Eliminating the requirement of obtaining personal guarantees for business loans unless a waiver is granted will be the main focus of a comment letter to the NCUA from NACUSO General Counsel Guy Messick.

At the NCUA board's March meeting, the regulator passed a proposed regulation eliminating four of the ten regulatory relief items provided to well-capitalized and well-run credit unions as defined under NCUA Regulations Part 742. Messick said if the four items are eliminated, the Reg Flex qualified CUs will have to follow the fixed asset rule, the requirement to stress test their securities, remove the discretionary control of investments and obtain personal guarantees for business loans unless a waiver is granted.

Messick said the elimination of the exemption for personal guarantees "is only supported by evidence that business loans have caused significant losses in some credit unions."

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