Citing safety and soundness concerns, the NCUA is rejectingpleas by NAFCU and some credit unions to reverse its recentdecision and allow well- capitalized credit unions to be exemptfrom restrictions on how much they can spend on fixed assets.

“Our evidence shows that investing in higher levels ofnonearning assets can materially affect a credit union's earningsability and, therefore, its viability. Call Report data show ahigher percentage of earnings problems among credit unions withmore than 5% of shares and retained earnings invested in fixedassets,” NCUA Chairman Debbie Matz wrote in a letter to NAFCUPresident/CEO Fred Becker.

She added that the agency's regional directors are authorized toprovide a specific operating range for new acquisitions.

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