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WASHINGTON-While credit unions seem to be initially pleased overall with the new incidental powers regulation passed by NCUA at its July board meeting and effective September 5, changes can still be made, according to NCUA officials on a CUNA-sponsored audio conference. A few changes were made from previous agency policy in crafting the rule, such as permitting income for performing activities considered incidental to the business of credit unions. NCUA General Counsel Bob Fenner pointed out that mainly the regulation was created to consolidate and simplify agency policies. “The NCUA Board issued this new incidental powers regulation in order to bring together in one place an authoritative guidance for federal credit unions on the types of services and activities that you may engage in, even though they’re not expressly stated in the Federal Credit Union Act,” he said. NCUA Associate General Counsel Sheila Albin told several hundred listeners that there are steps credit unions can take to either determine whether an activity is permissible under incidental powers or petition the NCUA Board to change the regulation. First, she encourages credit unions to study the categories, with the help of an attorney when possible, to determine whether or not an activity is included. “I would encourage credit unions that may not have access to their own legal counsel to call the agency,” she urged. “It’s important that the regulation establishes categories rather than an exclusive listing of activities,” Fenner indicated. The 12 categories included in the reg are certification services, correspondent services, electronic financial services, excess capacity, financial counseling services, finder activities, loan related products, marketing, monetary instruments, operation programs, stored value products, and trustee or custodial services. NCUA Staff Attorney Chrisanthy Loizos commented, “These 12 categories, we hope, encompass most if not all the activities that credit unions currently engage in, or intend to engage in, in the future, although the list is not an exhaustive or exclusive list.” Next, credit unions should examine the definition of incidental powers to decide whether an activity is permissible. If the credit union is still unsure or believes an activity is not covered by the regulation, officials should contact the NCUA Office of General Counsel (OGC). Albin invited credit unions to make their inquiry either formally or informally, via letter, e-mail, or telephone. The OGC will then determine whether the activity is already permissible or not, and whether the NCUA Board should consider an amendment to the regulation. A petition for an amendment should either be in letter or memo form and include pertinent information, such as potential licensing necessities or member interest, and an analysis of how the new activity meets the definition of an incidental power. “This is not really different than what interested parties can currently do with respect to any regulation,” Albin said. [email protected]

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