ARLINGTON, Va. – NAFCU applauded NCUA for publishing the list of rules it plans to review each year and took advantage of the opportunity. "NAFCU commends the agency for its decision to inform credit unions and the public about regulations to be reviewed each year.NAFCU encourages NCUA to make every attempt to involve itself less in credit union managerial issues and focus its attention on the safety and soundness concerns affecting the industry," NAFCU President and CEO Fred Becker wrote in the group's comment letter. One of the biggest items NAFCU asked NCUA for was to lower the capital requirements for the RegFlex program from the current 9% to 7% for consistency with the Prompt Corrective Action requirement to be "well capitalized." Under this program, NAFCU also asked the agency permit credit unions to broaden their investment horizons. "While some of these investments have greater interest rate risk than other instruments, a moderate amount of such investments will not jeopardize the safety and soundness of "well-capitalized" and well-managed credit unions," according to Becker. NAFCU suggested NCUA allow Reg-Flex credit unions to use principle-only stripped mortgage-backed securities to hedge interest rate risk. NAFCU said this could be applicable to all credit unions as well. Additionally, in response to a request earlier this year, NAFCU said a standard, shortened privacy notice could be introduced, but its use should be optional and credit unions should be able to tailor it to suit their needs. "Most credit union privacy notices are already short and easy to understand, and credit unions have experienced very few complaints regarding their notices. Credit unions have a long history of protecting the confidentiality of member information and therefore have not developed the types of elaborate sharing practices that might necessitate a long notice," NAFCU's letter read. A shorter privacy notice should not have to be accompanied by a long one, Becker said. In addition, NAFCU suggested that the Credit Union Service Organization and incidental powers regulations be rearranged so that the illustrative categories of examples of CUSO activities and credit unions' incidental powers are included in the preamble or an appendix as guidance and not in the actual body of the reg. Becker also recommended that NCUA remove Section 714.3(a) from its leasing rules and emphasize 714.3(d), which requires credit union lease interests to be properly perfected under state law. NAFCU believes 714.3(a) "is unnecessary and cautions NCUA against equating a full assignment of rights with perfection of those rights." Finally, NAFCU questioned the necessity of including the details of what is required in a business plan for insurance purposes in the overseas branching regulation within the body of the rule and recommended they be placed in the preamble to the rule. [email protected]