ALEXANDRIA, Va. — NCUA extended some regulatory relief to nearly 750 credit unions Thursday when it raised the asset ceiling for definition as a small credit union from $50 million to $100 million at its monthly board meeting.
As a result of the new rule, 77% of federally insured credit unions — a total of 4,690 — are now considered small. Before implementing new regulations, NCUA must give special consideration to the impact they might have on small institutions as well the right to receive consulting services and other assistance from NCUA's Office of Small Credit Union Initiatives.
In addition to doubling the asset threshold, the agency also pledged to revisit the issue every three years.
"The asset ceiling for small credit unions is now 10 times higher than when I became Chairman in 2009 and 100 times higher than when I first joined the Board in 2002," NCUA Chairman Debbie Matz said after the vote. "When I returned to the Board, CEOs of small credit unions told me the definition hadn't kept pace with credit union trends, so updating this definition became part of my regulatory modernization Initiative."
NCUA received 16 letters commenting about the small credit union asset ceiling. That is only a handful compared to the thousands of letters commenting on its proposed member-business-lending and supplemental capital regulations. Most of the asset-ceiling commenters urged the agency to push the threshold even further.
Christopher Anuswith, vice president risk management at $495 million-asset ABNB Federal Credit Union in Chesapeake, Va., called for a $300 million threshold in a letter dated April 21, while Barbara Bean, chief executive at $13 million-asset Cal Poly Federal Credit Union in Pomona, Calif., asked for a $550 million threshold in an April 2 letter.
According to Matz, however, economic data does not support expanding the limit beyond $100 million.
NAFCU had also called for a $550 million threshold. Following the vote, a spokesman said the group appreciated the increased threshold, but she continued to press for additional regulatory relief measures. "We continue to hear about significant compliance burdens felt by member credit unions exceeding the new threshold," Alicia Nealon, NAFCU's director of regulatory affairs said in a press release.
Officials at CUNA were supportive of the revised, $100 million threshold, but they expressed concerns giving another 700-plus credit unions the small credit union designation will pull resources offered by the Office of Small Credit Union Initiatives.
CUNA's president and CEO Jim Nussle had called for "de-coupling" OSCUI assistance from the $100 million threshold, preserving those resources for smaller, more vulnerable institutions, but the agency opted to make its assistance available to all small credit unions.
In other news, Matz said she would propose a policy change delegating charter-expansion requests by community credit unions, handled currently by the board, to NCUA's Office of Consumer Protection. The move would cut about two months off the review process, she said.
Matz' predecessor as chairman, Dennis Dollar, praised the proposal.
"The OCP knows the compliance issues and regulations that are required, and their decisions are designed not to have a philosophical or political component to them," Dollar said. "Appeals by a credit union to an OCP decision can go to the NCUA Board, but requiring a board vote on a compliant application that meets all regulatory requirements is unnecessary and only serves to add months to the approval process. This is an excellent move. I wish we'd done this while I was at NCUA."
