CUNA Comment Letter
Proposal to Make Technical Corrections and Amend Certain Definitions
VIA E-MAIL: firstname.lastname@example.org
August 20, 2001
Ms. Becky Baker
Secretary to the Board
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3428
RE: Proposal to Make Technical Corrections and Amend Certain Definitions
Dear Ms. Baker:
The Credit Union National Association appreciates this opportunity to comment on the National Credit Union Administration Boards proposal to amend various rules to make technical corrections and add and revise certain definitions. CUNA represents over 90% of our nations more than 10,600 state and federal credit unions.
Under the proposal, the following changes would be implemented, among others:
- The term, "paid-in and unimpaired capital and surplus,-- defined as shares plus post-closing, undivided earnings, would be added. "Unimpaired capital and surplus" would be defined to have the same meaning. Post-closing undivided earnings-- would rely on the same language contained in the Federal Credit Union Bylaw provisions, which define surplus as: after all losses have been provided for and net earnings or net losses have been added thereto or deducted therefrom-- and define unimpaired capital as: less any losses that may have been incurred for which there is no reserve or which have not been charged against undivided earnings-- (FCU Bylaws, Art. XVIII, §1(g), (h)).
- The meaning of paid-in and unimpaired capital and surplus-- would be clarified by including the statement that This does not include regular reserves or special reserves required by law, regulation, or special agreement between the credit union and its regulator or share insurer.--
- Similarly, the definition of "paid-in and unimpaired capital and surplus" in the Credit Union Service Organization (CUSO) rule as well as in the Central Liquidity Fund (CLF) rule would be clarified. In addition, the proposed rule would remove the obsolete definitions for "remaining maturity" and "gross income."
- Section 723.4 would be amended by changing the reference in the section from federally insured credit unions-- to federally insured state-chartered credit unions.-- This change is intended to clarify the applicability of NCUAs general lending rules to federally insured state chartered credit unions member business loans.
CUNA agrees with the agency that these changes are timely and commends the Board for proposing amendments that will clarify its rules. In particular, incorporating provisions of the FCU Bylaws and other agency documents to elucidate terms in the regulations is a positive exercise. We strongly encourage the Board to continue looking for ways to clarify and streamline it regulations and policies.
Mary Mitchell Dunn
Associate General Counsel