Federal Credit Union Ownership of Fixed Assets

The NCUA Board (Board) is issuing for public comment this proposed rule (2015 proposal) to amend its regulation governing federal credit union (FCU) ownership of fixed assets. To provide regulatory relief to FCUs, the 2015 proposal eliminates a provision in the current fixed assets rule that established a five percent aggregate limit on investments in fixed assets for FCUs with $1,000,000 or more in assets. It also eliminates the provisions in the current fixed assets rule relating to waivers from the aggregate limit. Further, instead of applying the prescriptive aggregate limit provided by regulation in the current fixed assets rule, the Board proposes to oversee FCU ownership of fixed assets through the supervisory process and guidance. The 2015 proposal also makes conforming amendments to the scope and definitions sections of the current fixed assets rule to reflect this proposed approach, and it amends the title of Sec. 701.36 to more accurately reflect this amended scope and applicability. In addition, the 2015 proposal simplifies the fixed assets rule's partial occupancy requirements for FCU premises acquired for future expansion by establishing a single six-year time period for partial occupancy of such premises and by removing the 30-month requirement for partial occupancy waiver requests. The Board notes that, in July 2014, it issued a proposal regarding the fixed assets rule that addressed, among other things, the partial occupancy provisions of the fixed assets rule (July 2014 proposal), but NCUA did not finalize that proposal. For reasons discussed below, the 2015 proposal incorporates similar partial occupancy proposed amendments from the July 2014 proposal, with one modification to the time period for partial occupancy.