Risk-Based Capital Rule On This Week’s NCUA Board Meeting Agenda

ALEXANDRIA, Va.—A proposed rule on risk-based capital is on the agenda for Thursday’s NCUA board meeting. The agency delayed the RBC rule by one year last fall.


In the proposal put forth last year the board also modified the definition of "complex" credit unions for RBC purposes to those with $500 million in assets from the original definition of $100 million.  

The risk-based capital proposal is the only item on the agenda for the meeting, which will be the second for the full three-person board that includes Chairman Rodney Hood and board member Todd Harper, in addition to board member J. Mark McWatters.

At the time it made the proposal, NCUA said the change would result in 90% of credit unions being exempt from the rule. Under the proposed rule, more than 98% of all complex credit unions would be considered well-capitalized, noted CUNA at the time the plan was put forward.

Trade Groups Stake Out Positions

Both credit union trade groups have been actively involved on the issue of risk-based lending. In 2018, following the board's decision to delay the rule, NAFCU President and CEO Dan Berger said it was "a step in the right direction," but that NAFCU remained "concerned about the regulatory burdens and costs the rule will place on credit unions."

Today, NAFCU said it continues to support what it calls an “appropriate” risk-based capital system, having consistently opposed NCUA’s RBC rulemaking. NAFCU has urged the rule be modified or effective date delayed.

Legislation that included provisions that would have delayed the rule by two years passed through the House three times last year, but did not move any further.

‘Area for Improvement’

Meanwhile, CUNA, in letters to NCUA board Chairman Rodney Hood and board member Todd Harper sent when they were sworn in earlier this year, cited NCUA’s risk-based capital rule as an area for improvement. CUNA supported the changes as finalized, but said it continues to have concerns with NCUA’s overall approach to risk-based capital.

The meeting is set to begin at 10 a.m. ET. A livestream will be available on the agency's website. CUToday.info will provide complete coverage.

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