CUNA wrote Thursday in support of NCUA’s latest fixed-assets proposal, as it would add more flexibility for federal credit unions (FCUs) to own and use fixed assets. The proposal would update NCUA’s regulations on federal credit union occupancy; planning and disposal of acquired and abandoned premises; and incidental powers.
“Meaningful regulatory relief is a top priority for CUNA and our member credit unions, as allocating resources to regulatory compliance diverts resources from financial services to members,” reads CUNA’s letter. “This proposed rule does provide meaningful regulatory relief for federal credit unions by giving additional flexibility for the use of credit union-owned fixed assets by not requiring full occupancy and allowing more flexibility in leasing and renting unused space.”
Specifically, the proposed rule would eliminate the current requirement that credit unions eventually fully occupy or use its land and building. This would be replaced by a requirement that federal credit unions partially occupy building or premises within 6 years, with partial occupancy defined as the use of at least 50% of a building or premises.
The rule also would make changes to the incidental requirements that allow FCUs to lease excess space without the requirement to eventually plan for the use of excess space.
CUNA has long advocated for a proposal like this one, and believes NCUA could increase flexibility to fixed-assets requirements by increasing the partial occupancy requirement to 10 years or eliminating it altogether by basing fixed assets use limits on safety and soundness.
In its letter, CUNA also asked for NCUA to clarify the waiver process for occupancy and use requirements, and suggested the waivers be granted automatically unless there are safety and soundness issues.