ALEXANDRIA, Va.—The NCUA board on Thursday is expected to finalize a rule to amend its 2015 risk-based capital rule during its open meeting. Compliance with the much-delayed rule would be pushed back another year by the latest proposal.
NAFCU said it supports delaying NCUA's capital rule, and the association has advocated for bylaws changes. CUNA said it supports the proposal, but has expressed numerous concerns about the agency’s RBC approach in general.
“NCUA should be commended for its work on this proposal, particularly Chairman (J. Mark) McWatters, who opposed the original RBC rule,” said CUNA Chief Advocacy Officer Ryan Donovan. “However, we hope the board recognizes there is more work to be done to ensure the risk-based capital standard credit unions are subject to is appropriate to the risk profile of the system.”
Although NAFCU called NCUA's proposal as "positive," President and CEO Dan Berger has encouraged the NCUA to "consider its entire rulemaking anew" following the enactment of S. 2155, which made changes to bank capital. A provision to delay the rule by two years passed the House three times.
What Proposal Would Do
NCUA’s proposal would:
- Delay the effective date by one year to Jan. 1, 2020, though current prompt corrective action requirements would remain in effect
- Amend the definition of a complex credit union from $100 million to $500 million
- Exempt an additional 1,026 credit unions from the final RBC rule because of the changes
The board is also expected to issue a proposed rule to modernize the Federal Credit Union bylaws. Thursday's meeting will begin at 10 a.m. ET. CUToday.info will provide complete coverage.