WASHINGTON—NCUA is being urged by NAFCU to amend its regulations in Part 701.36 on federal credit union (FCU) occupancy, planning, and disposal of acquired and abandoned premises and incidental powers.
In a letter, the trade association requested the agency amend Part 701.36 to reduce the requirement that credit unions occupy and use at least 50% of their premises, and instead require a minimum of 25% occupancy and use.
“NAFCU appreciates your attention to this matter, and we hope that you will work with us to recognize the altered landscape of office usage and the benefits to safety and soundness that will follow from providing flexibility to credit unions in how they manage their properties,” wrote Vice President of Regulatory Affairs Ann Petros.
‘Reasonable & Prudent’
In addition, Petros told the agency there are multiple factors that make amending the occupancy rule “reasonable and prudent,” including:
- NCUA has the statutory authority to provide greater flexibility in the partial occupancy requirements of Part 701.36, and the 50% threshold is a subjective restraint that the NCUA can and should amend
- The COVID-19 pandemic and “evolving communications technology have increased the utilization of remote work, and in many cases diminished the need for prior levels of office space.”
- Increased availability of vacant commercial space and record-high costs for new construction “often make conversion of existing construction into credit union premises the financially prudent decision; however, Part 701.36 places restraints on the size of properties that credit unions can consider purchasing and converting.”
- The increased credit union income from leasing a larger unused portion of a credit unions’ premises contributes to increased credit union safety and soundness