ALEXANDRIA, Va. (8/19/11)--Federal credit unions that own a building where their home office, branch, or other offices are located may form their own credit union service organization (CUSO), sell the building to that CUSO, and proceed to rent part of the building out to their credit union, under certain circumstances. The National Credit Union Administration (NCUA) in a legal opinion told Guy Messick, of Media, Pa.-based Messick & Weber, P.C., that this practice is permissible under NCUA regulations as long as the majority of the building is leased out to a credit union and credit union-affiliated members. The NCUA has previously said that CUSOs that lease their fixed assets must primarily lease those properties to credit unions and members of affiliated credit unions.” “Primarily,” in some cases, meant leasing more than 50% of the property to a credit union or related entities. However, NCUA Associate General Counsel Hattie Ulan warned in the most recent letter that “a majority is not the only definition of ‘primarily’ and will not be sufficient to meet the ‘primarily’ serves requirement in all circumstances.” Ulan also noted that CUSO leasing arrangements “should not be used as a means for (a credit union) to circumvent the fixed-assets rule.” The NCUA’s fixed-assets rule states that federal credit unions with $1 million or more in assets cannot invest in fixed assets if the investment would cause the aggregate of all that credit union’s fixed assets to exceed 5% of it’s shares and retained earnings. For the full NCUA legal opinion letter, use the resource link.