NCUA Proposes Removing Fixed Asset Cap
March 19, 2015
March 19, 2015
The NCUA Board today issued a new fixed assets proposal for a 30-day comment period. This proposed rule includes improvements that were not part of last year’s fixed assets proposal, which was not adopted.
The new proposed rule would only apply to federal credit unions and would:
- Eliminate the 5% aggregate limit on investments in fixed assets that is currently in place for federal credit unions with $1,000,000 or more in assets. Instead of applying the current aggregate limit, the Board proposes to oversee ownership of fixed assets through the supervisory process and guidance.
- Remove the waiver provisions regarding the aggregate limit.
- Establish a single six-year time period for partial occupancy of such premises and discontinue the 30-month requirement for partial occupancy waiver requests.
“The NCUA’s fixed asset proposal is a step in the right direction demonstrating trust and respect for credit union management,” said John Trull, director of regulatory advocacy for the NWCUA. “The proposal removes a concentration cap and allows the credit union to make appropriate fixed asset investments within the framework of a fixed asset management plan. The Association continues to advocate for sensible changes to regulations that allow credit unions to better serve and protect their members.”
NCUA has indicated that if the proposal is adopted, it will issue new supervisory guidance on fixed assets to examiners that will be provided to federal credit unions. During the Board meeting, Board Member Mark McWatters cautioned that the guidance should not, in effect, impose additional limitations. CUNA applauds the new proposed changes but agrees that implementation of the rule will be critical. CUNA will provide a Regulatory Comment Call shortly.
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