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First updates in 30 years OKd for Corp. CU charter policy
ALEXANDRIA, Va. (2/18/11)--For the first time in 30 years, the National Credit Union Administration approved updates to its chartering rules for corporate credit unions. At its open board meeting Thursday, the NCUA adopted a final Interpretive Ruling and Policy Statement (IRPS) that not only describes the requirements for charter applicants, it also includes the NCUA’s standards for reviewing the feasibility of a new corporate charter. Under the regulator’s interpretation, effective 30 days after publication in the Federal Register, a corporate charter application will need to be submitted by a group of at least seven people that represent different natural person credit unions. The application must satisfy the NCUA that the new institution would be viable. That assessment would be based on assessment of the proposed field of membership and other factors. It must also be determined that the new corporate would provide needed services to its members. The NCUA Office of Corporate Credit Unions (OCCU) will conduct an independent investigation of the corporate credit union’s charter application to assess economic and long-term viability. While the final IRPS largely reflects the proposed guidance issued by the NCUA in September, there were a few changes made based on comments submitted by the Credit Union National Association and others. The changes included:
* Clarification on the timeframe for a newly chartered corporate credit union to meet certain capital requirements; * Assurance from the agency in the rule’s supplementary information that the mandatory Letter of Understanding and Agreement required for a new corporate charter will take into consideration the future success of the corporate; and * Adding the right of charter applicants to petition the NCUA directly for a vote on an application where either: the OCCU director determined the application does not merit approval, or the applicants believe the OCCU has moved too slowly on the application.
Use the resource links below to view the NCUA IRPS and CUNA’s complete comment on the proposed statement.
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