ARLINGTON, Va. NAFCU is pressing NCUA to make some changes in a proposed set of rules on federal credit union ownership of fixed assets.
The proposed changes would amend Section 701.36 of NCUA’s rules and regulations by replacing current language with plain language, adding an introductory section to define the scope of the section, reorganizing the existing definitions and adding definitions of “partially occupy” and “unimproved land or unimproved real property,” and clarifying the process of obtaining waivers from the NCUA.
While NAFCU says it generally supports the proposals, the trade group wants NCUA to remove the third-prong of the definition of “partially occupy,” which requires that the partial occupation is “sufficient to show that the federal credit union will fully occupy the premises within a reasonable time.” NAFCU said that requirement is unnecessary.
On a related note, NCUA also wants changes to aspects of Section 701.36 that limit the ability by FCUs to invest in fixed assets by CUs with more than $1 million in assets. NAFCU called “wholly arbitrary” a rule that in aggregate of all an FCU’s investments in fixed assets be limited to 5% of its shares and retained earnings, unless the NCUA grants the FCU a waiver. NAFCU wants the cap removed.
