Lending compensation rules; NAFCU seeking comments!

first_imgOver the last few weeks, the NAFCU Compliance team has received several questions about NCUA’s lending compensation rules related to senior management officials. While this blog will highlight some of NCUA’s current guidance, there is much room for improvement and NCUA’s recent advance notice of proposed rulemaking (ANPR) seeks to do exactly that. NAFCU is planning to submit comments to the proposal and would like your help! With that said, what is this rule about anyway?Section 701.21(c)(8) of NCUA’s rules and regulations generally prohibits officials and employees of a federally-insured credit union, or their immediate family members, from receiving, “directly or indirectly, any commission, fee, or other compensation in connection with any loan made by the credit union.” That being said, the rule does not prohibit credit unions from paying an incentive or bonus to an employee in connection with loans made by the credit union provided that the board of directors establishes written policies and internal controls in connection with such incentives and monitors compliance with such policies at least monthly. See, 12 C.F.R. § 701.21(c)(8)(iii)(C). It is important to note, however, that this exception does not apply to “senior management employees,” which the rule defines as “the credit union’s chief executive officer…any assistant chief executive officers…and the chief financial officer.” See, 12 C.F.R. § 701.21(c)(8)(ii). ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr continue reading »last_img

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