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Hello, this is Samantha Shares.

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This episode covers N C U A’s press
release on U S Banking Agencies

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Issuance of a proposed rule on
Incentive Based Compensation.

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The following is an audio
version of that press release.

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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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The rule is two hundred pages
long as a link to the full

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text is in the show notes.

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And now the press release.

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Agencies Issue Proposal on
Incentive-Based Compensation

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(May sixth , twenty twenty four) – The
Federal Deposit Insurance Corporation (F D

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I C), the Office of the Comptroller of the
Currency (O C C), and the Federal Housing

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Finance Agency (F H F A), have adopted
a Notice of Proposed Rulemaking (N P R)

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to address incentive-based compensation
arrangements, as required under section

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956 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (section 956).

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The National Credit Union Administration
(N C U A) is expected to take action

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on the NPR in the near future.

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The U.S.

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Securities and Exchange Commission (SEC)
has included a rulemaking to implement

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section 956 on its rulemaking agenda.

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This NPR is intended to advance
stakeholder engagement needed to develop

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a final incentive-based compensation rule.

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The N P R re-proposes the regulatory
text previously proposed in June

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twenty sixteen, and seeks public
comment in the preamble on certain

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alternatives and questions.

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Section 9 5 6 requires the appropriate
Federal regulators—the F D I C, the Board

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of Governors of the Federal Reserve System
(F R B), the O C C, the N C U A, the F H

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F A, and the S E C—to jointly prescribe
regulations or guidelines with respect to

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incentive-based compensation practices at
certain financial institutions that have

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one billion dollars or more in assets.

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Once the N P R is adopted by all six
agencies, it will be published in the

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Federal Register with a comment period
of sixty days following publication.

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Until then, each agency acting on the NPR
will make it available on their respective

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website, and will accept comments.

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The proposed rule includes
prohibitions intended to make

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incentive-based compensation
arrangements more sensitive to risk.

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These include a prohibition on
incentive-based compensation arrangements

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that do not include risk adjustment
of awards, deferral of payments, and

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forfeiture and clawback provisions.

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The prohibitions also emphasize the
important role of sound governance and

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risk management control mechanisms.

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These prohibitions would help safeguard
covered institutions from the types

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and features of incentive-based
compensation arrangements that

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encourage inappropriate risks.

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The recordkeeping and disclosure
requirements in the proposed regulatory

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text would assist the appropriate
Federal regulator in monitoring

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and identifying areas of potential
concern at covered institutions.

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Comments received on this N P R
and those previously submitted

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on the twenty sixteen N P R, will
further inform efforts to address

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incentive-based compensation arrangements,
as required under section 956.

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This concludes the press release.

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The full rule is available
in a link in the show notes.

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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.