McWatters says supp. cap. rule needed soon
NEW ORLEANS (10/23/15)--A supplemental capital rule should be simple, functional in the marketplace and transparent, National Credit Union Administration board member J. Mark McWatters said this week.
Speaking at the National Association of State Credit Union Supervisors Summit, McWatters also said the agency shouldn’t wait to issue a rule on supplemental capital.
McWatters’ words reflect CUNA’s view on the urgency needed for such a rule. CUNA hoped the NCUA would propose the rule alongside risk-based capital, and believes the agency should get a proposal out soon to allow stakeholders to study and comment on any proposal.
“When I first came on to the NCUA board, I was surprised there wasn't a robust way already on the books to raise supplemental capital,” McWatters said, adding that he hoped a proposal would be issued within the next two or three months.
NCUA Chair Debbie Matz said in July that a supplemental capital proposed rule, as well as a field of membership proposed rule, would be part of the agency’s fall agenda.
NCUA staff said at the October board meeting that a supplemental capital rule would be made final before the 2019 implementation of its risk-based capital rule.
McWatters also addressed other issues, including:
The NCUA’s risk-based capital proposal, which he said is “illegal” and noted that a future NCUA board may take a “different view with respect to the legality and approach of the new rule.”
His belief that the NCUA board acted in defiance to Congress, particularly House Financial Services Committee Chair Rep. Jeb Hensarling (R-Texas), when it passed the risk-based capital rule, despite congressional requests that the rule’s effects be studied and presented to Congress before final approval.
- Opening the agency’s overhead transfer rate to public notice and comment, which he said is important. He said he was “astonished” this does not already occur. He added that if the comment proposal is not compliant with the Administrative Procedures Act, he would not support it.