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NCUA hikes small CU asset threshold to $50M, consistent with CUNA recommendation
ALEXANDRIA, Va. (1/11/13)--The National Credit Union Administration (NCUA) Thursday increased the asset-level test that defines a small credit union. The threshold was raised to $50 million as
Click to view larger image In the NCUA boardroom Thursday, just moments after the regulators took action to increase the threshold that defines a "small" credit unions, NCUA Chairman Debbie Matz talks to Paul Gentile, CUNA's new EVP of strategic communications and engagement, about that and other credit union topics. (CUNA Photo)
recommended by the Credit Union National Association (CUNA), up from $10 million.

CUNA President/CEO Bill Cheney said, "Raising the threshold for the definition of 'small entity' is a step in the right direction, and we look forward to monitoring the effectiveness of this approach for credit unions."

He added, "In our comments to the agency, we suggested a threshold of $50 million for agency assistance and access--and a higher level for purposes of regulatory relief. We commend the agency for taking the action today, which will benefit many more small credit unions. CUNA continually looks for ways to assist small credit unions and we anticipate working with NCUA as it implements this new threshold."

The NCUA's change will make assistance from the NCUA's Office of Small Credit Union Initiatives (OSCUI) available to more than 4,600 credit unions--an increase of 2,270. The agency made it clear that the OSCUI will make changes to its procedures to handle the increased workload without adding additional staff.

Under the new rule, the NCUA will consider periodic changes to the asset-level test, initially every two years, and eventually every three years.

NCUA Chairman Debbie Matz said, "We will not be in a situation again where the definition lags reality."

Click to view larger image CUNA EVP of Strategic Communications and Engagement Paul Gentile (right), who came on board with CUNA Jan. 2, attended his first NCUA meeting in his new capacity yesterday. Gentile is shown here with NCUA board member Michael Fryzel to his right and NAFCU Executive Vice President of Government Affairs Dan Berger to Fryzel's right. Just this week, Berger was named to succeed retiring Fred Becker as head of NAFCU. That change takes effect July 31. (CUNA Photo)
The regulatory changes will go into effect in 30 days after publication in the Federal Register, which generally occurs within a week or two of an agency's adoption of a new rule. Credit unions that meet the regulatory definition for "small" have some additional flexibility when it comes to NCUA rules. The current $10 million small credit union asset threshold was set by the agency in 2003.

In CUNA's comment letter, CUNA demonstrated that using the "complexity index" as a method for determining small entity thresholds can or will be used in a variety of ways that could, ultimately, lead to negative or unintended results for credit unions. "Those include reductions in credit union flexibility, increases in risk profiles and reductions in member service provision," the letter stated.

The agenda for today's NCUA open board meeting also included: 
  • A board briefing on an interagency final rule addressing higher-priced mortgage loans;
  • The agency's 2013 annual performance plan;
  • A final rule to extend credit union low-income designation response time to 90 days, up from 30 days; and
  • Some technical amendments.
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NCUA Small CU Rule
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