WASHINGTON (1/15/15, UPDATED 12:23 p.m. ET)--The National Credit Union Administration board just voted to put out a revised risk-based capital plan for credit unions for a 90-day comment period, which will begin when the proposal is published in the Federal Register. The hundreds of pages of documents are packed with revisions from the agency's original and highly criticized plan launched almost exactly a year ago on Jan. 23.
The Credit Union National Association is scouring the documents to identify all changes, deletions and
NCUA lays out piles of 350-plus page documents, printed on two sides, in advance of today's open board meeting discussion of its revised RBC rule. The board room is packed with attendees and NCUA provided an overflow room for still others. Upon CUNA's request, the agency also allowed CUNA and others to videotape the public meeting. (CUNA Photo)
additions that have been made. CUNA is investigating whether the changes are sufficient to address stakeholders'--and lawmakers'--concerns regarding the initial proposal.
In 2014, CUNA warned that approximately 200 credit unions would have had their capital classifications reduced if the original proposal were adopted without modifications. CUNA said an initial scan of the new plan's details indicates the impact would be significantly reduced from that number.
CUNA is also studying the proposal to determine what changes have been made in other critical areas. CUNA remains unconvinced that this risk-based capital approach is necessary, and continues to be concerned about the risk-based, well-capitalized requirement and the substantial cost any proposal will impose on credit unions, as well as NCUA's legal authority to establish a two-tier system.
NCUA board member J. Mark McWatters voted against putting the proposal out for comment--making it a two-to-one vote--in part because of his remaining questions about the agency's statutory authority regarding a two-tier system. During the meeting he noted federal lawmakers' express concerns in this area and quoted from a CUNA legal opinion on the issue (video to come).
The NCUA shared a document highlighting what it considers the 10 top revisions contained in the new RBC proposal. The agency noted the new plan:
On another very key point, the proposal does not allow supplemental capital, but does ask for input on how supplement capital could be used.
CUNA will be providing full video coverage of the NCUA's RBC discussions shortly. CUNA has posted a series of resources provided by the NCUA, including its summarized comparison of the changes from the original proposal, a comparison of risk weights, Federal Deposit Insurance Corp. banks' risk weights, and a Frequently-Asked-Questions document.
Continue to watch News Now, NewsNowLiveWire, and CUNA's RBC Blog for more details and updates. Click here or see resource links for a News Now video on NCUA Chair Debbie Matz's comments regarding why the agency believes an RBC rule is justified.
While the RBC discussion was the open board meetings hottest agenda item today, CUNA will also be carefully scrutinizing the agency's annual performance plan, which also was considered.