WASHINGTON—Rep. Bill Posey (R-FL) has introduced a bill that would repeal the NCUA's risk-based capital rule (RBC), which is set to go into effect Jan. 1, 2019.
The bill is titled the Common Sense Credit Union Capital Relief Act of 2017 (HR 4464).
NAFCU noted that over the past three years it has consistently opposed the NCUA's RBC rulemaking and urged its withdrawal because of the adverse effects it would have on the credit union industry – particularly as a result of regulatory burdens and costs. NCUA Chairman J. Mark McWatters has indicated that revisiting this rulemaking is on his list of priorities for this year.
"NAFCU thanks Rep. Posey for introducing this bill that fully recognizes the devastating impact the NCUA's RBC rule would have on the credit union industry," said NAFCU Vice President of Legislative Affairs Brad Thaler.
NAFCU said it believes legislative changes are necessary to bring about comprehensive capital reform for credit unions, such as allowing credit unions to have access to supplemental capital sources and making statutory changes needed to design a true risk-based capital system for credit unions.
CUNA pointed out that credit unions throughout the United States have also expressed their significant concerns regarding NCUA’s risk-based capital standards for credit unions.
“Specifically, many of these concerns pertain to whether NCUA has legal authority to impose the requirements,” wrote CUNA President/CEO Jim Nussle in a letter of support to Posey. “In addition, credit unions have a particular concern with risk-based capital standards for the purpose of determining whether a credit union is well-capitalized as the Federal Credit Union Act permits the NCUA to impose a risk-based standard for the purpose of determining capital adequacy only.”
Nussle further noted credit unions have significant concerns with the additional regulatory burden imposed by the risk-based standards, particularly since CUNA analysis shows the changes would have done very little to reduce share insurance fund costs during the financial crisis.
In September, Posey, with Rep. Denny Heck (D-WA) reintroduced a bipartisan bill (HR 3736) that would require NCUA to conduct a study on the appropriate capital requirements for credit unions before implementing its final RBC rule.