Relief in fixed-assets plan needs to be clarified with guidance: CUNA
April 29, 2015
WASHINGTON (4/30/15)--The National Credit Union Administration's proposed rule on fixed assets would appear to provide regulatory relief for credit unions, but CUNA says there is no way to be sure with the absence of supervisory guidance from the agency.
In its comment letter filed Wednesday, CUNA does not support the proposal and requests the NCUA re-issue the proposal for another comment round and include supervisory guidance for public comment as well.
"We feel that the supervisory guidance for fixed assets should have been published in conjunction with the proposed rule ... to ensure that stakeholders had the opportunity to perform a thorough analysis of the overall impact of the removal of the 5% fixed assets ownership limitation from the current regulation," reads the letter.
While CUNA is in favor of removing oversight of fixed assets from the regulation and supervisory process, it is concerned this proposal simply shifts the requirement from regulation to the supervisory process without any real change.
The NCUA has proposed a six-year partial occupancy requirement, but CUNA believes the rule should provide that credit unions be responsible for determining the time needed to reach full or partial occupancy of a property.
CUNA believes the NCUA should provide credit unions an exception under which land not valued above a certain percentage of a credit union's shares and retained earnings could avoid occupancy restrictions from the NCUA.
CUNA also requested the NCUA revise the definition of "partial occupancy" to allow any reasonable use of land or premises by a credit union related to its operations. This would bring a much-needed change to the 2013 fixed assets amendments that reduced credit unions' ability to meet partial occupancy requirements.
An increase in the small credit union exemption from the ownership of fixed assets, which is currently set at $1 million in assets, would provide regulatory relief, the letter states.