Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
NEW NCUA opinion loosens fleet definition
ALEXANDRIA, Va. (UPDATED: 12:25 P.M. ET, 9/18/12)--The National Credit Union Administration (NCUA) has expanded the  definition of "fleet" of vehicles, as used in its member business lending rule, to mean five or more vehicles--saying its former use of two vehicles to define fleet is "overly restrictive."

The NCUA, in a legal opinion letter dated Sept. 13, said the revision better reflects "marketplace realities" and provides regulatory relief to credit unions, enabling them to more effectively serve the business needs of their members.

The NCUA said that in reviewing how best to define "fleet," it evaluated case law, how other government agencies use the term, and auto industry standards.  NCUA Associate General Counsel Frank Kressman, who penned the opinion, said the agency was "particularly persuaded" by Internal Revenue Service publications on the topic and treatment of fleets by auto industry fleet programs.

"Accordingly, we amend the definition of 'fleet' as follows: A fleet is five or more vehicles that are centrally controlled and used for a business purpose, including for the purpose of transporting persons or property for commission or hire.

"The revised definition also addresses our safety and soundness concerns about collateral devaluation. In this definition, we intend to capture only those vehicles that depreciate at a faster rate than personal vehicles not used for a commercial purpose," Kressman wrote.

However, the opinion letter added, the NCUA continues to expect credit unions to properly underwrite MBLs, taking into account all risks posed by business lending.

The opinion was requested by John Hirabayashi, president and CEO, Community First CU of Florida, who is on CUNA's Examination and Supervision Subcommittee.

"This is a positive development, and we encourage the agency to replicate this approach as often as possible," said Mary Dunn, CUNA deputy general counsel.
Other Resources

RSS





print
News Now LiveWire
Consumer spending is slumping #Market #Economy http://t.co/RI4HS68IuJ
14 hours ago
April is #NationalFinancialLiteracyMonth & @TheNCUA Chair Matz urges #creditunions to help members learn to manage/protect their finances.
16 hours ago
Fed. FI regulators' statmnts on compromised credentials/destructive malware #cybersecurity http://t.co/f4uTBDm1PU http://t.co/zP5Iw6VxZc
17 hours ago
Home prices rising faster than wages: @RealtyTrac #NewsNow #Market http://t.co/wa74mnw3Cu
19 hours ago
.@Nussle dropped by the @ACUMuseum recently. Read about his visit http://t.co/bYe8RRgYLP
20 hours ago