In a unanimous vote, the NCUA Board moved to eliminate a restriction that limited federal credit unions' investment in fixed assets to 5% of assets. Thursday's vote opens a 30-day comment period on the proposal, after which the three-member board will vote on a final fixed-asset rule.
Presently, federal credit unions seeking to spend beyond the 5% limit are required to seek a waiver from regulators. Eliminating the restriction — and the accompanying waiver process — will save credit unions thousands of hours of paperwork, according to Chairman Debbie Matz.
"Spending time putting together waivers is not a good use of credit union time," Matz said. "Credit unions should be able to make these decisions without needless red tape."
The proposed rule represents the agency's second attempt to revise its fixed-asset policy. An earlier draft, unveiled in July 2014, also repealed the 5% threshold, but it required institutions seeking to invest more than that to implement a fixed-asset management program demonstrating to regulators that they had conducted a pre-acquisition analysis and could afford the fixed assets they were seeking to buy.
Board Member J. Mark McWatters said the July proposal would have actually resulted in increased regulation.
In other actions, NCUA reported that the net position of its corporate stabilization fund was $238.5 million as of Dec. 31, 2014. It marked the first time the fund had finished a year in positive territory. Even with the positive trend, however, NCUA CFO Rendell Jones said the agency would not be able to refund any money to credit unions before 2021, when the corporate stabilization fund is scheduled to sunset.