The House passed a bill Tuesday that contains a CUNA-backed provision to delay the implementation date of NCUA’s risk-based capital rule. Specifically, it would push the bill’s effective date back to Jan. 1, 2021, from the currently scheduled Jan. 1, 2019 date.
“CUNA and credit unions have well-founded concerns about NCUA’s risk-based capital rule, primarily whether or not NCUA even has the legal authority to issue such a rule,” said CUNA President/CEO Jim Nussle. “We continue to maintain that the risk-based capital rule is a solution in search of a problem, and support Congressional efforts to delay the rule.”
The provision is contained within the Foreign Investment Risk Review Modernization Act of 2018 (H.R. 5841). CUNA wrote in support of the bill while the House Financial Services Committee considered the bill. The committee passed the bill unanimously, by a 53-0 vote in May.
In addition to the regulatory burden posed by the risk-based capital rule and questions about whether the cost is justified, CUNA continues to note that the current Prompt Correction Action system worked for credit unions during the financial crisis.
CUNA wrote to the Senate Banking Committee Tuesday to urge it to work on legislation delaying the risk-based capital rule.