The NCUA announced Tuesday it has revised its definition of a“fleet” of vehicles to five or more for purposes of member business lending.

The previous definition was for two or more vehicles. NCUA BoardChairman Debbie Matz had said the change was coming during her address to the NASCUSSummit in Denver on Sept. 12.

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“The current definition of a business fleet—two or morevehicles—is no longer adequate to meet members' needs. So, at therequest of a credit union, NCUA's general counsel reviewed thedefinition and issued a new legal opinion that both reflects therealities of today's marketplace and protects safety andsoundness,” Matz said in a release Tuesday.

The legal opinion said the member business lending rulerequires all member business loans meet certain collateral andsecurity requirements, and allows credit unions to make businessvehicle loans without complying with an 80% loan-to-valuerequirement except in the case of “fleet” vehicles.

This is because fleet vehicles tend to depreciate more quicklythan non-business, personal-use vehicles and therefore pose ahigher risk to the lending credit union.

By updating the “fleet” definition, the NCUA is giving creditunions greater flexibility in making lending decisions, the agencysaid. A credit union making a loan to a member who owns a businesswith fewer than five vehicles would qualify for the loan-to-valueexception.

The opinion is consistent with the way fleet vehicles aretreated by the Internal Revenue Service and auto industrystandards, the NCUA said.