July 23, 2014

Matz at A.C.: Fixed-assets cap lift proposal in July

July 24, 2014 – NCUA will propose to "effectively" eliminate the 5 percent cap on federal credit unions in fixed assets on July 31, NCUA Board Chairman Debbie Matz announced during her address to NAFCU's annual conference attendees on Wednesday.

"The proposal would cut the red tape and streamline the process for federal credit unions to occupy land or buildings," Matz said during the conference opening general session. "Our intent is to allow federal credit unions to manage their own fixed-asset purchases without having to seek permission or waivers from NCUA."

NCUA Board Member Rick Metsger raised the issue of a "substantive" review of the fixed-assets rule last September as the board approved technical changes to the rule. NAFCU has long sought relief for federal credit unions from the 5 percent fixed-assets cap and has included it in the association's "Dirty Dozen" list of rules it would like to see improved or eliminated. Matz acknowledged NAFCU's "Dirty Dozen" list during her remarks and said the agency is working to address those items under its jurisdiction.

During her speech on Wednesday, Matz also highlighted risks to the credit union industry's safety and soundness, including cybersecurity and interest-rate risk. She also updated attendees on NCUA's approach to regulation and discussed why the agency is seeking to modernize risk-based capital standards. NAFCU remains concerned about the overall impact the agency's risk-based capital proposed rule will have on credit union operations and has expressed the need for a lengthy period for implementation.

Along with working toward eliminating the fixed asset cap for federal credit unions, Matz highlighted some other regulatory modernization initiatives the agency is working on, including:

  • expanding fields of membership;
  • new investment authorities;
  • removing appraisal redundancy;
  • flexible member business lending; and
  • updating advertising provisions.