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Samantha: Hello, this is Samantha Shares.

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This episode covers N C U A’s Authority
to Assess Civil Money Penalties as

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outlined in its Enforcement Manual.

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The following is an audio version
of that portion of the manual.

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This podcast is educational
and is not legal advice.

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We are sponsored by Credit Union
Exam Solutions Incorporated, whose

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team has over two hundred and
Forty years of National Credit

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Union  Administration experience.

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We assist our clients with N C
U A so they save time and money.

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If you are worried about a recent,
upcoming or in process N C U A

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examination, reach out to learn how they
can assist at Mark Treichel DOT COM.

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Also check out our other podcast called
With Flying Colors where we provide tips

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on how to achieve success with N C U A.

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And now civil money penalties.

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1.

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What are civil money penalties?

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The FCU Act section206(k), 12 U.S.C.

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section1786(k), contains
N.C.U.A.'s authority to issue

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civil money penalties; N.C.U.A.

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Rules and Regulations.

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Section 747, Subpart A, contains the
rules and regulations governing civil

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money penalty administrative hearings.

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The N.C.U.A.

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Board may assess civil money
penalties against either a

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credit union or an institution­
affiliated party (see definition of

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institution-affiliated party above).

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The FCU Act specifies three tiers of
civil money penalties, as follows:

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►		First tier.

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Any credit union or institution-affiliated
party that violates a law or regulation,

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a final order of the N.C.U.A.

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Board, a published agreement with
the Board (such as a published Letter

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of Understanding and Agreement), or
a condition imposed in a published

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writing by the Board in connection
with the granting of any application

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(such as the Insurance Agreement), may
receive a penalty of not more than 5,000

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dollars  for each day of the violation.

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First tier penalties may apply
to credit unions that, even after

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warnings, repeatedly submit late or
substantially inaccurate call reports.

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►		Second tier.

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If the credit union or
institution-affiliated party commits

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a first tier violation, and exhibits
reckless conduct or a breach of

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fiduciary duty, and the violation,
practice or breach is part of a pattern

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of misconduct, or causes more than a
minimal loss to the credit union, or

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results in a monetary gain or other
benefit to the institution-affiliated

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party, then the N.C.U.A.

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Board may assess a civil money penalty
of not more than 25,000 dollars per

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day for each day of the violation.

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►		Third tier.

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Any credit union or institution-affiliated
party that knowingly commits the first

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tier violations, knowingly engages in
unsafe or unsound practices, knowingly

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breaches any fiduciary duty, or knowingly
or recklessly causes a substantial loss to

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the credit union or a substantial monetary
gain or other benefit to a party because

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of the violation, breach, or practice,
may receive assessment of a civil money

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penalty of not more than $1,000,000 per

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day for each day of the violation,
or in the case of a credit union, 1

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percent of assets, whichever is less.

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2.

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How are civil money penalties assessed?

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The normal administrative procedure for a
civil money penalty action is as follows:

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1.

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The regional director notifies
the party of his or her intent

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to recommend to the N.C.U.A.

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Board the issuance of a civil
money penalty, requesting a

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written response from the party.

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2.

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The N.C.U.A.

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Board issues a Notice of Assessment,
setting forth a statement of the law and

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facts on which it bases the assessment.

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3.

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The assessed party has 90 days
to make payment, but may request

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a hearing within 20 days.

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4.

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An administrative law judge will
hold a formal hearing if requested.

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5.

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After the administrative hearing, the
administrative law judge submits a

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recommended decision to the N.C.U.A.

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Board.

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6.

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The N.C.U.A.

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Board issues its final order.

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7.

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An institution-affiliated party or
credit union may appeal to the U.S.

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Court of Appeals within 20 days
of receipt of the final order.

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This concludes the N.C.U.A.

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civil money penalty
authorities and policies.

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If your Credit union could use assistance
with your exam, reach out to Mark Treichel

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on LinkedIn, or at mark Treichel dot com.

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This is Samantha Shares and
we Thank you for listening.