NCUA May Delay Implementing Risk-Based Capital Rule


When the National Credit Union Administration (NCUA) Board meets Aug. 2, it will consider delaying implementation of the controversial Risk-Based Capital Rule until January 2, 2020.   

In announcing the decision to call for a vote to delay, Board Chair J. Mark McWatters acknowledged the legislation introduced by Rep. Denny Heck (D-WA 10) and Rep. Bill Posey (R-FL 8). 

H.R. 3736 would require NCUA to delay implementing the Rule while it studies appropriate capital requirements for federal and state-chartered credit unions. 

NCUA hand delivered a letter to Reps. Heck and Posey last week recognizing their efforts and informing them that the Board would consider a one-year delay. 

“If finalized, during the one-year delay, the NCUA’s current prompt corrective action requirements would remain in effect,” McWatters wrote. “The proposal also amends the definition of a ‘complex’ credit union by increasing the threshold level for coverage from $100 million to $500 million without impairing the safety and soundness of the National Credit Union Share Insurance Fund (NCUSIF). Upon approval by the NCUA Board, the proposed rule will be issued for a 30-day comment period.” 

The potential for delaying implementation of the Rule is a positive development, according to your Association’s Regulatory Advocacy team. 

“We appreciate the work of Congressman Heck to delay this rule so that its impacts can be more thoughtfully studied,” said John Trull, AVP, Regulatory Advocacy.” We’re thankful to Chair McWatters for putting this important proposal on this week’s NCUA agenda.” 

Congressman Heck began his career working in a Northwest credit union and is the only member of the House of Representatives from the Pacific Northwest to serve on the House Financial Services Committee. 

“This is good news – not just the delay but also the threshold increase,” Heck said. “I have long questioned whether risk-based capital makes sense for the simple banking model practiced by most credit unions. I am very glad to see NCUA move in that direction.” 

Posted in NCUA.