Revised RBC Rule Coming Jan. 15
The NCUA’s revised risk-based capital proposed rule is on the agenda of the agency’s Jan. 15 board meeting. The agenda was posted Thursday on the NCUA"s website.
CU Times asked NCUA Board Chairman Debbie Matz if she thinks the revised proposal will be well-received by the industry.
“Absolutely. Of course I don’t expect to hear from them, ‘thank you.’ I don’t see this rule as something that most credit unions would welcome – not because they’re going to be adversely affected, because the vast majority of credit unions won’t be – but I think it’s just the fear of a new regulation that they’re not familiar with,” Matz said in an interview Tuesday. “I think once they have to deal with it, I think they will realize that there really wasn’t much to be concerned about because the vast majority of credit unions won’t be immediately impacted by it.”
NCUA Board Member Rick Metsger said no one should be surprised by the content of the revised risk-based capital proposal.
“No one who has followed this issue when the proposal is issued will see anything that is surprising to them. It will be issues that they have commented on over and over again, and they will certainly see the results of some of the thoughtful comments, which will embedded in the proposal,” Metsger said.
“It will be fair. It will be equitable. It will provide a more accurate evaluation of the risks of individual credit unions and that will be to the benefit of all the credit unions who, at the end of the day, pay the tabs when someone moves outside the lines of proper safety and soundness,” he added.
NCUA Board Member J. Mark McWatters said he is in the process of analyzing the revised proposal, which he received Dec. 31. McWatters was not a member of the board when the original risk-based capital rule was proposed.
The NCUA’s 2015-2016 annual performance plan and a proposed rule related to part 702, subpart E of NCUA’s rules and regulations on capital planning and stress testing schedules are also on the agenda for this month’s meeting.
The NCUA Board will consider a community charter request from the $205 million 360 Federal Credit Union in Windsor Locks, Conn.
“NAFCU urges NCUA to give significant weight to the input it receives from credit unions on this second risk-based capital proposal,” NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt said. “The 2,000 comments it received on last year’s version are evidence that credit unions have serious concerns about NCUA’s approach to revising the industry’s capital requirements.NAFCU will continue to do whatever it takes to ensure that a fair, risk-based system is established for credit unions.”
CUNA President/CEO Jim Nussle said the trade group plans to review and carefully evaluate the second risk-based capital.
“We remain deeply concerned regarding several aspects of the original risk-based capital proposal,” he said. “We know some of the concerns we raised in our comment letter are being considered in the second proposal, including, but not limited to: the 10% requirement to be well capitalized, risk weights, ensuring a second comment period and the allotted time for the implementation period.”