WASHINGTON (4/18/14)--Joining forces, the Credit Union National Association and National Association of Federal Credit Unions Thursday urged a 90-day extension for the comment period for the National Credit Union Administration's risk-based capital plan (RBC), set to elapse on May 28.
Both organizations previously asked for just such an extension back in February, and it was denied by the agency.
"We simply do not believe that the comment period provides sufficient time for a number of credit unions to analyze the proposal's impact on their individual operations and prepare their responses," CUNA President/CEO Bill Cheney and NAFCU President/CEO Dan Berger wrote to the NCUA board members.
"Given the health of the credit union system, we do not see the need to rush this rule and believe more time for comments will also benefit the agency through the production of well-reasoned letters," the credit unions leaders argued.
The joint letter called the RBC plan the "most significant proposed rulemaking that credit unions will face this year and likely for years to come." It noted that credit unions already are struggling, in some cases, to meet an onslaught of new regulatory requirements this year, and need additional time to provide the NCUA with substantive comments on the RBC plan that reflect their particular situations.
CUNA strongly supports risk-based capital for credit unions, but warns that the NCUA's current proposal is not the approach to take. CUNA analysis shows that, as written, the NCUA plan could force credit unions to hold as much as $7.3 billion in additional capital.
As described in the Federal Register, the NCUA proposal would revise the risk-weights for many of the NCUA's current asset classifications, require higher minimum levels of capital for federally insured natural-person credit unions with concentrations of assets in real estate loans, member business loans (MBLs) or higher levels of delinquent loans; and set forth the process for the NCUA to require an individual federally insured natural-person credit union to hold higher levels of risk-based capital to address unique supervisory concerns raised by NCUA.
It would apply to credit unions with $50 million or more in assets.