Newsroom

July 23, 2015

NCUA Board, voting 3-0, eliminates FCU fixed-asset cap

The NCUA Board voted 3-0 during its open meeting today to approve a final rule eliminating the 5 percent limitation on federal credit union investments in fixed assets – a move long encouraged by NAFCU.

NAFCU President and CEO Dan Berger responded, "We welcome this move and thank the board for its leadership on reforming the fixed-asset rule, which will bring credit unions needed regulatory relief."

The proposed rule will remove the limit that currently applies to federal credit unions with $1 million or more in assets. The final rule:

  • moves oversight of federal credit union fixed-assets ownership from regulation to the supervisory process; and
  • simplifies the rule's partial-occupancy requirements by establishing a single six-year period and removing the current 30-month requirement for partial-occupancy waiver requests.

In other action today, the board voted 3-0 to approve a technical change to the stress testing and capital planning rule. NAFCU had raised concerns about the rule in general since it was finalized last year, as the association believes it does little to enhance the security of the National Credit Union Share Insurance Fund and adds to the regulatory burden for credit unions.

Also on the agenda was NCUA's midyear budget reprogramming; report on the NCUSIF; and report on the NCUA Guaranteed Notes program and Temporary Corporate Credit Union Stabilization Fund assessment determination. The agency indicated there is no need for an assessment in 2015 and that there is an increasing likelihood of a refund to credit unions at some point in the future. NAFCU continues to monitor this issue closely.

On budget reprogramming, staff are recommending actions that will mean a net decrease of $1.3 million to the approved 2015 operating budget, which was set at $288.4 million. The $1.3 million reduction would be used to offset 2016 budget requirements and reduce operating fees.

There will be more discussion of NCUA's budget during a hearing later today by the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. NCUA Chairman Debbie Matz will testify. It will be her first appearance before Congress since 2011. The hearing is at 2 p.m.