ALEXANDRIA, Va.–Two months after the NCUA board approved two proposals, the agency has now opened up the comment window feedback on its proposal to simplify rules on risk-based capital and to add an “S” to the CAMEL rating system.
The comment period is open for 60 days and will run through May 10.
As CUToday.info reported here, at its January meeting
the board OK’d both proposals on a 2-1 vote over objections from then NCUA Board Member and now Chairman Todd Harper, who said portions of the capital proposal were a bad idea “built on rubble.”
The capital proposal includes two risk-based capital requirements. Under the first, the agency has proposed replacing the risk-based capital rule with a risk-based leverage ratio requirement that would use relevant risk attribute thresholds to determine which complex credit unions would be required to hold additional capital.
The second plan calls for retaining the risk-based capital rule that was first approved in 2015 and after numerous delays is now set to take effect Jan. 1, 2022, but would enable eligible complex FICUs to opt in to a “complex credit union leverage ratio” (CCULR) framework to meet all regulatory capital requirements.
As CUToday.info reported, NCUA said the CCULR approach would be modeled on the “community bank leverage ratio” framework implemented under the 2018 economic growth and regulatory relief law.
Adding An ‘S”
Meanwhile, the second proposal on adding an “S” – for “market sensitivity” – to the CAMEL rating system is also now out for comment. The proposal also includes a related modification to credit union liquidity and asset/liability management for the “L” in CAMEL.
At the time it made the proposal NCUA said it would provide parity with that the FDIC and other banking regulators already have in place.