WASHINGTON (5/21/13)--The Credit Union National Association has spoken in support of National Credit Union Administration proposed fixed-asset rule changes, but is urging that more improvements be made to the rule, in a comment letter filed Monday.
The CUNA comment letter responds to a March NCUA proposal that makes plain language revisions to the agency's fixed asset rule, and adds new definitions and rewordings.
The changes would impact NCUA's current fixed-assets rule, Section 701.36, which 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 NCUA's amendments to section 701.36 would "clarify the regulation by improving its organization, structure and ease of use," CUNA Deputy General Counsel Mary Dunn wrote.
While these are positive improvements, Dunn also urged the NCUA "to take this opportunity to adopt substantive changes" that will make the rule more effective and meaningful for credit unions, while remaining faithful to the letter and intent of the Federal Credit Union Act.
"The rule in its current and proposed forms gives NCUA staff too much authority over the business decisions of federal credit unions...Involving itself into the decision-making process of credit unions is outside the duties for which the NCUA was created. CUNA is confident that credit unions themselves are in the best position to make business decisions and, conversely, are at a competitive disadvantage when NCUA dictates their business decisions to them," Dunn added.
CUNA's recommendations for improving the fixed-assets rule include:
Eliminating the current regulatory limit imposed on the ownership of fixed assets, which is 5% of a federal credit union's shares, since it is not required under the Federal Credit Union Act;
Improving the rule's definition of "partially occupy" to clear up some credit union confusion;
If the cap is retained, using the blanket waiver concept to give credit unions additional flexibility under the fixed-assets rule;
Adding an appeal process to denied fixed-asset rule waiver requests; and
Issuing an annual report detailing fixed-asset rule waiver-request statistics from each region.
For more of CUNA's comments on the fixed-asset rule, use the resource link.