CUNA and NAFCU both said they are anticipating regulatory relief proposals from the NCUA Board on Thursday that will, in general, benefit credit unions.
The NCUA’s Sept. 20 board meeting agenda includes four proposed rules that will ease regulations on allowed investments, field of membership limits and the maximum size of a “small credit union”, and will additionally increase the fees credit unions can charge for payday loan alternatives.
“We will have to wait and see, because the devil’s always in the details,” said Senior Vice President and General Counsel Mary Dunn about the proposals. However, Dunn said from the looks of the agenda, the changes sound positive and they cover topics CUNA has asked the NCUA to consider.
Dunn’s NAFCU counterpart, Vice President of Regulatory Affairs and General Counsel Carrie Hunt agreed, say that in general, what the NCUA Board is proposing is very positive, and if anything, the regulator might not go far enough in easing rules.
NCUA Chairman Debbie Matz during NAFCU’s annual conference in July laid out what regulator relief items she wanted to address this fall, and most of those items made the September agenda, Hunt added.
The NCUA hasn’t said how it would expand its definition of rural district as it limits community charters, but rural districts were reduced in 2010 to a total population of 200,000 or population density in excess of 100 people per square mile. Previously, the limit had been a population of 500,000.
“NAFCU believes that both the 100 people per square mile and the 200,000 people limit are arbitrary and do not pass even a cursory review of our nation’s makeup,” wrote NAFCU President/CEO Fred Becker in a letter to the NCUA March 29, 2012.
Due to significant bank consolidations, more and more banks are leaving small towns and rural areas, which could be neglected if those areas would be regarded as rural by “any reasonable measures” yet fail to meet the current NCUA limit, Becker added.
At the NASCUS Summit in Denver Sept. 12, Matz also said the board was considering increasing the fees credit unions could charge for payday alternative loans to offset risk; a payday alternative loan proposed rule is included on Thursday’s agenda.
“Nobody wants to see those products have big fees, but allowing credit unions to have more flexibility could be good for consumers,” Dunn said.
Hunt said NAFCU was neutral on the topic of increasing payday loan fees, saying she’d rather see the details of the proposed rule first.
Another proposed rule would presumably increase the asset limit that defines a “small credit union” by the NCUA, thus making it eligible for regulatory exemptions and assistance from the Office of Small Credit Union Initiatives. Dunn said
CUNA has previously recommended the current limit of $10 million be increased to $100 million. Hunt said NAFCU has suggested using the CFPB’s definition of $150 to $175 million.
The NCUA board agenda also includes a proposal to allow credit unions to invest in Treasury Inflation Protected Securities. The open meeting is scheduled for 10 a.m. at the agency’s Alexandria, Va. headquarters.