Jan. 11, 2013 – A final rule approved Thursday by the NCUA Board revises the definition of a “small” credit union from $10 million in assets to $50 million for regulatory relief purposes, falling short of the CFPB’s $175 million threshold urged by NAFCU.
NAFCU President and CEO Fred Becker said the association appreciates that the agency increased the threshold but added that it “should have increased the maximum asset size of a credit union considered ‘small’ further to $175 million, as NAFCU has strongly urged, to ease the regulatory burden on many more credit unions.”
In a comment letter filed in November, NAFCU told the NCUA that adopting the CFPB’s $175 million threshold would create a “consistent standard beneficial to both credit unions and government agencies.”
The final rule makes another 2,270 federally insured credit unions eligible for regulatory relief, including exemption from last year's rule on interest-rate risk and risk-based net worth requirements. All told, the final rule covers 4,672 insured credit unions, or 67.8 percent, nearly double the number captured by the $10 million threshold.
NCUA originally proposed to set the small credit union threshold at $30 million; that was raised to $50 million after the agency reviewed comments it had received and conducted further analysis, said NCUA Chairman Debbie Matz.
NAFCU will continue to press NCUA for a higher threshold and hold the agency accountable to its commitment of revisiting the threshold after two years and then every three years after that. It wants to include in that process a substantive evaluation of the risk small credit unions pose to the National Credit Union Share Insurance Fund.
When Congress amended the Federal Credit Union Act in 1998 and imposed the arbitrary $10 million threshold, more than 60 percent of federally insured credit unions were considered “small entities.” As of June 30, just 35 percent of FICUs met the definition.