Liquidity rule final, stress testing proposal on tap
NCUA Board in open session
Oct. 24, 2013 – NCUA’s board today approved a final rule on liquidity and contingency planning for insured credit unions, with an effective date of March 31, 2014.
NAFCU still deems the rule to be unnecessary regulation and points out that credit unions are well-equipped to determine their own liquidity needs, both day to day and in times of emergency. It urged, however, that the agency provide sufficient time to comply in the event the rule was finalized.
Today's final rule requires that affected larger institutions – those with more than $250 million in assets – begin the process of applying for membership in the Central Liquidity Facility or access to the Federal Reserve discount window by March 31, 2014. Smaller institutions would have until March 31 to comply with requirements on the contingency plan, policy and other measures. The latter requirements differ for credit unions with assets of $50 million to $250 million, and those with less than $50 million.
The board approved the final rule on a vote of 3-0.
The board is also poised to release for comment a proposed rule for periodic stress testing by credit unions with $10 billion or more in assets. NAFCU, pointing out that these credit unions already perform stress testing, plans to closely scrutinize the proposed rule for its potential impact on all NAFCU members.
The association is preparing Final Regulations and Regulatory Alerts for members based on today’s NCUA Board actions.