit union establishing co-ownership of the share account, including, but not limited to, evidence that the institution has issued a mechanism for accessing the account to each co-owner or evidence of usage of the share account by each co-owner.” This final rule does not introduce any new requirements for an account to be insured as a joint account and would not reduce or affect insurance coverage for any account for which the existing joint account requirements are satisfied. Federal Reserve System Final Rule - Reg D The Federal Reserve Board (Board) adopted as a final rule its March 24, 2020, interim final rule. This final rule can be found here and is effective March 12, 2021. As you may recall, the Board issued an interim final rule in March of last year that amended Regulation D to lower all transaction account reserve requirement ratios to zero percent, thereby eliminating all reserve requirements. As explained by the Board, “In light of the shift to an ample reserves regime, the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.” Previously, the Board had also issued its final rule to amend Regulation D to reflect the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2021. The annual indexation of these amounts is required notwithstanding the Board’s action in March 2020 setting all reserve requirement ratios to zero. This final rule can be found here and was effective January 11, 2021. For 2021 the final rule assigned the reporting panels (weekly reporters, quarterly reporters, annual reporters, or nonreporters) as follows: “Those depository institutions with net transaction accounts over $21.1 million (the reserve requirement exemption amount) or with total transaction accounts, savings deposits, and small time deposits greater than or equal to $2.633 billion (the reduced reporting limit) are subject to detailed reporting, and must file a Report of Transaction Accounts, Other Deposits and Vault Cash (FR 2900 report) either weekly or quarterly. Of this group, those with total transaction accounts, savings deposits, and small time deposits greater than or equal to $1.262 billion (the nonexempt deposit cutoff level) are required to file the FR 2900 report each week, while those with total transaction accounts, savings deposits, and small time deposits less than $1.262 billion are required to file the FR 2900 report each quarter. Those depository institutions with net transaction accounts less than or equal to $21.1 million (the reserve requirement exemption amount) and with total transaction accounts, savings deposits, and small time deposits less than $2.633 billion (the reduced reporting limit) are eligible for reduced reporting, and must either file a deposit report annually or not at all. Of this group, those with total deposits greater than $21.1 million (but with total transaction accounts, savings deposits, and small time deposits less than $2.633 billion) are required to file the Annual Report of Deposits and Reservable Liabilities (FR 2910a) report annually, while those with total deposits less than or equal to $21.1 million are not required to file a deposit report. A depository institution that adjusts reported values on its FR 2910a report in order to qualify for reduced reporting will be shifted to an FR 2900 reporting panel.” InfoSight Highlight – FAQs InfoSight is a FREE resource included with your DakCU membership. Login today to take advantage of this fantastic resource! If you’re new to InfoSight, here are some frequently asked questions that can help you get started. Q: I don’t know if I have a login. What should I do? A: Visit the DakCU website to access InfoSight. Once you are on the login screen, click the “Forgotten Password” link. If you have a login, your information will be emailed to you. If you do not have a login, you can register for one on the login page. Q: What if my login is not working? A: If you are getting an “invalid login” message, try the “Forgotten Password” link – you would be surprised how many people forget their user name or password! If you are getting any other type of error message, or still cannot login, please take a screenshot of the onscreen message and email to info@leagueinfosight.com for assistance. Q: How do I customize the dashboard? A: There are two areas that can be customized on the InfoSight dashboard – the Topics of Interest and Recently Updated. To customize, click on the gear icon in the upper right corner of the orange header for each area. For Topics of Interest, choose up to seven channels and/or specific topics to create quick links to those you’ll be visiting most. Under Recently Update, choose from any (or all!) of the Channels or RISK Alerts and receive a news feed of updates for those items right on your dashboard. As always, DakCU members may contact Amy Kleinschmit with any compliance related questions at akleinschmit@dakcu.org or 701-250-3964.
Compliance Update with Amy K
By Amy Kleinschmit, Chief Compliance Officer
Free NCUA Webinar - Tax Time Resources for Credit Unions and Consumers
The NCUA and IRS will be co-hosting a free webinar on the Earned Income Tax Credit and Volunteer Income Tax Assistance (VITA) programs. The NCUA and the IRS encourage credit unions, their members, and others to participate in the webinar to learn more about the benefits of these tax programs. The presentation will include information on credit union Call Report data, Earned Income Tax Credit resources, and stakeholder partnerships. Both agencies will discuss their financial literacy efforts regarding the Earned Income Tax Credit and VITA, geared to low- and moderate-income families, and highlight the resources available to consumers at MyCreditUnion.gov and other websites. A Q&A segment will follow.
Date: February 23 at 1:00 p.m. (CT). Register here.
NCUA Final Rule – Joint Ownership Share Account
The National Credit Union Administration (NCUA) approved a final rule at their recent board meeting relating to insurance requirements for joint ownership share accounts, which can be found here. This rule is effective 30 days after it is published in the Federal Register.
