NCUA News Release

3,650 Federal Credit Unions Meet RegFlex Eligibility Requirements

March 17, 2003, Alexandria, Va. – As a result of the data from December 31, 2002 Call Reports and the most recent examination cycles, 3,650 federal credit unions have been determined to be eligible for RegFlex, a National Credit Union Administration designation created to reduce regulatory burden on strongly-capitalized, well-managed federal credit unions.

RegFlex eligible credit unions represent 61 percent of the total 5,978 federal credit unions in the United States. Of RegFlex approved federal credit unions, 65 percent, or 2,363 have under $20 million in assets. The RegFlex program provides earned regulatory flexibility for eligible federal credit unions and has proven to be particularly beneficial to smaller credit unions, which can be more adversely affected by regulatory requirements because of staffing limitations and compliance costs.

“ In the eighteen months since RegFlex was implemented, more credit unions have performed at the standards required for eligibility and gained access to the benefits it offers for that strong performance,” NCUA Chairman Dennis Dollar said. “The RegFlex incentive for diligent and prudent management, coupled with its emphasis on maintaining a strong financial position that helps protect both the members and the taxpayers, has proven to be quite valuable for credit unions and is a positive inducement to better performance which also serves NCUA well as the supervisory agency.”

RegFlex allows eligible credit unions to be exempted from all or part of specific regulations not required by statute and unnecessary for safety and soundness purposes when applied to credit unions meeting the eligibility standards. RegFlex eligibility is earned by credit unions that have a minimum of 9 percent net worth and a CAMEL code 1 or 2 for two consecutive examination cycles. RegFlex eligibility can be revoked by NCUA in whole or in part at any time based upon changing trends in credit union performance. The rule also includes an application process for credit unions that meet one, but not both of the criteria. In addition to 3,646 automatically qualified credit unions, regional directors approved 4 additional waivers and denied three waiver requests in 2002.

The NCUA, governed by a three-member board appointed by the President and confirmed by the Senate, is the independent federal agency that charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates the National Credit Union Share Insurance Fund (NCUSIF), insuring the savings of 80 million account holders in all federal credit unions and many state-chartered credit unions.