Onsite Coverage: NCUA Board Clarifying Proposed Fixed Assets Rule
ALEXANDRIA, Va. — The NCUA’s proposed rule regarding federal credit union ownership of fixed assets doesn’t make any substantive changes to the rule; rather, it merely clarifies the regulation so credit unions better understand how to comply.
The proposed changes, revealed Thursday during the regulator’s March board meeting, replace regulatory text with so-called “plain language,” add an introductory section, reorganize existing definitions and add new ones, and clarify the waiver process.
Staff Attorney Pamela Wu told the board when presenting the proposed rule that it redefines terms that credit unions had told the NCUA were unclear.
Specifically, the rule redefines terms in a provision that requires a credit union to partially occupy unimproved property, with both the “partially occupy” and “unimproved property” definitions receiving additional clarification.
The proposed rule also intends to clarify the NCUA’s expectations for waiver requests, as well as its obligations in reviewing those requests.
In the proposal, the NCUA issued an informal comment request for ideas to improve the wavier process, admitting the current rule is somewhat inconsistent, uneven and burdensome in some circumstances.
“The board emphasizes that NCUA is committed to making the agency’s waiver process more consistent and user friendly and welcomes public comment on ways of doing so,” the proposed rule said.
Language treatments proposed would clarify exactly when a particular requirement or limitation is subject to waiver by the NCUA, and would describe the agency’s obligations in each provision that is subject to a waiver.
Comments on the proposed rule are due 60 days after it is published in the Federal Register.
The NCUA Board also approved a community charter conversion request from the $313 million Cinfed FCU of Cincinnati. The credit union has penetrated 74% of its potential current membership and has seen its primary select employee group, the federal government, downsize in recent years, Chairman Debbie Matz said. She said the conversion “makes sense for the long haul” of the credit union.
As of Dec. 31, 2012, Cinfed served nearly 30,000 members, all gained from SEGs. The conversion will expand the credit union’s field of membership to include a four-county area in the Cincinnati metropolitan area. Three of the four counties are across the Ohio River in Kentucky: Boone, Campbell and Kenton. Hamilton County, the fourth county, is located in Ohio and includes Cincinnati itself.
Matz asked Consumer Access Analyst Elliot Weiss why Cinfed requested to serve only four of the 14 counties that make up the Cincinnati metropolitan statistical area. He said the four counties form a well-defined local community, which is designated as a “Core Based Statistical Area” with a population of 2.5 million or less.
Additionally, the four counties provide public transportation access to Cinfed locations, he said.