WASHINGTON—CUNA continues to press NCUA to make improvements to both the risk-based capital and MBL proposals, sending a letter to Larry Fazio, director of the agency’s Office of Examination and Supervision.
“Although the second RBC rule was much improved, credit unions still remain concerned about the impact of RBC on their credit unions,” wrote Lance Noggle, CUNA senior director of advocacy and counsel. “We specifically discussed the additional minimum capital requirement that is part of the second RBC proposed rule. Many credit unions remain concerned that this authority gives examiners the ability to unilaterally impose extra capital requirements on credit unions that are well above what will be required by the final RBC rule. If the NCUA board does not remove this authority, we urge your office to develop very specific guidance to examiners detailing when and how additional capital can be imposed.”
Noggle emphasized that CUNA strongly opposes anything but a very open process for imposing additional capital requirements, and only in “very rare circumstances.”
CUNA also addressed calculation of goodwill for pre-RBC mergers.
“CUNA members want a final RBC rule to have a permanent grandfather for goodwill from mergers that happened before a final RBC rule is passed by the NCUA board. Many of these mergers were emergency mergers done at NCUA's request to minimize share insurance costs, and thus credit unions should not be penalized for helping the credit union system,” Noggle wrote.
Turning to MBL, Noggle said with the proposal shifting from prescriptive regulation to principles-based regulation, CUs are concerned about the “unknown nature” of the new approach and corresponding examiner guidance.
“We continue to press for input on this examiner guidance as it will have an outsized impact on the construction of a credit union’s commercial lending program,” wrote Noggle.