NCUA Reins In De-Regulatory Act

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ALEXANDRIA, Va. – NCUA, responding to growing losses among credit unions, is expected next week to cut back on its seven-year-old program known as regulatory flexibility, or Reg-Flex, which rewards healthy credit unions with more regulatory leeway.

The NCUA Board is expected to eliminate four of the 10 Reg-Flex categories, those allowing participating CAMEL 1 and CAMEL 2 credit unions to be exempt from the agency's limits on fixed assets, personal guarantees on member business loans, requirements for regular stress tests on risky investments and discretionary control of investments.

The move will enable NCUA to conduct greater oversight over the 3,100 credit unions currently eligible for Reg-Flex.

The Reg-Flex bid is the latest effort by NCUA to tighten supervision, following a move to once-a-year examinations and the addition of almost 100 examiners in the past two years.

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