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NCUA Issues Proposal to Amend Regulatory Flexibility Act
Friday, February 20, 2015 6:35 AM

At yesterday's monthly meeting of the National Credit Union Administration board, approved a proposal that would amend Interpretive Ruling and Policy Statement (IRPS) 87-2 to increase the asset threshold used to define "small entity" under the Regulatory Flexibility Act (RFA) from $50 million to $100 million.

As noted by Chairman Debbie Matz, increasing the threshold is intended to provide transparent consideration of regulatory relief for a greater number of credit unions in future rulemakings.

The RFA, as amended, generally requires federal agencies to determine and consider the impact of proposed and final rules on small entities. Since 2013, the Board has defined "small entity" in this context as a federally insured credit union (FICU) with less than $50 million in assets. The proposal would redefine "small entity" as a FICU with less than $100 million in assets.

Board Member J. Mark McWatters expressed concerns with the proposed amendments, as described in the following excerpt from his prepared statement.

"To me, the modest increase in the asset threshold from $50 million to $100 million does not constitute meaningful regulatory relief for FICUs. Instead, I wish to advocate for an increase in the asset threshold to not less than $250 million and believe that a principled argument also exists for designating each FICU with assets of less than $550 million as a 'small entity' for RFA purposes.

McWatters continued: "By comparison, the FDIC, OCC, and Federal Reserve Board each use the Small Business Administration’s asset threshold of $550 million for determining 'small entity' status under the RFA. Credit unions with assets of less than $250 million—and, preferably, $550 million—also merit the regulatory relief noted above that follows a 'small entity' designation under the RFA."

CUNA will review the proposed changes in detail and provide a Regulatory Comment Call shortly.