ALEXANDRIA, Va. — The NCUA Board unanimously approved a rule Thursday morning to eliminate the 5% cap on fixed assets.
The rule — which
The rule also seeks to simplify partial occupancy requirements for premises acquired with an eye toward future expansion.
"The proposed rule will cut red tape and provide regulatory relief for more than 3,500 federal credit unions," Matz said. "NCUA shouldn't micromanage credit union business decisions like upgrading technology, updating facilities or making other purchases that have no impact on safety and soundness. Rather than spending hours writing a waiver application, credit unions could better devote their time to developing a fixed-assets management program under this proposed rule."
The regulator has issued a 60-day comment period on the rule.
Mike Coleman, NAFCU's director of regulatory affairs, praised the move and said the trade association would examine it closely.
"We will review this rule carefully for its full impact, including the creation of a new regulatory requirement for a fixed assets management program as well as a separate provision addressing occupancy for acquired premises," Coleman wrote in a statement. "We will see our members' input and plan to comment on the proposed rule.
Coleman also noted that the fixed-asset rule was one which had been included in NAFCU's "dirty dozen" list of regulations it would like to see NCUA improve or eliminate.
Matz, however, countered in Vegas that there are only six items on that list — including fixed assets — that NCUA has any control over.
Budget Improvements
NCUA also used its July board meeting to announce its mid-year budget numbers, including a reduction of the 2014 budget by $1.1 million as a result of improved efficiencies and reduced line items.
Matz noted that this year's savings will also offset credit union fees for NCUA's 2015 operating budget.
The regulator's revised operating budget for 2014 stands at $266.9 million. The most significant savings, the agency said, came from a $1.5 million net decrease in employee pay and benefits, along with a $289,000 reduction in travel expenses.
An overview of the changes to NCUA's 2014 operating budget is available online
No Further Assessments Or Refunds-- Likely
The Board also announced that further Corporate Stabilization Fund assessments are unlikely, with projected 2013 year-end costs for the fund ranging from $2.8 billion to $4.2 billion compared to a range of $6 billion to $9.3 billion at the end of 2011.
Both ends of the range of net projected remaining assessments on CUs are negative. Improved performance of legacy assets, continued economic recovery and more than $1.75 billion in settlements from big banks have left the CSF with a projected surplus of $600 million to $2 billion by the end of 2021.
"We've come a long way since 2010, and we truly appreciate how the Corporate Resolution and the NCUA Guaranteed Notes program saved thousands of credit unions from failing," Matz said. "The current double-negative projected assessment range is positive news for credit unions."
Despite those improvements, at this time NCUA is not currently projecting that credit unions will be subject to a refund on any assessments paid.
In other business during the meeting, the board approved an expansion of the community charter at Call FCU to serve the entire Richmond, Va., metropolitan area.
