ALEXANDRIA, Va.-Hundreds of credit unions have quietly qualified for relief from regulatory restrictions on member business loans and raising supplementary capital through NCUA's low income program, even as Congress continues to hold up decade-long requests for regulatory relief.
Both issues-an increase in the MBL cap and allowing credit unions to raise outside capital-will be the main focus during tomorrow's congressional hearing on regulatory relief for credit unions, even as the witnesses add numerous new requests to the wish-list. Meantime, NCUA has qualified almost 2,000 credit unions-800 in the last year-as low income credit union, thereby bypassing congressional restrictions on both areas.
NCUA's initiative has effectively delivered reg relief to these additional LICUs, including some of the biggest credit unions in the country: $2.3-billion Michigan State University FCU; $1.5-billion Polish & Slavic Federal Credit Union; $1.4-billion Kern Schools Federal Credit Union; $1.5-billion GTE FCU; $1.1-billion Local Government Employees FCU; $1.1-billion Tyndall FCU; and $1.1-billion Barksdale FCU.
Also included on the list are $470-million Fresno County FCU; $740-million Purdue Federal Credit Union; $685-million Financial Community Federal Credit Union; $400-million Crane Federal Credit Union; $630-million Y-12 Federal Credit Union; $560-million AltaOne Federal Credit Union; $420-million Deseret First Federal Credit Union, and $520-million and Greater Texas Federal Credit Union.
A Decade-Long Fight
NCUA's low-income designation exempts a credit union from the 12.25% of assets MBL limit, allows a credit union to raise secondary forms of capital and to accept non-member deposits.
So far, Congress has rejected the MBL and supplementary capital provisions for a decade or more. The credit union lobby groups have indicated they will include other provisions rejected by Congress in the past, including allowing all credit unions to add an underserved community to its FOM, eliminating privacy notice requirements and creating a new appeals process for examinations (see related story, above).
