WASHINGTON (6/16/15)--CUNA is reviewing a bill that was introduced Monday. It would require the National Credit Union Administration to execute a study to determine appropriate risk-based capital (RBC) requirements for credit unions. The study would have to be completed before the agency could implement a final rule.
The Credit Union Risk-Based Capital Study Act of 2015 was introduced by Reps. Stephen Fincher (R-Tenn.), Bill Posey (R-Fla.) and Denny Heck (D-Wash.)
Ryan Donovan, chief advocacy officer for CUNA, said Monday, "Of course, we want to do everything we can to prevent NCUA's risk-based capital rule from adversely impacting credit unions. As we have said all along, it is a solution in search of a problem."
After much debate and roughly 2,000 comment letters addressing the original RBC proposal, the NCUA issued a revised plan (RBC2) in January of this year. The comment period ended in April.
The new proposal included many CUNA-recommended changes and was a substantial improvement to the original plan, but CUNA maintains that a RBC rule is unnecessary for credit unions.
"The key question in any discussion about an RBC rule is 'how do you best affect the final outcome?'" Donovan said.
"To that end, we are taking a look at this new bill to determine how much it would cost the NCUA--and by extension, how much it would cost credit unions--to conduct the study proposed by the bill. You have to weigh that cost against the likelihood that it would bring about any meaningful change to the final outcome.
"It may not make a lot of sense to do the study if it ends up costing the agency a significant sum but ultimately results in an unchanged rule."
Donovan said there are other considerations. For instance, he said, would it be more appropriate to consider getting Congress involved after the final rule is out, to see if it’s necessary?
"As we have seen with the bank capital rules, Congress seems more likely to intervene after a proposal has been finalized because they have something to aim at and more tools at their disposal."
Also, Donovan added it is important to consider how the timing of this bill might affect the other priorities that CUNA and credit unions are very actively working for on Capitol Hill right now.
"It's a very active period right now with the (Sen. Richard) Shelby reg relief proposal and the financial services appropriations bill in play. Credit unions have a number of provisions in those bills that would remove barriers so credit unions can more fully serve their members. Figuring out how this works into the process in a productive manner is an important consideration."
"The congressional interest in the RBC proposal has never been in question, as evidenced by the unprecedented response during the first rule making. That strategy was carefully planned, well thought-out and impeccably executed," Donovan said.
"If we are going to ask and expect further congressional action, we ought to take care to proceed deliberately to ensure the 'ask' is right, the timing is right and that it can meaningfully and positively affect the outcome."
CUNA will take the discussion of the bill to its Government Affairs Committee to get the views of its member credit unions.