ALEXANDRIA, Va. (9/13/13)--The National Credit Union Administration on Thursday approved a final version of fixed-asset regulation changes that does not make any substantive changes to regulatory requirements. Rather, the revisions are intended to clarify the rule by improving its organization, structure, and "ease of use."
The changes include plain language revisions, new definitions and rewordings that impact the current fixed-assets rule, Section 701.36. That rule allows federal credit unions to purchase, hold and dispose of property necessary or incidental to their operations. These fixed assets include office buildings, branch facilities, furniture, computer hardware and software, and ATMs.
The regulation changes will become effective 60 days after they are published in the Federal Register.
The Credit Union National Association has spoken in support of these proposed fixed-asset rule changes and said on Thursday that the changes "may help with compliance."
The NCUA said the rule will also offer greater flexibility to federal credit unions. "Those that receive a waiver from the 5% fixed-assets limit will have the ability to make multiple purchases of fixed assets within a 1% buffer above their approved waiver limit. This change is intended to eliminate the need for a federal credit union to make repeated waiver requests for minor acquisitions," the agency wrote.
NCUA board member Michael Fryzel first suggested streamlining the fixed-assets regulations. "Through the changes approved today, credit unions should find the regulation easier to follow," NCUA Chairman Debbie Matz said during the open board meeting.
CUNA and other commenters encouraged the NCUA to eliminate the current regulatory limit imposed on the ownership of fixed assets, which is 5% of a federal credit union's shares. Others suggested the NCUA could eliminate the current requirement to fully occupy premises acquired for future expansion.
The NCUA said these changes were beyond the scope of the current rule, but could be taken up at a later date.
A community charter expansion request filed by Peoples Advantage FCU, Chester, Va., was also approved during the Thursday meeting.
Peoples Advantage FCU currently serves Prince George, Dinwiddie, Chesterfield, and Sussex Counties, and the cities of Petersburg, Hopewell, and Colonial Heights, Va., and holds $53.5 million in assets. The credit union has 7,491 members, but is looking to expand that membership base by serving persons "who live, work, worship or attend school in, and businesses and other legal entities in the Richmond, Va., Metropolitan Statistical Area."
Fryzel asked NCUA staff to report on the progress of the credit union, post-expansion, within the next year.
A proposed charitable donation regulation was the other item on the open agenda. See News Now for coverage.
The closed portion of the agency's board meeting followed the open session. NCUA supervisory activities were the lone item on the closed meeting agenda.