WASHINGTON (9/23/13)--The National Credit Union Administration put credit unions on notice last week that the agency plans to propose "stress testing" for large credit unions--those with more than $10 billion in assets. That announcement gives the credit union system "reason to pause," Credit Union National Association President/CEO Bill Cheney wrote in the latest The Cheney Report.
Cheney made it clear that CUNA doesn't take issue with the NCUA taking appropriate steps to protect the federal share insurance fund in the interests of all credit unions that it insures. And CUNA appreciates that the agency is still weighing whether to make the results of such tests public.
"But we are pondering whether this sort of approach is necessary for credit unions, with their relatively low-risk profile, even for very large credit unions.
"Further, the specter of the 'creeping crisis of complexity' comes into play, as it appears that the agency will propose a threshold of $10 billion for the program--meaning as credit unions grow over the next several years, more and more will be subject to the testing, and the associated regulatory burden," he warned.
Cheney assured that CUNA intends to give any stress test proposal "very careful scrutiny," to include such actions as collecting more information from the agency about its intentions, and data from credit unions about the likely impact, in the short and long terms.
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