The National Credit Union Administration voted on Thursday to provide relief to a majority of credit unions by raising the asset threshold, exempting institutions with less than $50 million in assets from increased oversight and regulation.
“Small credit unions are essential to their communities and fill a niche other financial institutions can’t,” NCUA Board Chairman Debbie Matz said. “So, at NCUA we’re regularly searching for ways to help small credit unions thrive and succeed. Consistent with our Regulatory Modernization Initiative, this final rule nearly doubles the number of small credit unions receiving regulatory relief.”
Matz said that the agency proposed a new threshold of less than $30 million last fall but determined through additional analysis that the agency could raise the threshold higher without significantly affecting the soundness of the banking industry.
Under the new definition of a “small entity,” 2,270 additional credit unions will see some regulatory relief, nearly doubling the number of small credit unions exempt from heightened regulatory scrutiny. Small credit unions with less than $50 million in assets will be exempt from a requirement that mandates the institution adopt and implement interest-rate risk policies.
The NCUA will require the new threshold when developing future rules in order to determine whether to exempt certain institutions from a rule’s requirements or to modify the rule to meet the needs of small credit unions.
Additionally, the NCUA will revise the threshold again in two years and every three years thereafter. The final rule marks the first time NCUA has revisited the “small entity” definition in 10 years.