ALEXANDRIA, Va. – The ink was not even dry on a new corporate credit union rule when NCUA was planning amendments to the regulations that will severely limit the ability of corporates to earn income by limiting their investment powers.
The proposed amendments, which will be issued over the coming weeks for public comment, will provide several ways for the corporates to earn income, according to Robert Fenner, general counsel for NCUA.
They would allow federally chartered corporates to assess annual membership fees and to increase retained earnings.
The proposals would limit a natural person credit union’s membership to one corporate. “This will prevent corporates from shopping for deposits,” Fenner said.
The proposals also will set internal control reporting requirements, similar to what the Sarbanes-Oxley Act required for publicly owned corporations. And they will require a recorded vote on board actions.
More changes are expected to the new corporate rule in the coming months, among them are a change in the requirements on obtaining Wall Street ratings on investments.
