Fixed-asset final rule summarized
OCT. 13, 2015 -- NASCUS has published a summary of NCUA's rule on fixed assets -- a final regulation that affects only federally chartered credit unions, but which the summary notes, explains how NCUA will evaluate fixed assets for safety and soundness regardless of state law limits.
The NASCUS summary is available only to members of the association. However, the summary notes that the new rule does the following:
- Taking effect Oct. 2, it eliminated the 5% limit on fixed assets for FCUs. NCUA examiners “will no longer focus on fixed assets," unless a credit union has any of the following:
- The credit union has an unresolved fixed asset DOR, enforcement action, or outstanding waiver;
- The credit union has weak earnings or structural earnings weaknesses (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 premise.
In the above situations, NCUA examiners will focus on whether the credit union can afford the level of fixed assets in which it has invested.