ARLINGTON, Va.—NAFCU Thursday sent a letter to NCUA expressing its support for the recently introduced Financial Services for the Underserved Act of 2016 (HR 5541).
In the letter to NCUA Chairman Rick Metsger and Board Member Mark McWatters, NAFCU President and CEO Dan Berger said the bill would allow FCUs of all charter-types to add underserved areas to their field of membership.
“The legislation would require the applicants to have a method for servicing those new underserved areas within 24 months,” wrote Berger. “NAFCU applauds this long-overdue move to allow credit unions to reach out to consumers who need their services the most.”
Berger also recognized NCUA’s efforts regarding FOM and chartering rules.
“Relatedly, we also applaud the agency’s November 2015 proposal to amend the FOM and Chartering rules,” said Berger. “We believe that the proposal, along with NAFCU’s recommended changes, would provide the requisite relief for credit unions trying to compete in the 21st century economy.”
Berger encouraged NCUA to expedite the finalization of the proposed rule.
Separately, in a comment letter to NCUA, NAFCU expressed support for NCUA’s proposed occupancy rule, formerly known as the fixed-asset rule, and also made several recommendations to improve the proposal.
NAFCU Senior Regulatory Affairs Counsel Michael Emancipator wrote, “NAFCU urges NCUA to ensure that in the final rule, the definition of what constitutes a controlling interest in a credit union service organization is clear. While 51% is clearly a controlling interest, lesser percentages could be controlling interests as well. NAFCU supports credit unions having as much flexibility as possible in providing this relief.”
Emancipator also recommended that NCUA allow facility common areas and other shared fixtures and utilities to count toward the rule’s 50% partial occupancy requirement. The proposed rule includes a NAFCU-sought change to modify the existing definition of “partially occupy” so any federal credit union, or a combination of the federal credit union and a CUSO in which it owns a controlling interest, uses at least 50% of the premises within six years of purchasing it.
Emancipator also said that NAFCU and its members have long advocated that this rule must be modernized to better meet the operational and business planning needs of federal credit unions.
“Thanks to the NCUA board’s leadership, this proposed rule will do much to provide federal credit unions with greater flexibility in management of their property and related business decisions,” said Emancipator. “As the agency finalizes this rule, we encourage the board to consider NAFCU’s recommendations, such as extending the partial occupancy timeframe requirement from six years to 10 years.”