By a two-to-one vote, the National Credit Union Administration board today finalized a controversial proposal to raise the threshold at which credit unions must obtain appraisals for commercial real estate transactions from $250,000 to $1 million. As the American Bankers Association noted in its comment letter last year, this new level is out of step with other federal financial regulators, which have set the CRE appraisal threshold for banks at $500,000.
“As today’s debate from the divided NCUA board showed, the NCUA continues to push the envelope for the credit union industry without any reasonable justification,” said ABA Chief Counsel Ken Clayton. “This rule is just one more reason why lawmakers need to take a hard look at NCUA for failing to exercise its congressionally mandated oversight of the credit union industry.”
ABA has aggressively pushed back on NCUA’s efforts to loosen credit union regulations, including suing the agency over relaxed field of membership rules that violated federal statutes. Most recently, ABA-funded research from Federal Financial Analytics found that credit unions are falling short of their statutory mission to serve households of small means.