NCUA Now Accepting Comments on Proposed Incentive-based Compensation Rule

The NCUA is accepting comments on a joint rulemaking related to incentive-based compensation that was approved by the NCUA Board at its July meeting. For more information and to submit a comment, please go to Regulations.gov.

This proposed rule addresses incentive-based compensation arrangements, as required under section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 956 requires federal financial institutions regulators, including the NCUA, to issue joint regulations or guidelines requiring disclosure and reporting of compensation at financial institutions with more than $1 billion in assets.

The rule is a re-proposal of an earlier rule proposed by regulators in 2016. The proposed rule creates a tiered system by dividing financial institutions covered under the rule into three categories, each with separate requirements:

• Level 1: institutions with assets of $250 billion and above;

• Level 2: institutions with assets of at least $50 billion and below $250 billion; and

• Level 3: institutions with assets of at least $1 billion and below $50 billion.

The rule was adopted by the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Office of the Comptroller of the Currency on May 6. The Board of Governors of the Federal Reserve System and the U.S. Securities and Exchange Commission have not approved the joint rulemaking yet. Once the notice of proposed rulemaking is adopted by all six agencies, it will be published in the Federal Register with a comment period of 60 days following publication. Until then, each agency acting on the proposed rule will make it available on their respective websites and accept comments.

Agencies will consider comments received in response to the 2016 proposed rule as well as any comments received in response to this re-proposal when determining how to implement section 956.

For more information, please visit Regulations.gov.