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The NCUA Board, voting 3-0, issued a proposal today that would revise the "small entity" designation under the Regulatory Flexibility Act to cover credit unions with less than $100 million in assets, but Board Member J. Mark McWatters said the threshold should be higher.

McWatters advocated for setting that threshold at $250 million in assets – if not $550 million, the threshold set by FDIC and other federal banking regulators – since a federal credit union of that size would still be considered small "relative to the universe of financial institutions within which a federal credit union competes."

Today's proposed rule, issued along with proposed Interpretive Ruling and Policy Statement 15-1, does not confer specific regulatory relief. Rather, it would cause NCUA to "give special consideration to the economic impact" of proposed and final rules on 745 additional credit unions, or a total of 4,869 institutions (77 percent of all).

Staff said 77 percent of all insured credit unions have less than $100 million in assets and hold 10 percent of total industry assets. All those with less than $550 million represent 93 percent of insured credit unions and 33 percent of industry assets.

NAFCU welcomes NCUA's review of the threshold but is advocating regulatory relief for credit unions regardless of asset size.

"We appreciate NCUA's willingness to review the small credit union definition and provide more relief to all credit unions," said NAFCU Director of Regulatory Affairs Alicia Nealon. "However, NAFCU believes defining credit unions by an arbitrary asset size runs the danger of bifurcating the industry. We believe all credit unions deserve regulatory relief.We continue to hear from our members over that threshold of their significant compliance burdens."

NCUA's proposed rule and IRPS 15-1 are out for a 60-day comment period. NAFCU is preparing a Regulatory Alert seeking members' input to the association's official comments.