Final rule expands credit union acceptance of non-member deposits

The basis for measuring the regulatory limit on non-member and “public unit” shares will change under a new rule approved by the federal credit union regulator board Thursday, essentially giving federally insured credit unions (FICUs) more sources from which to build deposit bases.

According to the final rule approved unanimously by the National Credit Union Administration (NCUA) Board (to take effect 90 days after publication in the Federal Register), an FICU could receive “public unit” (deposits from local, state and federal governmental agencies) and nonmember shares up to 50% of the credit union’s paid-in and unimpaired capital and surplus less any public unit and nonmember shares, or $3 million – whichever is more.

The agency noted that it specifically sought comment on the proposed elimination of the alternative limit of $3 million. “In response to the many comments supporting retention of the limit, the final rule provides that a FICU may have public unit and nonmember shares in an amount up to the new 50% aggregate limit, or $3 million, whichever is greater,” the agency said.

In addition, the final rule includes provisions from the proposal that eliminated the requirement that an FICU request a waiver from the agency’s regional office if it wants to exceed the limit. Instead, an FICU would be required to develop a specific use plan if its nonmember shares, combined with its borrowings, exceed 70% of paid-in and unimpaired capital and surplus. Examiners would also be charged with watching the level at which credit unions accepted the non-member shares (which also include the public unit shares, or funds provided by the federal government and its agencies, state governments and agencies, local public school systems, and more).

Public Unit and Nonmember Shares

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