NAFCU on Flexibility Changes
NAFCU President/CEO Fred Becker criticized the NCUA for providing "insufficient justification" when making its decisions to eliminate certain exemptions for credit unions that are eligible for the agency's Regulatory Flexibility program.
In a letter to NCUA Chairman Debbie Matz, Becker wrote that he was especially concerned about the decision to require a personal guarantee on all member business loans.
The RegFlex program gives federal credit unions that are well-capitalized and have CAMEL 1 and 2 ratings exemption from certain regulatory requirements.
He wrote that the final rule would put credit unions at a disadvantage relative to other financial institutions that don't require the guarantee. He also complained that the agency responded to the concerns raised by NAFCU and other associations and institutions in "an extremely cursory manner."
He added that the agency's explanation for eliminating the exemptions from the rule banning FCUs from investing more than 5% of their shared and retained earnings in fixed assets "lacks sufficient justification."
Becker also complained that the provisions regarding which credit unions would be grandfathered in to the exemption and the waiver process were unclear.
At its October meeting, the board voted to remove those exemptions as well as to eliminate the exemption from the rule requiring stress tests to determine the impact of a 3% increase or decrease in interest rates. It also voted to eliminate the exemption from the existing rule, which limits the delegation of discretionary control to third parties over the purchase and sale of investments.