ARLINGTON, Va.–NAFCU believes the delay by NCUA in the effective date of its risk-based capital proposal was a good move.
As CUToday.info reported here, by a 2-1 vote NCUA has pushed back the effective compliance date until Jan. 1, 2022. The rule does not currently apply to approximately 90% of credit unions, those under $500 million in assets.
NAFCU’s VP/General Counsel Carrie Hunt told CUToday.info that going into last week’s meeting, the association did not have an expectation for how the board might vote. But NAFCU is pleased the new date better aligns with the effective dates for CECL compliance, Hunt said.
“NAFCU has always supported risk-based capital and sensible capital rules, and the alignment makes sense,” Hunt said. “The data show credit unions are well capitalized. This is an opportunity to get it right so growth is not impeded.”
As for the near eight-year delay from the time the rule was first proposed until it is supposed to go into effect in 2022, Hunt said the issue hasn’t had the attention from policymakers that it has deserved until more recently. She added other issues have also evolved, including rules around bank capital and BASEL standards.
Supplemental Capital
In terms of NCUA Chairman Rodney Hood’s statement he plans to have a supplemental capital proposal in place before year end, Hunt said NAFCU “supports credit unions having as many tools as possible.” She acknowledged its largely unknown at this point what that supplemental capital proposal might look like.