NCUA To 'Effectively Eliminate' 5% Cap On Fixed Assets

LAS VEGAS — NCUA plans to propose a rule to "effectively eliminate" the 5% cap on fixed assets, NCUA Chairman Debbie Matz announced.

Matz's remarks came during an address to the opening general session of NAFCU's annual conference here, and was greeted with applause from the 1,200 attendees. During those remarks, Matz also announced the agency was planning to make "significant changes" to its much-maligned proposed rule on risk-based capital.

"The proposal would cut the red tape and streamline the process for federal credit unions to occupy land or buildings," said Matz. "Our intent is to allow federal credit unions to manage their own fixed-asset purchases without having to seek permission or waivers from NCUA. When you want to update your facilities, upgrade technology or make other purchases that have no impact on safety and soundness, NCUA should not micro-manage your individual business decisions."

Matz made the announcement after references to NAFCU's "dirty dozen" regulations, but the chairman pointed out that NCUA only has the power to change a half-dozen of them, of which she said the fixed asset rule is the most significant.

"We appreciate Chairman Matz heeding credit unions' call for regulator relief," NAFCU president and CEO B. Dan Berger said in a statement. "We welcome the agency's responsiveness on this issue and value its efforts to actively engage the industry and consider the comments received on the proposed risk-based capital rule as well as other vital issues."

As previously reported, Steve Van Beek, an attorney who exclusively represents credit unions at Howard & Howard in Royal Oak, Mich., said he was encouraged by Matz's declaration that, at next week's NCUA board meeting, the regulator would eliminate the 5% fixed asset cap. "That is a step in the right direction and will help," he assessed.

Van Beek previously served as NAFCU's VP and director of regulatory compliance.