ALEXANDRIA, Va. — NCUA Board Member Michael Fryzel voted against a proposed rule at the body's monthly meeting on Thursday that would prohibit federal credit unions from operating out of homes. Both Chairman Debbie Matz and Board Member Rick Metsger voted in favor of the rule.

Part of the proposed rule, which would go into effect two years after the final rule's effective date, would not only prohibit federal credit unions from operating out of homes, it would also prohibit the storage record there, according to the board action memorandum. Credit unions and other interested parties have 30 days to comment on the proposal.

"The delayed effective date for the requirement for FCUs to have an office location is designed to allow affected FCUs time to adapt to this change. The more immediate requirement to meet in public places improves working conditions for NCUA staff in the short term without immediately imposing a new requirement on small FCUs," the memo said.

Fryzel disagreed with that portion of the proposed rule.

"This proposed rule is flawed in many ways and I cannot support it," Fryzel said at the meeting before casting his first no vote in more than five years.

William L. Myers, director of the Office of Small Credit Union Initiatives, said some credit unions managers have challenged the NCUA's right to access home-based credit unions. Fryzel argued that there was not enough evidence to prove that records are not protected.

Fryzel said none of the credit unions the staff contacted indicated they wanted the NCUA's help.

He also said the NCUA does not have the authority to prevent federal credit unions from operating in homes.

Matz disagreed with Fryzel.

"We have the broad authority to impose certain restrictions on credit unions," she said.

"I didn't interrupt you when you were asking questions," Fryzel shot back.

"We are mandated to protect the records," Matz replied.

Fryzel later told staff attorney Elizabeth Wirick that the language of the proposed rule that he was shown prior to the meeting differed from what was presented.

Metsger said the NCUA has the responsibility not to wait until there is a safety issue.

"It is our responsibility to protect our examiners," Metsger said.

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