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This podcast provides you the ability to listen to new regulatory guidance issued by the National Credit Union Administration, and occasionally the F D I C, the O C C, the F F I E C, or the C F P B. We will focus on new and material agency guidance, and historically important and still active guidance from past years that NCUA cites in examinations or conversations. This podcast is educational only and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated. We also have another podcast called With Flying Colors where we provide tips for achieving success with the N C U A examination process and discuss hot topics that impact your credit union.
Hello, this is Samantha Shares.
This episode covers N C U Aâs press
release on U S Banking Agencies
Issuance of a proposed rule on
Incentive Based Compensation.
The following is an audio
version of that press release.
This podcast is educational
and is not legal advice.
We are sponsored by Credit Union
Exam Solutions Incorporated, whose
team has over two hundred and
Forty years of National Credit
Union Administration experience.
We assist our clients with N C
U A so they save time and money.
If you are worried about a recent,
upcoming or in process N C U A
examination, reach out to learn how they
can assist at Mark Treichel DOT COM.
Also check out our other podcast called
With Flying Colors where we provide tips
on how to achieve success with N C U A.
The rule is two hundred pages
long as a link to the full
text is in the show notes.
And now the press release.
Agencies Issue Proposal on
Incentive-Based Compensation
(May sixth , twenty twenty four) â The
Federal Deposit Insurance Corporation (F D
I C), the Office of the Comptroller of the
Currency (O C C), and the Federal Housing
Finance Agency (F H F A), have adopted
a Notice of Proposed Rulemaking (N P R)
to address incentive-based compensation
arrangements, as required under section
956 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (section 956).
The National Credit Union Administration
(N C U A) is expected to take action
on the NPR in the near future.
The U.S.
Securities and Exchange Commission (SEC)
has included a rulemaking to implement
section 956 on its rulemaking agenda.
This NPR is intended to advance
stakeholder engagement needed to develop
a final incentive-based compensation rule.
The N P R re-proposes the regulatory
text previously proposed in June
twenty sixteen, and seeks public
comment in the preamble on certain
alternatives and questions.
Section 9 5 6 requires the appropriate
Federal regulatorsâthe F D I C, the Board
of Governors of the Federal Reserve System
(F R B), the O C C, the N C U A, the F H
F A, and the S E Câto jointly prescribe
regulations or guidelines with respect to
incentive-based compensation practices at
certain financial institutions that have
one billion dollars or more in assets.
Once the N P R is adopted by all six
agencies, it will be published in the
Federal Register with a comment period
of sixty days following publication.
Until then, each agency acting on the NPR
will make it available on their respective
website, and will accept comments.
The proposed rule includes
prohibitions intended to make
incentive-based compensation
arrangements more sensitive to risk.
These include a prohibition on
incentive-based compensation arrangements
that do not include risk adjustment
of awards, deferral of payments, and
forfeiture and clawback provisions.
The prohibitions also emphasize the
important role of sound governance and
risk management control mechanisms.
These prohibitions would help safeguard
covered institutions from the types
and features of incentive-based
compensation arrangements that
encourage inappropriate risks.
The recordkeeping and disclosure
requirements in the proposed regulatory
text would assist the appropriate
Federal regulator in monitoring
and identifying areas of potential
concern at covered institutions.
Comments received on this N P R
and those previously submitted
on the twenty sixteen N P R, will
further inform efforts to address
incentive-based compensation arrangements,
as required under section 956.
This concludes the press release.
The full rule is available
in a link in the show notes.
If your Credit union could use assistance
with your exam, reach out to Mark Treichel
on LinkedIn, or at mark Treichel dot com.
This is Samantha Shares and
we Thank you for listening.