Fixing the NCUA’s Fixed Asset Rule

by: Jane Pannier

The NCUA has gone back to the drawing board and reissued a revised proposal concerning federal credit unions’ ownership of fixed assets. The proposed rule issued in 2014 drew mostly negative comments stating that it didn’t go far enough in providing credit unions with authority to manage their own resources. This renovated proposal represents a significant improvement over the previous proposal by eliminating altogether the 5% cap on fixed assets.

Under Construction

The proposed changes to the current fixed assets rule are as follows:

The 5% Removal

Elimination of the 5% aggregate limit on investments in fixed assets for federal credit unions with $1,000,000 or more in assets. NCUA proposes to oversee an FCU’s ownership of fixed assets through the supervisory and examination process rather than by setting an artificial limit. Accordingly, the current provisions dealing with waivers to the 5% limit would be deleted and any existing waivers would be considered moot as of the effective date of a final rule.

continue reading »