ALEXANDRIA, Va. (5/2/14)--The comment deadline for the National Credit Union Administration's risk-based capital (RBC) plan remains at May 28, said agency board member Rick Metsger in a letter to the Credit Union National Association. The response aligns Metsger with NCUA Chair Debbie Matz who also said no to a joint request by CUNA and the National Association of Federal Credit Unions to extend the comment period.
A key reason the deadline must remain May 28, according to Metsger, is that the regulator wants adequate time for staff to summarize written RBC comments to better inform the Listening Sessions Matz and Metsger--and perhaps NCUA nominee J. Mark McWatters by then--will be conducting across the country this summer.
Also, basic human nature--lulling many to wait until the last minute to submit a report or comments--argues against an extension, Metsger asserted.
"Extension of the comment period is more likely to delay the receipt of comments (and thus delay their consideration) than it is to generate additional comments. It would seem more productive for interested parties to utilize the significant time still left in the comment period to focus their energy on actually analyzing the proposal and providing input, rather than eroding that time on other issues," he wrote.
Metsger noted in his April 30 letter that he will carefully consider any comment on the proposal prior to a final vote, regardless of when it is received. CUNA General Counsel Eric Richard pointed out, however, that the other members of the NCUA board have not made any similar commitment. "The comment deadline remains May 28--that is hard and fast. A credit union must meet that deadline to become a part of the official record on this historic proposal," he said.
Metsger reminded in his letter that the agency has created resources, available at www.ncua.gov, to help credit unions understand the proposed rule.
Reflecting another point made by Matz when she sent her response to the joint trade group request for an extension, Metsger said, "While I cannot predict what the board will do, it is common for final rules to be modified to reflect comments received. History suggests the more complex and significant a rule is, the greater the likelihood modifications will be made."
On Thursday, Richard reiterated CUNA's urging to credit unions to weigh in on the RBC plan.
The NCUA proposal would make changes to Prompt Corrective Action (PCA) rules, that would replace existing risk-based net worth requirements with new risk-weighted asset and capital requirements. The rule would apply to federally insured "natural person" credit unions with more than $50 million in assets.
CUNA supports risk-based capital. However, the association strongly opposes the proposal the NCUA has issued for comment. Working with CUNA's Examination and Supervision Subcommittee, CUNA is developing its comment letter, which it says will reflect major concerns and present a range of recommendations to make the proposal workable.
In the meantime, CUNA is encouraging all credit union with assets above $40 million to consider how the proposal will affect their operations and to file a comment letter.
Use the resource link for CUNA's RBC Action Center.