ARLINGTON, Va. - What's good for the goose, is good for the gander (or what's good for federal credit unions is good for state-chartered CUs.) NASCUS is urging NCUA to extend the regulatory relief benefits included in the "Regulatory Flexibility (`Reg-Flex') and Exemption Program" to state-chartered CUs either through the NCUSIF nexus or through congressional mandates such as Truth In Savings. "The Reg Flex rule should allow qualifying state-chartered credit unions the same opportunity to escape regulatory burdens that will be enjoyed by federal credit unions - but the NCUA Board must take into consideration that some Title I rules do not apply to FISCUs just as some Title II rules do not apply to FISCUs," wrote NASCUS. "If the goal is to grant regulatory relief to well run and well capitalized credit unions which must comply with a myriad of NCUA rules, then relief must be extended from both Title I and Title II rules." NASCUS' comment letter included the following recommendations: * Federally insured state-chartered credit unions (FISCUs) that meet the same criteria as federal credit unions must be exempt from any such NCUA rule that applies to them. * FISCUs, because they are subject to supervision by state regulators and because the ANPR specifies that NCUA is seeking regulations for Reg Flex that "have minimal safety and soundness ramifications" should be exempt from some rules which apply exclusively to them. "Arguably, because state-chartered federally insured credit unions are regulated by the state, NCUA provisions calling for both the state regulator and regional director to approve waivers or exemptions could be eased within the minimal safety and soundness ramification criteria by requiring only SSA approval and notice to the NCUA," wrote NASCUS. * The exemptions from regulations must be self-implementing. "The principle espoused behind Reg Flex is to reduce the regulatory burden...By creating an `applied waiver' process for Reg Flex, no burdens have truly been lifted," NASCUS says. * Inclusion of 701.23 must also include 741.8 (701.23 restricts the purchase, sale and pledge of eligible obligations for federal credit unions.) Reg Flex proposes to lift 701.23 restrictions for federal credit unions. 741.8 restricts federally insured state-chartered credit unions from purchasing loans from non-federally insured credit unions without NCUA approval. To grant similar relief, the restriction on FISCUs must be eased. * NCUA should allow lengthened examination cycles for credit unions that meet Reg Flex criteria. "Other federal regulatory agencies have addressed lengthened examination cycles, and NCUA should consider following the lead of its fellow federal regulators," wrote NASCUS. "To the extent that FCUs receive relief, the NCUSIF must also tolerate lengthened examination cycles for FISCUs if the state regulators choose to implement similar relief." NASCUS also suggests NCUA consider adding the following criteria for Reg Flex: * Part 741.204, maximum public unit and nonmember accounts; * Part 741.3, special reserve for non-conforming investments; * Part 741.9 which prohibits insured credit unions from offering uninsured membership shares or deposits; * Part 704, appendix B part 1(a), (b)-(d), expanded authorities for corporate credit unions. -
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