NCUA Board approves proposed rules

The NCUA yesterday reported that its Board has approved a proposed rule on incentive-based compensation and a revised proposed rule on succession planning. The NCUA Board also approved maintaining the current interest rate ceiling for federal credit unions at 18 percent.

The proposed rule on incentive-based compensation is required under section 956 of the Dodd-Frank Act, which requires federal financial institutions regulators, including the NCUA, to issue joint regulations or guidelines requiring disclosure and reporting of compensation at financial institutions with more than $1 billion in assets. The rule was adopted by the FDIC, the FHFA, and the OCC on May 6. The Federal Reserve Board and the SEC have not approved the joint rulemaking yet. Once the notice of proposed rulemaking is adopted by all six agencies, it will be published in the Federal Register with a comment period of 60 days following publication. Until then, each agency acting on the proposed rule will make it available on their respective websites and accept comments.

The NCUA Board also approved a proposed rule that would require boards of directors at federally insured credit unions to establish and adhere to processes for succession planning. This new proposed rule modifies the 2022 proposal based on the public comments received and upon further consideration of the issues.