Credit union bill wins committee approval.

Credit Union Bill Wins Committee Approval

The Senate Banking Committee approved, by a 16 to 2 vote, a bill that would impose new audit requirements on credit unions. The Credit Union Membership Access Act (HR 1151) is intended to protect and preserve credit unions and their members while keeping their business practices safe and sound. The House approved HR 1151 on April 1.

The bill requires credit unions with over $500 million in assets to obtain an annual audit of their financial statements. It also requires credit unions with over $10 million in assets to follow GAAP, or accounting principles prescribed by the National Credit Union Association (NCUA) that are no less stringent than GAAP, for financial statements and reports filed with the NCUA.

The NCUA presently allows supervisory committees to engage nonlicensed individuals to perform an opinion audit on their behalf. Senate Banking Committee Chairman Alfonse M. DAmato (R-N.Y.) said in a statement that the requirements for the voluntary use of outside auditors are in compliance with state accountancy laws, including licensing requirements.

The bill sets up three kinds of common bond formations: single common bond, multiple common bond and community credit unions. It grandfathers all current bond arrangements and ensures that credit unions will not be able to expel current members.

The bill now must win full Senate approval; however, it is not likely that it will reach the Senate floor until the fall.

International Rules Streamlined

The FDIC revised three different groups of rules and regulations for international banking, consolidating them into one regulation, Part 347. The new regulation reduces filing requirements, allowing banks to compete abroad more effectively.

Changes to the rules, which had not been revised since 1979, were part of the FDICs review of its regulations and policies under section 303(a) of the Riegle Community Development and Regulatory Improvement Act of 1994. Most important for CPAs, Part 347 simplifies accounting for fees on international loans. Instead of requiring specific accounting procedures, the new regulation directs banks to follow generally accepted accounting principles.

Not only does the new regulation ease filing burdens for banks that wish to open a foreign branch or make a foreign investment, but it also amends regulations governing insured branches of foreign banks and specifies deposit rules for uninsured state-licensed branches of foreign banks.

New Part 347 is effective July 1. For more information, contact Christie A. Sciacca, associate director, FDIC Division of Supervision at 202-898-3671 or Jamey Basham, counsel in the FDIC Legal Division at 202-898-6865.