ALEXANDRIA, Va.–NCUA recently issued two legal opinions regarding credit union branches.

A federal agency can only allocate free space to a federal credit union if 95% of
the credit union's membership makes use of that facility, according to an NCUA letter.

NCUA Associate General Counsel Sheila Albin wrote that the law governing the subject has been modified to state that the free-space provision "applies to those who would be served by the allotment of space." Previously, the law stated that the free space could be given to any federal credit union as long as 95% of its members were federal employees or their family members.

Albin responded to an inquiry from Barbara Beccles, president of the NLRB Federal Credit Union in Washington, D.C.

Federal credit unions can operate branch offices using the name of their sponsors' subsidiaries, according to an NCUA letter.

NCUA Associate General Counsel Sheila Albin wrote that branch offices with different names are permissible if the federal credit union "takes reasonable steps to ensure members are fully apprised of the use of different names."

Albin, writing in response to Mattel Federal Credit Union Operations Officer Jay Lee, also recommended that a federal credit union should obtain written permission from its sponsor before using names or trademarks of its sponsor's subsidiaries.

NCUA's Loan Fund Gets
Increase From House Panel

WASHINGTON — NCUA could have more money to lend low-income credit unions if the budget approved by the subcommittee that oversees the agency's budget stands.

The House Appropriations Subcommittee on Financial Institutions last Tuesday approved a budget that increased the allocation for the Community Development Revolving Loan Fund from $975,000 to $ 1 million. The increase must be approved by the full committee and full House as well as their counterparts on the Senate side.

NCUA spokesman John J. McKechnie praised the vote.

"NCUA is pleased that Congress has recognized the constructive role that the Community Development Revolving Loan Fund can play in disadvantaged communities. In past years, grants and loans have enabled low-income credit unions to do more to help consumers, and NCUA will continue to use these funds wisely, regardless of the amount appropriated by Congress," he said.

Despite Economic Woes, CUs
Remain Strong, Says NCUA's Johnson

WASHINGTON — The nation's economic problems and the sluggish housing market aren't preventing credit unions from being financially "strong and healthy," NCUA Board Chairman JoAnn Johnson told a Senate panel recently.

She said that credit unions were doing well even though many have experienced an increase in delinquency among real estate loans. Johnson said that overall assets of these credit unions increased by $39 billion during the first quarter of 2008 to an all time-high of $792.18 billion.

Although overall loan delinquency declined by 0.2%, delinquent real estate loans increased by 0.3% during the first quarter, Johnson said in testimony before the Senate Banking Committee.

Johnson, who testified on a panel with several other regulators of financial institutions, said among real estate loans the largest area of concern is in home equity lines of credit. Delinquency rates on those loans increased from 0.80% to 0.96%, between Dec. 31, 2007 and March 31, 2008.

She said the overall picture is strong because these credit unions "have effectively implemented guidance by NCUA related to real estate lending and have positioned the industry to weather this current economic downturn."