WASHINGTON–The credit union trade associations have responded with mixed reactions to an NCUA proposal to delay by one year compliance with its risk-based capital proposal, and to further change the definition of “complex” credit union so that 90% of CUs are exempt.
CUToday.info has full coverage of the meeting here.
Here is what the trade groups are saying:
Jim Nussle, CEO, CUNA
“NCUA’s proposal to delay implementation of its risk-based capital rule by one year is a step in the right direction, but CUNA maintains the regulation is a solution in search of a problem. Credit unions have expressed their well-founded concerns regarding NCUA’s risk-based capital rule, and CUNA will continue our work to ensure these concerns are heard."
CUNA noted it is delaying the rule, but has pushed for a two-year delay through various pieces of legislation.
Dan Berger, CEO, NAFCU
“NAFCU has continually pressed the NCUA for changes to its current RBC rule since it was introduced, and this new proposal is positive. NAFCU has done significant work in analyzing appropriate capital levels for the credit union industry and will provide the NCUA with even further suggestions to strengthen credit unions and the economy at large.”
NAFCU said it continues to lead efforts to obtain a delay in the RBC rule's effective date, successfully getting language to delay it by two years passed by the House of Representatives three times.
Lucy Ito, CEO, NASCUS
“NASCUS commends NCUA for delaying the rule’s implementation until Jan. 1, 2020. The development of risk-based capital requirements for credit unions is a complicated undertaking that will have an enormous impact on how credit unions operate, the products and services available to members, the types of information sought by regulators, and the costs of compliance. NCUA, itself, needs time to develop guidance for examiners and credit unions; and, examiners and credit unions, in turn, need the additional time to prepare for compliance.”
On the raising the applicability threshold to $500 million:
“NASCUS is pleased to see that NCUA took our recommendations to heart and is proposing to raise the threshold to $500 million. At this threshold, NCUA would be able to ensure smooth implementation of the rule without threatening the viability of smaller institutions. NASCUS is carefully analyzing how raising the threshold for “complex” credit unions would impact individual credit unions and the broader credit union system.”
On not including supplemental capital:
“It is disappointing that NCUA has again declined to include supplemental capital for non-low income consumer credit unions within the proposed risk-based regulatory framework. Supplemental capital has a key role in protecting the NCUSIF and bolstering the safety and soundness of the credit union system. NASCUS will continue to engage with the Agency to secure this valuable tool for credit unions ahead of the next financial crisis that strikes the credit union system.
“NCUA previously committed to promulgate a supplemental capital framework in conjunction with RBC. NASCUS urges NCUA to use the delayed implementation to consult and coordinate with state regulators to develop a regulatory supplemental capital framework for insured credit unions.”