WASHINGTON (2/28/12)--The National Credit Union Administration (NCUA) could be moving in the right direction with its proposal to eliminate the Regulatory Flexibility (RegFlex) program and, instead, allowing federal credit unions to engage in activities permitted by the existing RegFlex rule without the need to apply for RegFlex designation. However, the agency should go further and give credit unions even greater freedom from burdensome regulations, the Credit Union National Association (CUNA) said in a comment letter Monday.
Under the proposal to eliminate RegFlex, the NCUA would allow all credit unions to: donate funds to charities of their choosing; accept non-member deposits, subject to predetermined limits, from local governmental entities or other credit unions; and purchase private-label commercial mortgage-related securities, subject to certain net worth constraints and safety and soundness rules. Other rights would also be granted to credit unions that are not covered under the RegFlex designation.
While the NCUA intends the change to relieve general regulatory burden on credit unions and remove the burden created by the RegFlex application process, CUNA questioned how much the changes would actually help overburdened credit unions.
The NCUA has revised its RegFlex program several times over the years, and many of these changes have rendered the RegFlex program much less helpful to credit unions, CUNA Deputy General Counsel Mary Dunn noted in the letter.
"As the NCUA looks to relieve credit unions regulatory burden, it should revisit the elements addressed in the original RegFlex program and work from there," Dunn recommended.
For the full comment letter, use the resource link.