ALEXANDRIA, Va. – NCUA approved a deal allowing a federal credit union to form a CUSO to buy its office building, then lease back a majority of the facility to the credit union while leasing the rest to outside entities.
The credit union, unidentified in the legal opinion, plans to occupy 5,800 square feet on the first floor of a two-story building and continue leasing 5,500 square feet of space on the second floor to an outside entity.
In a new legal opinion, NCUA noted that its regulations require a CUSO to primarily serve members of the credit union, so under the sale/leaseback proposal the office must still be primarily occupied by the credit union. “In this case, we believe the “primarily” serves requirement is met because the CUSO will lease the majority of the building to the [credit union],” said the legal opinion.
NCUA cautioned that the proposed sale/leaseback should not be used by the credit union as a way to circumvent the agency’s limitations on fixed assets.
