ALEXANDRIA, Va. (5/25/12)--The enhanced management and investment rights given to some credit unions under the National Credit Union Administration's regulatory flexibility (RegFlex) program will soon be extended to the 1,770 credit unions that are not covered under the RegFlex designation after the agency approved expansion of that program on Thursday.
According to the agency, the new rule will permit all credit unions to:
- Donate funds to the charities of their choosing;
- Accept non-member deposits, subject to predetermined limits, from local governmental entities or other credit unions;
- Purchase private-label commercial mortgage-related securities, subject to certain net worth constraints and safety and soundness rules;
- Purchase whole loans from other federally insured credit unions, in some cases;
- Enter into borrowing-repurchase transactions in which the purchased securities have maturities exceeding the maturity of the borrowing-repurchase agreement, provided the investment value does not exceed net worth and subject to certain constraints;
- Invest in zero-coupon securities, subject to certain net worth and investment maturity limits; and
- Use a six-year time horizon to partially occupy unimproved property that is acquired for future expansion.
"By lifting unnecessary restrictions, granting additional powers, and increasing management flexibility, this RegFlex relief expansion advances NCUA's Regulatory Modernization Initiative and complements [President Barack Obama's] efforts to ease regulatory burdens where appropriate," NCUA Chairman Debbie Matz said.
Matz said the NCUA decided to expand its RegFlex program to cover all credit unions after seeing the success of the limited RegFlex program. However, the agency noted, some of the new RegFlex authorities will be limited to well-capitalized credit unions.
The NCUA said it would lay out information on the new authorities in an easy-to-reference table format, in a bid to help credit unions more easily determine which elements of RegFlex apply to them.
The RegFlex final rule will become effective 30 days after it is published in the Federal Register.