ALEXANDRIA, Va.-The NCUA Board's agenda included a long list of items to wrap up before the Christmas holiday. At the opening and conclusion of the two-hour long December meeting, NCUA Chairman Dennis Dollar expressed the board's wishes to the entire credit union community for a happy holiday season. One of the highlights of the December board meeting agenda was a proposal to make the investment rule more flexible and easier to understand. Among the many suggestions in the board memorandum, NCUA proposed: * to permit federal credit unions to use services of a depository institution that is regulated by a state agency; * to expand permissible safekeepers to include state-regulated trust companies and require the federal credit union to maintain the records the board used to approve the use of a safekeeper; * to allow federal credit unions, through their incidental powers, to provide mortgage servicing for members; * to broaden the investment pilot program to include federal credit unions with foreign branches; * to evaluate the investment cap annually for all credit unions; * to expand RegFlex to include the purchase of securities with maturities exceeding the maturity of the borrowing repurchase transaction in an amount below the institution's net worth; * to allow the purchase of equity-linked options for the sole purpose of offering equity-linked dividends to members, subject to limitations; * to clarify that part of an investment adviser's background check is looking into the firm he/she works for; and * to clarify that credit unions over $10 million in assets must comply with generally accepted accounting principles for applicable reports and statements, as well as updating certain definitions and terminology. The Notice of Proposed Rulemaking was issued with a 60-day comment period. During the meeting, the board also approved the announcement and publication of the notice of loan applications for the Community Development Revolving Loan Fund for 2003 in the Federal Register. The board maintained the current interest rate on the loans at 1.0%. Additionally, the NCUA Board set the NCUSIF normal operating level at 1.3%, the same as it has been since 2000. If the operating level climbs above that number at the end of the year a dividend is paid out to member credit unions, but if the level falls below, the agency could assess a fee. No dividend, which is calculated in the first quarter of the following year, is expected for 2002. The fund has received congressional seed money for the past two years for the program totaling $1 million each year, including $350,000 earmarked for technical assistance grants. NCUA Office of Credit Union Development Director Anthony LaCreta said the agency was able to approve 213 of 269 requests for grants. NCUA Board Member JoAnn Johnson pointed out that the grants reimburse the credit unions after spending the funds to ensure it goes toward the designated purpose. LaCreta also pointed out that Congress' failure to reauthorize the CDRLF before adjourning may cause a delay in the availability of the grant money. However, the fund has plenty of money available for loans with just $7.3 million of its $13 million loaned out, a side effect of the current low-rate environment. The agency has been advertising the funds to eligible credit unions in an effort to boost lending. After 20 years of allowing the dust to pile up, the NCUA Board approved a notice and request for comment on updated and streamlined Corporate Federal Credit Union Bylaws. "We believe the proposed provisions to the Bylaws reflect the current legal and financial environment within which corporate credit unions operate," NCUA Office of Corporate Credit Union representatives asserted. The public has 60 days to comment on the changes. With everything else going on, field of membership related requests, six in all, still dominated the NCUA Board's December meeting. The board approved a request from Central Once Federal Credit Union to expand its community charter boundaries from 23 to 25 contiguous municipalities in Worcester and Middlesex Counties, Mass. The credit unions has five branches currently and plans to open two more, as well as offering members a courtesy van to gain access to the facilities. NCUA also granted three applications for community charter conversions. ORNL Federal Credit Union requested a community charter to encompass the more than one million people living, working, or worshiping in 16 different counties in Tennessee. The credit union is currently building its 12th branch and plans to open four more over the next two years. Johnson pointed out that the credit union planned to increase its member business lending 46%. Dort Federal Credit Union of Flint, Michigan applied to serve persons in three counties in Michigan plus two adjacent towns. Dollar highlighted that the credit union planned to nearly double its marketing budget to $1.2 million within five years. NCUA Board Member Deborah Matz said she found the credit union's goal "to serve those without credit union service" impressive and reminded credit unions that "a community charter is not a license to raid other credit unions." Also, Security 1st Federal Credit Union in the Rio Grande Valley-area of Texas got the go-ahead to serve Cameron, Hidalgo, Starr and Willacy Counties, most of which qualify as underserved areas. The population of the area is nearly one million. One hundred and twenty-two of the 139 census tracts adopted qualify as underserved areas, according to NCUA. "If ever an area needs a credit union it's the area the credit union has defined as their community," Matz remarked. Johnson concurred, stating that of the 35 banks in the area, only 9-17% of their loan portfolios were consumer loans. The NCUA Board also permitted $361 million City-County Federal Credit Union of Minneapolis to add the entire city (population 382,618) as an underserved area. According to the 1990 census, the population was at 76% of the metropolitan area's median family income. By 2000, it dropped to 74%. Additionally, the board upheld the Region II director's denial of Johns Hopkins Federal Credit Union's application to serve ancillary employees at one of its medical campuses. All decisions were unanimous. [email protected]