ALEXANDRIA, Va. (1/16/15)--While the National Credit Union Administration's revised risk-based capital (RBC2) proposal contained many changes wanted by the Credit Union National Association, the organization believes further changes are needed.
The proposal was approved by the NCUA board Thursday by a 2-1 vote, with board member J. Mark McWatters casting the dissenting vote.
See the below video (1 hour, 42 minutes), for the risk-based capital discussion from Thursday's meeting. The video is also available at CUNA's Risk-Based Action Center.
CUNA President/CEO Jim Nussle called the proposal a "solution in search of a problem," particularly given the likely costs to credit unions.
|NCUA Chair Debbie Matz listens to the agency's revised risk-based capital proposal at the board's Jan. 15 meeting. (CUNA Photo)|
NCUA Director of Examination and Insurance Larry Fazio estimated that the one-time costs for credit unions to read the rule and make the appropriate operational changes to be approximately $5.1 million. He also estimated an annual cost of less than $1 million from credit unions in labor for new call report requirements.
This has led Nussle, along with National Association of Federal Credit Unions President/CEO Dan Berger, to again question the necessity of having the rule at all.
"Based on the healthy capital levels across the credit union industry and the millions of dollars in costs associated with this proposed rule, our respective organizations still have serious issues with it and continue to question the necessity of the proposal," the two said in a joint statement Thursday.
However, the rule does contain many improvements sought by CUNA in its original comment letter, and in its advocacy efforts throughout last year.
"The changes respond to the major criticisms we levied against the original proposal. As a result, it is a step toward a more palatable final rule, and the entire NCUA board is to be commended," Nussle said. "However, RBC2 is far from perfect, and CUNA and the leagues will again provide analysis and support for credit unions to generate comments to drive further improvements."
The 90-day comment period for the proposal will not start until it is published in the Federal Register, which could be a few weeks.