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Matz Plans New Regulatory Relief Actions
Thursday, July 24, 2014 6:40 AM

Credit unions will have greater flexibility and be able to offer better services to members under a series of planned regulatory relief changes, National Credit Union Administration Board Chairman Debbie Matz said yesterday.

“NCUA’s annual regulatory review, coupled with my Regulatory Modernization Initiative and the questions and concerns we heard at the recent Listening Sessions, will continue to result in actions that cut red tape, provide new flexibility and make it easier for credit unions to serve their members,” Matz said.

Matz spoke to 1,200 attendees at the National Association of Federal Credit Unions’ annual conference here and described planned and proposed regulatory improvements as part of the Regulatory Modernization Initiative.

Matz also reiterated facts about the agency’s proposed rule on risk-based capital and noted that NCUA is now turning the comments and ideas received into action, including revising the risk weights in the proposed rule for investments, mortgages, member business loans, credit union service organizations and corporates.

Additionally, Matz repeated her warnings about cyber-attacks and interest rate risk. The full text of the Chairman’s speech is available here.

Matz described three relief proposals planned for upcoming open meetings of the NCUA Board: eliminating the fixed-assets cap, modernizing member business lending and updating appraisal provisions.

Matz said the NCUA Board plans at its July open meeting to propose a rule effectively eliminating the 5-percent cap on fixed assets. The proposal would streamline the process for federal credit unions to occupy land or buildings.

“Our intent is to allow federal credit unions to manage their own fixed-asset purchases without having to seek permission or waivers from NCUA,” Matz said. “When federal credit unions want to update facilities, upgrade technology or make other purchases that have no impact on safety and soundness, NCUA should not micro-manage individual business decisions.”

Matz then said that, later this year, the NCUA Board will look to give greater flexibility to credit unions offering member business loans.

Matz also said the NCUA Board is scheduled to update the advertising rule for federal credit unions and the agency would be working to incorporate the latest technology, including social media, into the new proposal.

Matz also highlighted three relief proposals that were put out for comment in the second quarter: facilitating associational fields of membership, expanding investment authorities and removing redundancy in appraisals.

“We issued a proposed rule in April that would empower federal credit unions to automatically add seven categories of associations,” Matz said. “Now we’re looking through the comment letters to consider other association categories that may qualify for automatic approval.”

After finalizing a rule in January to authorize derivatives, the NCUA Board in June followed up with a proposed rule to authorize qualified federal credit unions to securitize their own assets for sale as investments. The proposal is open for comments through Aug. 25.

Also open for comments through August 25 is a proposed rule to eliminate a redundant requirement for appraisals. The proposal will remove the NCUA appraisal provision that is superseded by mortgage rules from the Consumer Financial Protection Bureau. At the same time, NCUA proposed a change to assist members who are underwater with their mortgages.