NCUA issued a proposed rule to delay implementation of its risk-based capital rule by one year at its Thursday meeting. CUNA supports delaying the rule, but has pushed for a two-year delay through various pieces of legislation.
“NCUA’s proposal to delay implementation of its risk-based capital rule by one year is a step in the right direction, but CUNA maintains the regulation is a solution in search of a problem,” said CUNA President/CEO Jim Nussle. “Credit unions have expressed their well-founded concerns regarding NCUA’s risk-based capital rule, and CUNA will continue our work to ensure these concerns are heard."
The rule is currently scheduled to become effective Jan. 1, 2019. NCUA’s proposal would change it to Jan. 1, 2020. CUNA-backed legislation, including the JOBS and Investor Confidence Act (S. 488) and Foreign Investment Risk Review Modernization Act of 2018 (H.R. 5841) would delay implementation to Jan. 1, 2021. Both bills have passed the House.
The proposed rule also could raise the asset threshold for defining a complex credit union to $500 million, up from $100 million. As a result, 90% of credit unions—based on Dec. 31, 2017, call report data—would be exempt from the rule. Under the proposed rule, more than 98% of all complex credit unions would be considered well-capitalized, according to NCUA.