NCUA Cracks Down On Fixed Assets Limits

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ALEXANDRIA, Va. – NAFCU called on NCUA to facilitate waivers for the agency’s cap on fixed-assets, reinstated for thousands of credit unions last year when NCUA trimmed its regulatory flexibility, or Reg-Flex program.

NAFCU said its members are particularly concerned with provisions of the reinstated rule allowing credit unions over the 5% (of assets) limit to be grandfathered in to a lower limit as their fixed assets decline. NAFCU suggested to NCUA that the fixed assets ratio be examined on a quarterly basis when each credit union files its 5300 Call Report.

“We have heard from many of our members that examiners are requiring waivers for any downward trend,” NAFCU President Fred Becker said to NCUA Chairman Debbie Matz in a letter last week. In a recent example, he said, one credit union could not replace an ATM because it had not gotten a timely response to its waiver request. In another example, a credit union could not replace a computer.

“NAFCU has serious concerns with a credit union being impeded from replacing resources that have a direct impact on serving the membership,” wrote Becker. “In these difficult economic times, it is vital that credit unions be given the tools they need to serve their members to the fullest. Having to wait over 45 days for a waiver to be approved is not workable in our current environment.”

He asked that NCUA state that a credit union’s fixed assets must be examined on not more than a quarterly basis, and the waiver process must be completed in a timely fashion.

In answering Becker, NCUA repeated its concerns about fixed assets. “Every dollar spent on a fixed asset decreases the resources available for credit unions to earn money,” said Todd Harper, chief spokesman for the agency. “NCUA remains committed to working on a case-by-case basis to ensure that credit unions not only make prudent decisions before tying up earning assets, but also continue to operate safely and soundly. Under its rules, NCUA will act on waiver requests within 45 days of receiving a complete package from the credit union.”


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