NCUA To Expand Reg-FlexProgram

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ALEXANDRIA, Va. - (07/22/05) -- The NCUA Board Thursday proposedexpanding the agency's Regulatory Flexibility, or Reg-Flex programthat eases regulatory limits for well-managed credit unions, tomake the vast majority of federally chartered credit unionsavailable. The proposal, issued for a 60-day public comment period,would lower the threshold for eligibility in the program from allthose credit unions with a high CAMEL rating and a net worth of atleast 9%, to all those with a net worth of at least 7%. The movewould increase the number of federal credit unions eligible forReg-Flex to as many as 3,900, or 70% of all federal charters, upfrom the 3,450, or 62% currently eligible. The Board also proposeda new rule restricting post-employment by examiners in the creditunion industry. The proposal bars senior NCUA examiners fromworking for a credit union they have examined for one year afterleaving the agency. The Board also issued for a comment a proposalthat would allow low-income credit unions to redeem secondarycapital before five years, which would no longer require them todiscount the secondary capital in their net worth calculations at20% a year, as is required under current rules. Low-income creditunions are the only credit unions authorized to issue secondarycapital and to count it as net worth.

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