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Regulatory Advocacy

Working Together to Reduce Regulatory Burdens
Regulation Summary
Agency National Credit Union Administration
Rule Name FCU Ownership of Fixed Assets
Comment Due Date 10/10/14

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PowerComment
  • NCUA has proposed to amend its regulation governing federal credit union (FCU) ownership of fixed assets by removing the waiver requirement for FCUs to exceed the 5% aggregate limit on investment in fixed assets. 
  • An FCU that chooses to exceed the limit of 5% of shares and retained earnings on the ownership of fixed assets may do so if it implements a fixed assets management (FAM) program. 
  • An FCU’s FAM program must demonstrate that it has analyzed an investment that would cause it to exceed the 5% limit prior to the purchase to ensure that the FCU can afford any impact on earnings and net worth levels. 
  • Also, the FAM program would be subject to NCUA supervisory scrutiny and must provide for close ongoing oversight of fixed assets levels and their effect on the financial performance of the FCU.
  • The FAM would include a written FAM policy that establishes limits on the aggregate amount of the FCU’s fixed assets.  The FCU’s board must approve this policy. 
  • The rule does not cover FCUs that have assets up to $1 M.
  • It also does not cover state credit unions. However, state credit unions that have parity provisions may be able to receive comparable treatment and should check with their leagues and state regulators. State CUs as well as FCUs should comment on the proposal.
  • Click here for the text of the proposal.
  • NCUA is accepting comments until October 10.  You can write NCUA directly through PowerComment.  Please also help CUNA prepare its comment letter by providing feedback to CUNA staff by October 1.  
  • The proposal is explored in detail in CUNA's Comment Call on the right side of your screen.