Briefly, the final rule provides an alternative method to satisfy the membership card or account signature card requirement necessary for insurance coverage. However, this rule only relates to insurance coverage of joint accounts. Obtaining the member’s signature is needed beyond merely account insurance. As the NCUA stressed, “the Board strongly emphasizes that this final rule only affects a requirement in the NCUA’s regulations that must be satisfied for a share account to be separately insured as a joint account; it does not affect any other legal requirements applicable to FICUs. FICUs may, and likely will, for legal or other reasons, find it appropriate or necessary to continue collecting customers’ signatures.”
The final rule amends § 745.8(c) Qualifying joint accounts and provides: “(1) A joint account is a qualifying joint account if each of the co-owners has personally signed a membership or account signature card and has a right of withdrawal on the same basis as the other co-owners. The signature requirement does not apply to share certificates, or to any accounts maintained by an agent, nominee, guardian, custodian or conservator on behalf of two or more persons if the records of the credit union properly reflect that the account is so maintained. (2) The signature card requirement of paragraph (c)(1) of this section also may be satisfied by information contained in the account records of the federally insured credit union establishing co-ownership of the share account, including, but not limited to, evidence that the institution has issued a mechanism for accessing the account to each co-owner or evidence of usage of the share account by each co-owner.”
This final rule does not introduce any new requirements for an account to be insured as a joint account and would not reduce or affect insurance coverage for any account for which the existing joint account requirements are satisfied.
Federal Reserve System Final Rule - Reg D
The Federal Reserve Board (Board) adopted as a final rule its March 24, 2020, interim final rule. This final rule can be found here and is effective March 12, 2021. As you may recall, the Board issued an interim final rule in March of last year that amended Regulation D to lower all transaction account reserve requirement ratios to zero percent, thereby eliminating all reserve requirements.
As explained by the Board, “In light of the shift to an ample reserves regime, the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.”
Previously, the Board had also issued its final rule to amend Regulation D to reflect the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2021. The annual indexation of these amounts is required notwithstanding the Board’s action in March 2020 setting all reserve requirement ratios to zero. This final rule can be found here and was effective January 11, 2021.
For 2021 the final rule assigned the reporting panels (weekly reporters, quarterly reporters, annual reporters, or nonreporters) as follows:
“Those depository institutions with net transaction accounts over $21.1 million (the reserve requirement exemption amount) or with total transaction accounts, savings deposits, and small time deposits greater than or equal to $2.633 billion (the reduced reporting limit) are subject to detailed reporting, and must file a Report of Transaction Accounts, Other Deposits and Vault Cash (FR 2900 report) either weekly or quarterly. Of this group, those with total transaction accounts, savings deposits, and small time deposits greater than or equal to $1.262 billion (the nonexempt deposit cutoff level) are required to file the FR 2900 report each week, while those with total transaction accounts, savings deposits, and small time deposits less than $1.262 billion are required to file the FR 2900 report each quarter.
Those depository institutions with net transaction accounts less than or equal to $21.1 million (the reserve requirement exemption amount) and with total transaction accounts, savings deposits, and small time deposits less than $2.633 billion (the reduced reporting limit) are eligible for reduced reporting, and must either file a deposit report annually or not at all. Of this group, those with total deposits greater than $21.1 million (but with total transaction accounts, savings deposits, and small time deposits less than $2.633 billion) are required to file the Annual Report of Deposits and Reservable Liabilities (FR 2910a) report annually, while those with total deposits less than or equal to $21.1 million are not required to file a deposit report. A depository institution that adjusts reported values on its FR 2910a report in order to qualify for reduced reporting will be shifted to an FR 2900 reporting panel.”
InfoSight Highlight – FAQs
InfoSight is a FREE resource included with your DakCU membership. Login today to take advantage of this fantastic resource! If you’re new to InfoSight, here are some frequently asked questions that can help you get started.
Q: I don’t know if I have a login. What should I do?
A: Visit the DakCU website to access InfoSight. Once you are on the login screen, click the “Forgotten Password” link. If you have a login, your information will be emailed to you. If you do not have a login, you can register for one on the login page.
Q: What if my login is not working?
A: If you are getting an “invalid login” message, try the “Forgotten Password” link – you would be surprised how many people forget their user name or password! If you are getting any other type of error message, or still cannot login, please take a screenshot of the onscreen message and email to info@leagueinfosight.com for assistance.
Q: How do I customize the dashboard?
A: There are two areas that can be customized on the InfoSight dashboard – the Topics of Interest and Recently Updated. To customize, click on the gear icon in the upper right corner of the orange header for each area. For Topics of Interest, choose up to seven channels and/or specific topics to create quick links to those you’ll be visiting most. Under Recently Update, choose from any (or all!) of the Channels or RISK Alerts and receive a news feed of updates for those items right on your dashboard.
As always, DakCU members may contact Amy Kleinschmit with any compliance related questions at akleinschmit@dakcu.org or 701-250-3964.