WASHINGTON – Following NCUA’s approval Thursday of a one-year delay in the effective date of its risk based capital rule, both CUNA and NAFCU still say a longer extension is needed.
As CUToday.info reported here, the RBC effective date is now Jan. 1, 2020. NCUA also approved changing the definition of a complex credit union from $100 million to $500 million—exempting an additional 1,026 credit unions from the final RBC rule.
The trade groups have been advocating for a two-year delay. NAFCU indicated that it will not cease its efforts to obtain a longer delay through Congressional action. A provision to delay the rule by two years passed the House three times.
"We appreciate NCUA Chairman J. Mark McWatters and Board Member Rick Metsger's efforts, as a one-year delay of the NCUA's risk-based capital rule is a step in the right direction,” said NAFCU President and CEO Dan Berger. “However, we remain concerned about the regulatory burdens and costs the rule will place on credit unions. NAFCU will continue to advocate for Congress to delay the rule's implementation by two years in order to give the NCUA time to revise it.”
CUNA acknowledged that NCUA’s move Thursday provides needed regulatory relief to smaller CUs.
“We thank the NCUA board for passing its risk-based capital final rule, and hope Chairman McWatters and Board Member Metsger recognize 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 and consistent with federal law,” said CUNA Chief Advocacy Officer Ryan Donovan. “While CUNA supports a longer delay and other substantive modifications to the rule, the proposal’s changes are important and will provide relief, and NCUA deserves credit for this targeted regulatory relief.”
NASCUS' Response
NASCUS applauded NCUA's moves Thursday, noting the agency's commitment to an alternative capital rule. The agency said a final rule on alternative capital would be in place in time for when the RBC rules take effect.
“We are pleased that the NCUA board recognized that developing risk-based capital requirements is a complex endeavor that will affect credit unions and examiners, alike. Delaying the rule for one year will allow NCUA to develop risk-based capital guidance as well as a concomitant alternative capital rule and enable credit unions to prepare for compliance,” said NASCUS President and CEO Lucy Ito.