WASHINGTON—While credit unions worldwide will be focused Thursday on International Credit Union Day, the CU trade groups will be focused on Alexandria, Va. and the NCUA board meeting at which the agency’s revised risk-based capital proposal will be up for a vote.
CUNA continues to outline some key issues it wants to be addressed, while NAFCU is standing firm that the rule is not needed.
CUNA Chief Advocacy Officer Ryan Donovan stressed how both RBC proposals have drawn a historic number of comments and created a great deal of debate within the movement.
“We are eager to see what additional improvements have been made to the proposal since it was reissued earlier this year,” he said. “The changes that were made between RBC1 and RBC2 were meaningful, so we are hopeful that when we see the final rule there will be more changes.”
CUNA Chief Economist and Chief Policy Officer Bill Hampel emphasized that changes made from the first proposal to the second indicate the success the movement had in lobbying NCUA to improve a regulation.
“However, there are a few things we are still looking out for,” said Hampel. “The most significant is the wild card capital adequacy provision included in the second proposal that would allow the NCUA to—over and above the risk based capital ratios—determine in the exam process if a credit union has sufficient capital. Depending on how this is worded, we could have some concerns. So we are anxious to see how it comes out.”
NAFCU has consistently opposed the RBC rulemaking and has urged its withdrawal.
“NAFCU believes NCUA has failed to consider the true impact this rulemaking will have on the entire credit union industry,” said NAFCU President and CEO Dan Berger. He reiterated the association’s view that RBC2 is unnecessary and will only impose more regulatory burden and costs on an already extremely well-capitalized industry.
Both trade associations support H.R. 2769, better known as the “Stop & Study” bill, which would require NCUA to review RBC2 and report back to Congress on the agency’s authority to issue a two-tier, risk-based-capital rule and the impact it would have on credit unions and their members.
If RBC 2 is approved as proposed, the rule would take effect Jan. 1, 2019.