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Aug. 1, 2014 – NAFCU welcomed NCUA's move to propose an easing in the fixed-assets rule – which the board announced during its meeting Thursday, and which NAFCU has long advocated for – and will closely review the proposal for its impact on member credit unions.

NAFCU Director of Regulatory Affairs Mike Coleman commented, "We are pleased NCUA is making an effort to provide more flexibility to credit unions in determining whether investing in particular fixed assets is in their members' best interest. NAFCU has long maintained that the fixed asset cap is arbitrary and unnecessary, and we welcome a change."

NAFCU included the measure on its "Dirty Dozen" list of rules that could be improved or eliminated. NAFCU staff will review the proposal, solicit input from members and issue a Regulatory Alert shortly.

NCUA Board Member Rick Metsger, when the board approved technical changes to the rule, noted last September that he supported a "substantive" look at the fixed assets rule. Board Chairman Debbie Matz thanked Metsger for initiating the effort at NCUA to get this proposal started. "NCUA shouldn't micromanage credit union business decisions like upgrading technology, updating facilities or making other purchases that have no impact on safety and soundness," she said.

Thursday's proposed rule would remove the current requirement that federal credit unions seek NCUA approval before exceeding 5 percent investment in fixed assets and allow FCUs to set their own investment limits under an internal fixed assets management program. The FAM program would have to include a written board policy, board oversight and ongoing internal controls. The proposal is out for a 60-day comment period.

In addition to addressing the cap, the proposed rule would revise the occupancy requirement applied to premises acquired for future expansion. Where the current rule sets varied requirements on partial and full occupancy, today's proposal would establish a single requirement – partial occupancy within five years from acquisition, whether premises are improved or unimproved. Lastly, the proposal would ease the rule's waiver provision by allowing federal credit unions to apply for a waiver from the 5-year occupancy timeframe at any time that is appropriate.