NCUA to Extend RBC Phase-in

Posted On: Jul 11, 2014

NCUA Chairman Debbie Matz said during the agency’s second listening session that the agency’s final risk-based capital rule will include a longer implementation period than the proposed 18 months. Disputing CUNA’s estimation that the rule would require affected credit unions to raise more than $7 billion to remain well-capitalized, Matz claimed the proposed rule would require about 200 credit unions to raise $663 million. She also noted that a capital buffer is not required for any credit union.

Acknowledging the importance of agricultural loans to farmers, Matz told the credit union executives attending the listening session that agricultural lending issues would be addressed in the final rule. Stating “it was not the NCUA’s intent to provide examiners with independent authority to raise capital requirements,” Matz said the agency plans to re-write this portion of the proposal.     Source: Credit Union Times

When pressed to allow a second comment period on the proposed RBC rule, Matz said that if, after proposed changes are made, “we determine that we are required to because we have made significant changes to the intent of the reg, we will.” However, if the agency determines the changes to be more of a “fine-tuning,” they probably will not. Matz also pointed out the agency has been working on the proposal for more than two years, and “does not want to lose more time on doing something we feel is essential to the safety and soundness of the future of the system.”

New NCUA Board Member Rick Metsger noted that there is already a risk-based capital system in effect: credit unions make their own calculations and only “hear from” the NCUA if they are “in trouble.” He said some credit unions may have forgotten the current RBC system during the debate over the proposed rule.    Source: Credit Union Times