ALEXANDRIA, Va.-NCUA Chairman Dennis Dollar offered a few small modifications but overall resoundingly endorsed the Credit Union Regulatory Improvement Act (H.R. 3579) in a letter responding to its authors' request for the agency's point of view. "We certainly recognize the need for ongoing modernization and clarifications of the Act and believe H.R. 3579, if adopted and implemented as drafted, would address in a positive way many of the issues facing credit unions today in a rapidly changing financial marketplace and do so within the parameters of safety and soundness," Dollar wrote in the letter to House Financial Services Members Ed Royce (R-Calif.) and Paul Kanjorski (D-Pa.), who are the main sponsors of the legislation. Included in the legislation is the chairman's risk-based net worth proposal. "Such a system, if adopted and implemented would provide both the regulator and credit unions with a more accurate tool to effectively measure, monitor and evaluate risk," Dollar wrote. He did offer some technical corrections in an attachment to the letter that would remove mention of "complex" credit unions, a category currently included in Prompt Corrective Action. Additionally, the chairman said NCUA had no problem with raising the member business lending cap to 20%. However, Dollar added, "While we feel that it would be sounder public policy to allow NCUA to address a limit.as was the case from 1934 to 1998 rather than to impose the relative inflexibility of a statutory cap, we have no safety and soundness concerns with this amendment as long as the regulatory authority to impose risk management restraints remains in effect." Dollar also said the agency would prefer a higher threshold for thrift conversion votes than 20% of a credit union's membership; currently there is no minimum. He did say that there were no safety and soundness concerns involved. Finally, NCUA recommended some clarifications in the credit union governance provisions. Dollar said the bill, as drafted, lacks specificity in the subsection on expelling a member for "nonparticipation by a member in the affairs of a credit union." As long as it is clear NCUA will be able to step in to protect members' interests and prevent abuses, the agency expressed no safety and soundness concerns. Also under credit union governance, Dollar said it was really up to the credit union movement to decide if it wanted to compensate volunteer board members for lost pay, but, as a regulator, NCUA had no objections. The chairman also signed off on credit unions' ability to lease space in underserved areas, with technical corrections, and all the other provisions that are already included in the Financial Services Regulatory Relief Act (H.R. 1375), including increasing credit union loan maturities from 12 to 15 years and excluding member business loans to non-profit religious organizations from the business lending cap. [email protected]