Thursday, February 23, 2012

Comment on NCUA's Reg Relief Rule

The National Credit Union Administration Board (the Board) proposed a rule extending regulatory relief to all federal credit unions (FCUs) to engage in activities that were previously only granted to FCUs that had received Regulatory Flexibility (RegFlex) designation – FCUs that are well-capitalized and are not supervisory concerns. As a consequence, this proposed rule will extend certain regulatory authorities to undercapitalized and weak FCUs.

While the American Bankers Association (ABA)is supportive of efforts to lower regulatory burdens, ABA believes that it is inappropriate to extend such regulatory relief to FCUs that are undercapitalized or represent supervisory concerns. Specifically, ABA believes the Board should not expand the authorities of undercapitalized FCUs by allowing them to invest in undeveloped land or accept nonmember deposits. Such an expansion could jeopardize the viability of an undercapitalized FCU and pose a risk to the National Credit Union Share Insurance Fund (NCUSIF). Additionally, ABA believes the Board should retain its charitable contribution and donation rule, which it is proposing to eliminate.

Read the letter.
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