WASHINGTON–The so-called “Stop and Study” bill has been re-introduced in Congress. The bill would require NCUA to conduct a study on the appropriate capital requirements for credit unions before implementing its final risk-based capital (RBC) rule were given a public thank you here.
NAFCU is supporting the legislation, while CUNA believes the timing is not good for the bill.
During its Congressional Caucus here, NAFCU Vice President of Legislative Affairs Brad Thaler recognized Reps. Bill Posey (R-FL) and Denny Heck (D-WA) for reintroducing the legislation, which is scheduled to take effect Jan. 1, 2019, during the trade group’s Congressional Caucus here.
The bill, titled the Risk-Based Capital Study Act of 2017 (HR 3736), would also require the NCUA to submit its study on the rule to Congress, along with legislative recommendations to improve the credit union capital system.
"NAFCU thanks Reps. Posey and Heck for reintroducing this important legislation that would help ensure that the NCUA, credit unions, Congress and others fully understand and comprehend the impacts this rulemaking will have on the industry," said Thaler. "Requiring further study of this rule will only benefit the credit union industry and ensure a fair and appropriate risk-based capital system is put into place."
NAFCU, which stressed it has consistently opposed the NCUA's RBC rulemaking and urged its withdrawal because of the adverse effects it would have on the credit union industry, noted NCUA Chairman J. Mark McWatters has indicated that revisiting this rulemaking is on his list of priorities for this year.
CUNA Spokesperson Vicki Christner said the trade group “appreciates Reps. Posey and Heck for their concern regarding credit unions. However, we’re not sure now is the time for this legislation given that NCUA Chairman McWatters announced during the CUNA GAC that one of the agency’s top priorities to address regulatory reduction was revisiting the risk-based net worth regulation and other needlessly burdensome rules.”
What Bill Calls For
The Risk-Based Capital Study Act of 2017 (HR 3736) would require the NCUA to study and report to Congress within nine months on:
- Whether the agency has the clear and legal authority to issue a two-tier proposal
- How RBC compares to bank capital requirements
- The rationale behind the risk weighting used by the agency
- The impact the rule will have on credit unions' capital cushions
If the bill is passed, the agency would not be able to implement the RBC rule until 120 days after the report goes to Congress.