ALEXANDRIA, Va. (4/24/13, UPDATED 11: 28 a.m. ET)--A new rule on stress tests for large credit unions was adopted today by the National Credit Union Administration. It includes changes recommended by CUNA, but CUNA still believes the rule is not necessary.
CUNA has commented to the agency that new regulations are not needed to ensure that credit unions conduct robust stress tests and comprehensive capital planning because it is in their own best interests, and the best interest of their members, to do so.
The NCUA proposed the rule last October. It will require federally insured credit unions with assets exceeding $10 billion to develop and maintain capital plans, and undergo annual stress tests.
CUNA-endorsed changes made to the rule include dropping a provision that would have required public disclosure stress test results. Also under the approved rule, credit unions can apply after three years to have their own stress test results used, instead of NCUA's, for NCUA's review.
Also, the agency increased its cost projection to a more realistic $5 million, up from $4.2 million, for implementation of the rule in just the first year. That price tag will be shouldered by all federally insured credit unions.
The stress test requirements, as adopted, will require covered credit unions to conduct specific capital analyses to evaluate how changes in variables, parameters and inputs used by credit unions in their capital plans could affect their capital.
CUNA also had recommended that, if adopted, the rule should:
The rule passed by a vote of 2-1, with NCUA board member Michael Fryzel casting the dissenting vote. Board member Rick Metsger signaled a willingness to consider additional changes to the rule.