Stabilization Bill Becomes Law; Stabilization Calculator; Reg D

I've never seen an idea turn into law this quickly.  When NCUA originally announced its corporate stabilization plan, the costs for individual credit unions were massive.  NAFCU quickly looked into other possibilities in order to lessen the impact on the industry.  Yesterday, a lot of lobbying and hard work paid off.

Yesterday, President Obama signed a law that does a number of things for the credit union industry. The law, among other things, does the following:

• Extends $250,000 credit union share insurance protection to 2013;
• Enables credit unions to spread the cost of corporate stabilization over 7 years;
• Extends replenishing the National Credit Union Share Insurance Fund through premiums to 8 years;
• Increases NCUA borrowing authority to $6 billion; and
• Establishes $30 billion NCUA emergency borrowing authority. 

How  much relief will this law give your credit union in 2009?  NAFCU has created this calculator to show you.  We've also prepared this chart to show the relief for different peer groups.  Download Stabilization Plan_Estimated Costs by Asset Peer Group. 

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In the spirit of regulatory relief, here's some good news regarding Reg D.  The Fed has approved a final rule to loosen requirements concerning the dreaded Reg D tranfer limitations.

The Board has revised Regulation D's restrictions on the types and number of transfers and withdrawals that may be made from savings deposits. The final amendments increase from three to six the permissible monthly number of transfers or withdrawals from savings deposits by check, debit card, or similar order payable to third parties. Technological advancements have eliminated any rational basis for the distinction between transfers by these means and other types of pre-authorized or automatic transfers subject to the six-per-month limitation.

This becomes effective 30 days after publication in the Federal Register.  Read the Federal Reserve notice here. Here are some thoughts:

• Your online banking transaction limits may need to be updated.
• Alert your marketing folks.  Brochures will need to be updated.  And your website as well.
• Look for disclosures that talk about the limitations.  Reg E, for example. Or perhaps your membership disclosure booklet.

• Your core processor may need to be updated if it flags transfers from savings accounts.

Comments

[DJ]

When you say the share insurance protection is extended TO 2013 -- May I be so daring as to assume it is THROUGH 2013 and continues to have the December 31st deadline?

[Anthony Demangone]

Yes. Through the end of 2013.