With Congress out, CUNA focus on RBC2, overdraft rules

October 13, 2015

WASHINGTON (10/13/15)--Both houses of Congress are out this week. CUNA’s focus is trained on the National Credit Union Administration and its vote on the final revised risk-based capital rule (RBC2) Thursday.

More than 20 months after the proposal was first issued by the NCUA, and after a record-breaking number of comments have been sent in, the board will vote Thursday on a rule that is much more credit union-friendly.

“We’re eager to see what additional improvements have been made to the proposal since it was re-issued earlier this year,” said CUNA Chief Advocacy Officer Ryan Donovan. “The changes we saw between RBC1 and RBC2 were meaningful and significant; we’re hopeful that when we see the final rule there will be additional positive changes."

Donovan credited CUNA-league efforts as a whole, saying “CUNA, leagues and credit unions have been engaged in a very positive, coordinated advocacy effort that’s had a very meaningful impact on this rulemaking.”

CUNA Chief Policy Officer Bill Hampel said CUNA will be looking for a few additional improvements in the final rule.

“Our most significant remaining concern is the ‘wild card’ on capital adequacy that was included in the second proposal,” Hampel said. “It would allow NCUA examiners, despite what the risk-based ratios might imply, to determine that a credit union has insufficient capital in the examination process.”

The NCUA’s Thursday agenda also features a board vote that will solidify a pledge agency Chair Debbie Matz made at the last meeting that community charter expansion requests for federal credit unions serving areas with more than 1 million in population will be decided at the staff level.

If the NCUA’s Office of Consumer Protection denies the request, the credit union can appeal to the board.

Also this week, two CUNA subcommittees will come Washington, D.C., to meet with the NCUA and Consumer Financial Protection Bureau (CFPB). CUNA’s examination and supervision and consumer protection subcommittees will attend the NCUA board meeting Thursday and meet with agency officials later that afternoon.

On Friday, both subcommittees will meet with the CFPB to discuss credit union concerns about overdraft protection.

“The reason for this is that the CFPB will be pursuing rulemaking on overdraft protection services likely early next year. They’re in the approval stage at this point,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer. “As they go through this process, we want to make sure they are very cognizant of credit union concerns with overdraft protection and the fact that credit unions offer this product very differently that other profit-based institutions.”