ALEXANDRIA, Va.–NCUA has sent a letter to credit unions with a reminder that the board has approved a plan that FCUs no longer have to comply with a 5% limit on fixed assets.
“Decisions to upgrade facilities, update technology, and purchase other fixed assets can now be made by each federal credit union’s management team, under policies set by the board of directors,” NCUA said in a letter to credit unions on Oct. 2.
NCUA said its examiners will no longer focus on fixed assets, unless any of the following conditions occur in a federally insured credit union:
- The credit union has an unresolved Document of Resolution item enforcement action, or outstanding waiver concerning fixed assets.
- The credit union has weak earnings or other structural earnings weaknesses (such as high operating expenses).
- Fixed assets exceed 5% of assets, or
- The credit union has made a major acquisition of premises since the last exam or approved a plan to make a major acquisition of premises.
“In these exceptional cases, NCUA examiners will focus on whether the credit union can afford the level of fixed assets in which it has invested,” NCUA said.
NCUA said the change means “credit union officials will be able to run their business without needless red tape.”