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NCUA Board Plans to Eliminate Fixed-Asset Cap
Friday, August 1, 2014 6:35 AM

At a meeting yesterday, the National Credit Union Administration Board approved a proposed rule to provide federal credit unions with regulatory relief and greater flexibility managing fixed assets by removing the waiver requirement for credit unions to exceed the 5-percent aggregate limit on fixed-asset investments.

The fixed-assets proposed rule would:

  • Allow federal credit unions to exceed the 5-percent limit without prior NCUA approval, provided they do so safely and soundly by establishing and following a fixed-asset management policies and programs.
  • Simplify the partial occupancy requirement for premises acquired for future expansion.
  • Eliminate or streamline certain aspects of the fixed-asset waiver requirements.

“NCUA shouldn’t micromanage credit union business decisions like upgrading technology, updating facilities or making other purchases that have no impact on safety and soundness,” NCUA Board Chair Debbie Matz said. “Rather than spending hours writing a waiver application, credit unions could better devote their time to developing a fixed-assets management program under this proposed rule.”

Comments on the proposed rule, available online here, must be received within 60 days of publication in the Federal Register.

The Board also unanimously approved reprogramming NCUA’s 2014 operating budget with a net reduction in overall expenditures of $1.1 million for the remainder of the year.

“The NCUA Board takes stewardship of the NCUA budget very seriously, and we have done our due diligence to ensure that this budget is a prudent use of credit union funds,” Matz said. “The $1.1 million in 2014 budget savings reflect a concerted effort by every NCUA office to increase efficiencies and reduce line items wherever possible, and the agency will still have the resources needed to achieve its statutory mission. Savings this year will offset credit union fees for NCUA’s 2015 operating budget.”

An overview of the changes to NCUA’s 2014 operating budget is available online here.

The Board also received two briefings on:

  • The performance of the corporate credit union legacy assets and the NCUA Guaranteed Notes program, which concluded that, at present, future Corporate Stabilization Fund assessments are unlikely.
  • The performance of the National Credit Union Share Insurance Fund, which showed positive second-quarter results.

Details on the NCUA Guaranteed Notes program are available on the agency’s website here. Details on the costs of the Corporate Resolution are available online here.