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Matz Plans New Regulatory Relief Actions

​NCUA Chairman Details Plans to Eliminate Fixed-Asset Cap and Modernize Member Business Lending, Advertising and Other Rules

LAS VEGAS (July 23, 2014) – Credit unions will have greater flexibility and be able to offer better services to members under a series of planned regulatory relief changes, National Credit Union Administration Board Chairman Debbie Matz said today.

“NCUA’s annual regulatory review, coupled with my Regulatory Modernization Initiative and the questions and concerns we heard at the recent Listening Sessions, will continue to result in actions that cut red tape, provide new flexibility and make it easier for credit unions to serve their members,” Matz said.

Matz spoke to 1,200 attendees at the National Association of Federal Credit Unions’ annual conference here and described planned and proposed regulatory improvements as part of the Regulatory Modernization Initiative.

Matz also reiterated facts about the agency’s proposed rule on risk-based capital and noted that NCUA is now turning the comments and ideas received into action, including revising the risk weights in the proposed rule for investments, mortgages, member business loans, credit union service organizations and corporates.

Additionally, Matz repeated her warnings about cyber-attacks and interest rate risk. The full text of the Chairman’s speech is available here.

New Regulatory Relief Rulemakings
Matz described three relief proposals planned for upcoming open meetings of the NCUA Board: eliminating the fixed-assets cap, modernizing member business lending and updating appraisal provisions.

Matz said the NCUA Board plans at its July open meeting to propose a rule effectively eliminating the 5-percent cap on fixed assets. The proposal would streamline the process for federal credit unions to occupy land or buildings.

“Our intent is to allow federal credit unions to manage their own fixed-asset purchases without having to seek permission or waivers from NCUA,” Matz said. “When federal credit unions want to update facilities, upgrade technology or make other purchases that have no impact on safety and soundness, NCUA should not micro-manage individual business decisions.”

Matz then said that, later this year, the NCUA Board will look to give greater flexibility to credit unions offering member business loans.

“At my Listening Sessions, we heard from credit union officials with innovative ideas to modernize the member business lending regulation in order to serve more small businesses,” Matz said. “We are working to incorporate new ideas while keeping in place appropriate safety and soundness measures.”

Matz also said the NCUA Board is scheduled to update the advertising rule for federal credit unions and the agency would be working to incorporate the latest technology, including social media, into the new proposal.

Current Regulatory Relief Rulemakings
Matz also highlighted three relief proposals that were put out for comment in the second quarter: facilitating associational fields of membership, expanding investment authorities and removing redundancy in appraisals.

“We issued a proposed rule in April that would empower federal credit unions to automatically add seven categories of associations,” Matz said. “Now we’re looking through the comment letters to consider other association categories that may qualify for automatic approval.”

After finalizing a rule in January to authorize derivatives, the NCUA Board in June followed up with a proposed rule to authorize qualified federal credit unions to securitize their own assets for sale as investments. The proposal is open for comments through August 25.

“This authority would provide large credit unions with another tool to mitigate both interest rate risk and liquidity risk,” Matz said.

Also open for comments through August 25 is a proposed rule to eliminate a redundant requirement for appraisals. The proposal will remove the NCUA appraisal provision that is superseded by mortgage rules from the Consumer Financial Protection Bureau. At the same time, NCUA proposed a change to assist members who are underwater with their mortgages.

Throughout the modernization process, Matz said, NCUA will seek comments from credit unions on proposed rules.

“As always, with each proposed rule, your voices will be heard for comments and concerns.”

NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 101 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At and Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues.


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