ALEXANDRIA, Va. (7/24/14)--The National Credit Union Administration is planning to unveil three regulatory relief proposals in upcoming open board meetings. They will include plans to eliminate the 5% cap on a credit union's fixed assets, to modernize the member business lending (MBL) rule, and to update appraisal provisions, NCUA Chair Debbie Matz said Wednesday.
In fact, Matz said one day before the agency is expected to release its July meeting agenda, the fixed-asset plan will be on the July 31 agenda. The proposal is intended to streamline the rules that implement the Federal Credit Union Act provisions governing 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."
Also on the radar for this year: a look by the NCUA board to determine how it might give greater flexibility to credit unions offering MBLs.
"At my Listening Sessions, we heard from credit union officials with innovative ideas to modernize the member business lending regulation in order to serve more small businesses," Matz said, adding, "We are working to incorporate new ideas while keeping in place appropriate safety and soundness measures."
She said look for changes to be proposed later this year.
The NCUA supports legislation that would increase the MBL cap. The Credit Union National Association maintains that there also are steps the regulator could take to aid credit unions approaching the MBL cap of 12.25% of assets.
The agency is planning to review all aspects of the rule, including the waiver process--the federal rules that exempt certain loans from the MBL cap.
CUNA has supported these changes and urged they be addressed. Among other changes CUNA advocates: Updating Federal Credit Union Act definitions that provide exemptions from the MBL cap for credit unions that have a history of primarily making MBLs to their members; expanding provisions addressing MBL loans made for the financing of one- to four-family dwellings; and removing limitations that are not required by the statute.
Matz also said the NCUA is scheduled to update the advertising rule for federal credit unions. She added that staff is studying the latest innovations in technology, including social media, to incorporate into the new proposal.
"CUNA welcomes these changes," said Deputy General Counsel Mary Dunn Wednesday. "We have repeatedly urged the NCUA to do more to lessen the regulatory burden on all credit unions.
"We have specifically raised these and many other issues with Chairman Matz and others at the agency, and we look forward to learning more details on NCUA's efforts concerning regulatory relief for credit unions."
Matz made her remarks at the National Association of Federal Credit Unions' annual conference currently being held in Las Vegas.