NCUA to Propose Raising Small CU Threshold to $100 Million

Larry Fazio, the National Credit Union Administration's Director of the Office of Examination and Insurance, testified today that next week the NCUA Board will propose doubling the small credit union asset size threshold from $50 million to $100 million.

Fazio noted that in January 2013 the NCUA Board raised the small entity asset size threshold from $10 million to $50 million in assets, which nearly doubled the number of credit unions classified as small for purposes of the Regulatory Flexibility Act nearly doubled. Today, 65 percent of all credit unions are covered by the small credit union definition.

Increasing the threshold from $50 million to $100 million would provide regulatory relief for an additional 745 credit unions in future rulemakings and 77 percent of the credit union industry would be defined as a small credit union.

For example, credit unions defined as small credit unions are exempt credit unions from our interest rate risk rule and are not subject to the agency's risk-based net worth requirement.

In addition, Fazio recommended that Congress act to modify the Federal Credit Union Act to permit all federal credit unions to add underserved areas; to expand credit union member business lending (MBL) by raising the MBL cap and exclude 1- to 4-unit, non-owner-occupied residential dwelling from the definition of a member business loan; to allow healthy and well-managed credit unions to issue supplemental capital that will count as net worth; and to grant NCUA the same authority as other bank regulators to supervise third-party vendors.

Read the testimony.