The NCUA board on Thursday agreed to seek public comment on proposed rules that would eliminate the requirement that the agency approve the capital plans for federally insured credit unions with assets of $10 billion or more and allow credit unions to conduct their own stress testing.
“So, we have regulatory relief and budget savings,” Board Chairman J. Mark McWatters said, following a presentation on the proposed rules. “Seems like a good idea to me.”
Board member Rick Metsger said that one of his priorities has been to allow credit unions to conduct their own stress tests.
Under the plan, two categories of credit unions would no longer be required to have their capital plans approved by the NCUA. The agency would review capital plans as part of its supervisory oversight.
The first category would be credit unions that have completed fewer than three capital planning cycles and have less than $20 billion in assets. Those credit unions also would not be subject to any stress testing requirements.
The second category would be a credit union that has completed at least three capital planning cycles and has less than $20 billion in total assets. The NCUA would retain the right to classify other credit unions to fit in that category.
Those credit unions will have to conduct their own stress tests.
The third category—those credit unions with at least $20 billion or more in assets– would not have their capital reporting requirements changed. And again, the agency would retain the right to classify any credit union in that category.
Those credit unions would be required to conduct their own stress tests and would be subject to the 5% minimum stress test requirement.
In the proposal, the agency said that the regulatory burden would be decreased for some credit unions, allowing them to focus on establishing sound capital planning and capital adequacy assessment processes.
The board also received a third-quarter report on the share insurance fund. At the end of September, 204 credit unions were classified as troubled, compared with 210 at the end of June.
Some 88% of those credit unions have assets of less than $100 million, according to agency CFO Rendell Jones.
Jones also said that so far this year, four credit unions have failed, compared with 14 in 2016.
The board also approved a plan to gather information about the burden a new standardized system of collecting information on loan, deposit and investment data would pose.
Also on Thursday, the board approved final rules that would streamline the agency’s appeals process for credit unions and the role of the supervisory review committee.