Trade associations weigh in for better credit union benefits

<p>ALEXANDRIA, Va – NAFCU and CUNA differed slightly in their opinions about an NCUA proposal to allow federal credit unions to offer better benefit packages to attract more and better employees. NCUA seeks to clarify that the scope of its regulations in this area is not confined to retirement benefits but is more broadly applicable to other employee benefit plans. NCUA also proposes changes that will clarify that a federal credit union may make an otherwise impermissible investment for the purpose of funding an employee benefit. The associations split slightly on the part of the proposed regulation which would allow federal credit unions to invest in otherwise impermissible investments in order to meet their benefit obligations. CUNA backed NCUA adopting a “liberal manner” in interpreting the phrase “directly related” in the description of the investments in which a credit union could use to meet its benefit obligation. NAFCU suggested dropping “directly related” entirely and substituting the phrase “reasonably related.” CUNA also pointed out that the current wording of the proposal did not appear to include corporate credit unions while NAFCU suggested slightly different language making it clear the regulation was not limited solely to retirement benefits. Both associations praised the agency for recognizing that federal credit unions need to attract and hold employees. “There is increased competition to attract and retain qualified employees,” CUNA wrote. “Credit unions certainly have not been immune from this trend. Given this situation, it is extremely important for credit unions to have the added flexibility to create attractive benefits packages that are competitive and will encourage their employees to remain with the FCU.” “NAFCU supports these changes and believes they will help clarify permissible activities for federal credit unions, the association said.</p>